GAINS On: 2024 Supply Chain Trends: Hip or Hype?

Joe Davis (00:01):

Welcome back to GAINS On, the podcast where we dissect the complex world of supply chain management. I’m your friendly neighborhood podcast host, Joe Davis here to guide you through another episode that promises to be both entertaining and enlightening. Today we have something special in store for you, a bonus episode, a segment we’re calling Hip or Hype. We’ll be joined by Bill Benton, co-founder of GAINS, diving into the latest trends in supply chain management and separating the wheat from the chaff. In this session, Bill will use his extensive industry experience to break down current supply chain trends, giving us his expert take on which innovations are genuinely transformative solutions, and which are just buzzwords. From AI and machine learning to blockchain and IOT, we will explore what is really making an impact in the supply chain world and what might be just smoke and mirrors, get ready for an enlightening journey through the evolving landscape of supply chain technology, right here on GAINS On.

(01:03):

I thought if I could, I’d like to take a minute. There are some other things, some words, some terms that keep kind of popping up. Do you mind if I just do a quick lightning round with you to sort of, I throw out a term and you tell me, I think you mentioned before, it is something that is either hip, we should be using it or hype, it’s just a lot of noise and might not be a practical solution. Would that be something you’re open to?

Bill Benton:

Yeah, as long as I can have a waiver not offending people at having editing rights.

Joe:

Ah well, we’ll see. We’ll [inaudible]

Bill:

I can live with that, uncertain.

Joe:

Right, Yeah. I won’t mention any names or solutions by their actual names.

Bill:

Sounds good. Fire away.

Joe:

Yeah, change the names. Protect the innocent. Alright, so first one, something that I hear come up a lot when talking about supply chain technology is blockchain. My familiarity with blockchain has to deal with cryptocurrency, which is for another podcast to deal with.

(02:03):

But if we talk about blockchain in supply chain, is that something that’s likely to play a role in the future, or is it just sort of hype?

Bill:

No, I would classify that as yesterday’s hype, but I think it’s a current object lesson to be cautious. Just digressing to our earlier part of this discussion, that it was one of the classic cases of a solution chasing a problem, rather than seeking solutions for a problem. So they had this blockchain technique, you had a lot of hype around it, people trying to sell their cryptocurrencies—I won’t go off on a rant there. But this idea that because it works there perhaps in a meaningful way, that we should use it here. It’s sort of a classic case of that. So I’m going to classify that as yesterday’s hype and today’s object lesson.

Joe:

Got it. All right. How about the IoT, the Internet of things, this idea that there are internet connected devices everywhere, constantly communicating with each other. Is that something that we’re likely to see continue in supply chain or play a role in this industry? Or is it again, sort of, it’s just a solution seeking a problem?

Bill (03:19):

Yeah, I mean, if you think about a hype cycle right, some hype matures into something that’s hip or at least useful. Some hype, you know just sort of disintegrates. And I think we’ll see blockchain mainly in that ladder category, but IoT, I would classify as moving from hype to hip, at least in the supply chain planning context. There’s other areas that are quite mature and I guess you could call it hip per se, but from a supply chain planning perspective, I would say it’s moving there, and you know there’s a few real meaningful applications including taking real time transport visibility. So if we have a tag on a container that’s somewhere between Asia and Albuquerque, we can see where it is and we can continuously update things like, “when can I expect it to arrive?” And based on that, give better promise dates to my customers or make alternative plans to supplement if it’s coming in late, et cetera. And then secondly, we’re seeing things like telemetry data, measuring vibration or temperature, things that are outside of normal ranges as great ways to predict a repair event and pre-position inventory and supply to be able to handle those events before they occur and an order has to be made and then you have a delay in supplying that. So from hype to hit on that one.

Joe (04:48):

Gotcha. All right. Now there’s a term that I’ve heard a lot, and it’s, there’s the term digital planning. I have yet to see a good definition as to what digital planning is. So I guess I’m going to come to you for that definition. What is it?

Bill:

I’m going to put that, yeah, I mean, I’m going to put it in the hype category because it sort of means whatever you want it to mean X post. And what I mean by that, is I believe it’s either implicitly or explicitly vague.

Joe:

OK

Bill:

Sometimes people don’t want it to be vague, but they really can’t define it, and sometimes it’s a conveniently vague term. So I would say it’s hype, and I think it’s a distraction from aligning specifically around objectives, because technically every operation that occurs on a computer is quote digital quote.

Joe:

Right

Bill:

So it has this amorphous sort of denotation. And so I’m putting that in the hype category. I think it’s, it’s more harm than good.

Joe:

Is that up there with digital transformation sort of the same animal where it is like, oh, or does that just mean we stop using spreadsheets and now we do it on a computer?

Bill (06:10):

Well, there you go, right? The answer is yes, all of the above. So some people think of it as moving from Excel to a enterprise based solution. Some people think of it as moving from ERP to a best of breed. Some people think of it as any large scale investment in technology. So it’s quite vague.

Joe:

So It’s another one of those vague blanket terms where you can make it sound like you’re actually doing something.

Bill:

I would say it’s a great way for some people to sell really big projects.

Joe:

Nice.

Bill:

The answer to hard questions.

Joe (06:52):

Excellent. All right. So next time my boss calls me, I’ll just, sorry, I’m tied up in this digital transformation, I can’t help. Here you go. How about, let me see, another one was just in time inventory, the JIT inventory, right?

Bill:

You know, I would say that falls into this sort of launching category, which is, it never really was a strategy. So I would say it’s hype as a strategy that can be utilized. It’s really a reflection, it was a reflection of buyer power where certain extra large organizations could push the uncertainty management and therefore buffer inventory upstream to their suppliers who are smaller than them. So you know I do think there is a first cousin of this that is hip and maybe a little bit more current, which is Just in Case. And the concept of Just in Case, I think brings in the notion of resilience and how do you invest in these anti-fragile strategies that allow you to manage through profitably and better than your competitors that don’t do this, these large and difficult to predict volatile events, demand or supply related.

(08:24):

So I would say JIT was mostly hype as a strategy, but it did give birth to this idea of Just in Case, which I think is a very useful and hip notion. I sit any very loose terms here.

Joe:

Right, right. Yes. I don’t think they’ll be writing any jazz songs about Just in Time inventory, but

Bill:

Nice.

Joe:
That just goes to show what I think is hip is also not hip.

Bill:

My 16-year-old son reminds me of that every time.

Joe:

Yeah, I hear you. And there’s one, and I know we’ve discussed it, you and I have discussed it in the past, but I want to get in a little bit more just the idea of DDMRP is demand driven.. I don’t know what the MRP stands for, honestly. I know what’s demand.

Bill:

Yep. Manufacturing requirements planning.

Joe:

Ah, okay. Yeah. So DDMRP: hip, hype?

Bill (09:20):

I’m going to say hype. And again, sort of a dangerous distraction because the entire concept completely discounts any value of doing better prediction and managing uncertainty. So it just looks at how volatile are prior events. But for example, if you look at a seasonal demand profile, right? So using something extreme: Halloween candy. Halloween candy sales are extremely volatile, but highly predictable, right? So things like DDMRP ignore the fact that you can do good prediction. And then secondly, if there is a hard to predict series of events, demand or supply, it really doesn’t have good tools for managing that. So I would say it’s hype and can be a dangerous distraction from doing those other things better, like prediction and uncertainty management.

Joe: (10:19):

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