On Demand News: 04/17/18

Of Managers And Machines

17 April, 2018 // A few weeks ago, we wrote about the limits of technology for supply chain, echoing the Wall Street Journal’s point that an over-reliance on artificial intelligence can be dangerous. The week, two stories with opposing perspectives invite us to revisit the debate, as they demonstrate the tension inherent in finding the right balance in a future of managers and machines.

Arguing for the machines: In an interview with Forbes editor Rich Karlgaard titled “Digitize or Die,” VMware CEO Pat Gelsinger discusses what he calls the “four superpowers of technology”—cloud computing, mobile, the Internet of Things (IoT) and artificial intelligence (AI).

“Cloud is supercomputing power at unlimited scale,” Gelsinger explains. “Mobile is unlimited reach. IoT is unlimited access. AI is unrivaled intelligence. It’s the cascading effect of those four things coming together at this point in time that’s ushering in the fastest piece of technical evolution that’s ever occurred in the history of mankind.”

In Gelsinger’s view, harnessing those superpowers for competitive advantage is “existential” for every business. Companies that shirk the investment and process redesign required to adapt to a superpower world may not realize that they’re planning their own future funeral.

Company leaders may be making final arrangements anyway—even if they go all in on Gelsinger’s Big Tech future. And, who better to educate on the subject of visionaries with existential crises than Elon Musk at Tesla Motors?

Back in 2016, Musk argued that the factory, itself, was the product. “We realized that the true problem, the true difficulty and where the greatest potential is—is building the machine that makes the machine,” he told shareholders. (Stop us if you’ve heard that one before applied to our industry: “The supply chain IS the product.”)

In Tesla’s case, the automation became crazy complex—and completely unmanageable as the company sought to scale up its Model 3 production. In the end, Musk made the call to shut down his line entirely—twice—to rip out some of his robots and start over. In an interview this week with CBS This Morning’s Gayle  King, Musk admitted that the robots were the ones slowing things down.

Where does that leave those of us who have to make decisions about supply chain optimization? Firmly on both sides of the issue, as it turns out. Morgan and its sister company, ChronosCloud, have seen that bad decisions regularly come from lack of digitization. So, we work hard to connect the unconnected transactions in the in-transit process. Gelsinger is right: In agile hands, today’s technology superpowers can turn executives into superheroes.

Still, we never lose sight of the fact that it’s our experience and expertise that allow us to find the right insights to improve efficiency and cost. When you’re hiring a strategic supply chain partner, we suggest you start your evaluation with a review of those bona fides before moving to the technology.

As Musk tweeted last week, “Excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”