2014 is a special year for supply chain technology… or maybe not

This is a short article to address the over-hyping of tech changes in the field of supply chain management. Anyone who follows my other articles, my blog, or has spoken with me personally, knows that I’m an avid technologist. But, that said, its worth stepping back and thinking critically about how special the current phase of tech development & rollout is to our field.

First, contextualize supply chain technology messaging. Most technology providers and the ecosystem of hangers-on including system integrators and analyst riff on the accelerating pace of technology and market change. Here is a quick sample from the salad bar of marketing hype:

The problem with these perspectives is that they are true in some shallow sense but meaningless or misleading in a larger sense. The part that is true is that technology trends are accelerating, because in all measurable dimensions that is a fact. Data volume, data exchange volume, cost-to-compute, cost-to-transmit, cost-to-produce, and myriad other measures are all improving in an exponential manner. But, technology has been on an exponential growth curve since its inception thousands of years ago. So in a larger sense, nothing about the last few decades is meaningfully different. It’s a trend, but it’s a stable millennia-spanning trend. That anyone is caught off guard by this is itself a little shocking: are we technologists or are we not?

Beyond just the misleading assumption that accelerating technology development is something new, the market participant quotes above imply that it’s something special and meaningful. It implies that we are living in a special time for supply chain technology. This is a kind of new Copernican heliocentrism. Earlier generations were convinced that the sun lay at the center of the universe, and hence the earth had a special place in the cosmos. That theory was exploded and we now accept that there is nothing special about the position, composition, or history of the earth. I like that illustration because, frankly, there may be nothing particularly special about this phase of supply chain technology. We may be on the edge of revolutionary changes in forecasting, material handling, and collaboration. Or we may not. We might be in a rather squalid, tepid, unremarkable time period in which nothing of lasting use or interest will appear. In the thousands of years that global trade has occurred, and the likely tens of thousands of years ahead, why would 2014 merit such attention? I suspect it’s simply because those of us reading this article (and he who wrote it) are alive… and we have the common human hunger for a sense of importance and meaning.

Of course it is true that great progress is being made relative to a short time ago. Warehouse management systems are demonstrably reducing human-input per material handling unit year over year. Elsewhere human inputs are being eliminated altogether. The number of fully automated warehouses continues to grow, and their capabilities to handle variable carton sizes and to automatically pick and pack are expanding. Self-driving vehicles exist in industry use already (automated cargo rail line in Australia) and within two decades it seems likely that most commercial trucks will be driverless. In back-office functions like demand forecasting, order management, and transport planning the inroads of machine learning are obvious and exciting. In all these ways we are indeed in a period of progress. But that progress does not represent a long term shift in our industry. For every exciting tech advancement I just named, think of all their precursors from two generations back that are now ridiculed, ripped-and-replaced, or languishing in laggard enterprises. What we laud and lust after in supply chain technology forms a thin scrim of bleeding-edge tech gilding a somewhat larger layer of “good enough” tech, which rests on top of a miles-deep garbage pit packed with relic technologies. The progress we make is so ephemeral that it simply cannot be the basis for a new world so much as a way-station on to other technologies. What I’m talking about here is the missing phase of the tech hype curve: obsolescence & replacement.

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It is the terminal phase for all the game-changing tech we discuss at conferences and in tech crunch, in blogs and TED videos. Not only is it inevitable for 99.9% of the tech being developed now, but it happens so quickly that the societal impact from its passing glory days seems overstated.

Which brings me to the other point that detracts from the specialness of our current period. Even breakthrough technologies that do have lasting impacts on our culture may not be experienced as such when they are being adopted. In other words, they might be just no big deal. Look back in history at other major developments. What we consider to be pivotal events were often not even discussed by the contemporaries. The deployment of machine computing, the appearance of general programming languages, DARPA net, the HTML protocol, the hypertext web, mobile SMS messaging, identification of nano-scale material properties, unmanned aerial vehicles, and so forth. In fact, these examples are even bad ones because I could only think of technologies that had viable descendants in which we still invest our energies. These are certainly the minority: most tech branches are subsumed wholesale by competing branches. Vacuum tubes, for example, continued to be improved even as semiconductors overtook them. Telephone wires were being laid while cell phone towers went up. CD-reading and writing was getting faster even as flash-memory was coming down in production cost. A cursory look at business journals from previous decades shows that we spend most of our collective energy on dead-end technology paths.

The diatribe is almost over, let’s just quickly think about why it matters. I still believe that technology is the most important engine of change in supply chain management. Alongside other factors, technology changes are indeed disrupting our field and must be appreciated and watched by supply chain leaders. But part of that task of technology assessment is to maintain realistic projections in to the future. Study after study shows that we humans are terrible predictors of technology change, both collectively and individually. We systematically get it wrong by over-estimating near term change and under-estimating long term change. This article attempts to provide some framework points to correct our intuitions. Let me give a quick example. There are early prototypes of wireless electricity technologies, most relying on piezoelectricty. As this tech matures there will be an over-hyping in the expectations in the short term, and an under appreciation for how deeply it will change things in the long term. By reflecting on some of the points in this article, I hope supply chain leaders can counteract that tendency. Are we in a special time for supply chain technology? No: it’s just extraordinarily unlikely. Moreover, the tech we think will be foundational to huge changes in our society is usually just a short time away from the dust-heap and utter abandonment. But, that very fact indicates how far our world will change: it will be so different that even the miracle tech of today will be considered corny and archaic in the longer term.

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