5 Supply Chain and Logistics Myths Debunked!

Supply Chain and Logistics Myths

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Every industry has its own set of myths, falsehoods, and urban legends. The realm of Supply Chain and Logistics myths is no different.

Consider the following questions. Is the global supply chain fully automated? If not, why not? What about the role of technology in transportation? Is it dominant or absent? Do supply chain jobs go to the most educated candidates, or are there other, more relevant factors that play in the decision? Will AI and other varieties of tech-based systems replace human beings soon?

Do commercial business leaders seek to minimize costs, or do they engage in another pursuit? What causes shortages? Is automation always a good, productive thing, or can it cause problems? Those queries are at the root of the most common supply chain myths.

Here are more details, along with a thorough debunking of each of the Supply Chain and Logistics Myths.

1. The Supply Chain is 100% Automated

While automation plays a substantial role in the production of millions of products, the logistics chain is far from automated. From beginning to end, the movement of goods from the point of production to the end consumer is anything but streamlined. Dozens of companies, individuals, and institutions oversee the lengthy process.

However, there are parts of the chain that are automated, but as for the entire supply chain being on autopilot, that’s a myth that began about a decade ago when software developers began offering sophisticated products that streamlined supply chain planning and logistics. The human element is still very much a part of moving goods from Point A to Point B.

2. Fleet Management is a Low-Tech Discipline

The task of managing transport fleets is a high-tech affair, replete with sophisticated software systems and other computerized solutions for everyday operational efficiency. One of the many examples of technology supervisors use is the network video recorder, or NVR camera system, an array of devices that give managers full visibility of what’s happening with drivers and shipments in real time. Owners aim to maximize efficiency, driver safety, vehicle security, and many other parameters. 

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It’s imperative for those who use such solutions to understand how they work and how to shop for the most suitable systems for their companies. A smart first step is to review a complete guide that explains which features of NVRs are the most useful. A few of the essential things to look for are a VMS (video management system), RA (remote access) to filmed footage, the ability to store in the cloud, high-end IP cams, and proven reliability.

3. Jobs Go to the Most Educated Applicants

In the 2020s, most supply chain-related corporations and small independent operators are experiencing a shortage of qualified workers. There’s still a widespread belief among college students that it takes an advanced degree or years of specialized training to land a job in the field.

The reality is quite different. Hiring agents are more impressed by applicants who demonstrate an ability to learn on the job and have the desire to spend their working years in the industry. That’s not to say that college and graduate degrees are ignored by interviewers.

Any general business, liberal arts, or science major can and should apply for logistics-related positions if they wish to break into the industry and build a financially secure career.

4. Cost Cutting is the Number One Goal

The old cost cutting myth has worked its way through most business sectors during the past two decades. Now it’s showing up in logistics-related discussion forums and continues to trick countless readers and casual observers. In its basic form, it mentions management teams prioritize cost reduction over all other goals. On the surface, the myth sounds logical. In the real world of operations, it makes no sense at all.

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Decision makers and top-level budgeting operatives seldom aim to minimize expenses. What they want is to get the most bang for their buck by maximizing efficiency and eliminating as much wasteful spending as possible. The main point is that spending money, in and of itself, is not a bad thing for any entrepreneur if the capital generates a profit.

Anyone can reduce costs by selling productive assets, but why do so when spending is creating a net gain?

5. More Automation Means Smarter Production

The misconception about automation has been around for decades and pertains to multiple industries. Although there are ways logistics companies can save with AI it’s not unique to logistics or supply chain concepts. While automated production can be a faster, less labor-intensive way to bring inventory into existence, it is not a universally applicable technique. Many high-priced goods are processed and packed by hand on rudimentary assembly lines.

High-end vehicle manufacturers shy away from full automation because it’s difficult to calibrate production to volatile consumer demand. Consider the dilemma of small entities that create unique items for sale to the public. Automation serves no purpose for them at all. In general, automation has its place in very large companies that enjoy relatively steady and predictable consumer demand.

Supply Chain and Logistics Myths article and permission to publish here provided by Drew Allen. Originally written for Supply Chain Game Changer and published on April 26, 2023.
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