“Hans Ketterings, CEO of Yellowstar, and Hans Hulsinga, associated with the UC Group as a Logistics & Supply Chain professional, exchange emails about logistics topics that they both find interesting.“
Dear Hans H.,
Are you familiar with Maslow’s pyramid? This describes the needs that you and I have in a number of logical, subsequent steps. First, you require food, next you need security and safety, followed by social contact and then self-actualisation. And no, it is not possible to skip any steps. An example: you will not go out with friends for a good time while you are starving. This is commonly understood, except when it comes to automation.
Here, we also have a pyramid, but now from Nolan. In six steps, this pyramid describes the stages of maturity which an organisation has to go through. It starts with an Adidas network, via MS office, to an island app environment. This is followed by an integrated total system and management information. The highest level is a decision support system. Here too, there is a clear hierarchy. Every growth step in IT maturity elevates an organisation to a higher productivity level.
Just like the social layer in Maslow, Nolan states that you would actually need to at least reach the integration level (step 4) in order to be able to properly cooperate in the chain. After all, you want to offer your customers good and correct data and be able to engage in a dialogue that has been devised ‘from the outside in’. Fortunately, software houses have come up with numerous solutions to help a carrier or shipper with automation over the years. Think of an ESB (Enterprise Service Bus), for example, a digital power strip to connect internal and external systems. This makes it easy to take the first step towards chain cooperation!
For both transporters and shippers, I still see a lot of room for improvement. Some common mistakes that I have come across:
- Customer portal on a shared solution
- Advanced planning solution to replace an Excel planning environment
- Control tower on a disintegrated application landscape
If you are looking to switch from an MS Office environment, in which you are accustomed to doing everything with Excel, Word and email, to a fully integrated ERP solution, you can expect little support from your users. The step is simply too substantial. If you want to gain enough support within your organisation, then you need to offer your users the opportunity to develop in line with the Nolan pyramid. Gone are the days when the best driver would become a planner. The level of education among logistics service providers is clearly increasing; we are seeing more graduates with higher vocational and university diplomas. This does not just apply to the IT department, but also to management and end users. The only way to achieve a higher productivity level is by means of a phased growth regarding both IT maturity and team composition.
Dear Hans K.,
Those pyramids are a strong metaphor. I too needed to grow in terms of IT. When I returned to school after my summer vacation in the early eighties, I found that they had added a computer room full of PCs. Remarkably, this was solely intended for so-called VWO B students, students in pre-university education with a strong emphasis on the sciences and mathematics; Richard Nolan should still sue them! Apparently, the underlying idea was that this was where the true programmers could be found, but in the end we did all became super users though. A VWO A student like myself, with less emphasis on the sciences and mathematics, had to learn autodidactically. With a lot of trial and error, I got to where I am today as a user.
This learning process continued in a professional setting when I landed my first job in shipping. They were using a real mainframe and all bills of lading and manifests from China were retyped in the Softpak system, so that we could print them out and attach them to the General Declaration, the customs clearance document. Looking at where companies are in terms of their IT maturity in 2020, it is almost impossible to imagine such a process.
However, I still come across companies where the supply chain is largely managed by Outlook and Excel. That situation is recognisable and not completely surprising. Often because this works fine, until growth causes this process to crack on all sides. Then, the next step towards an integrated IT system is substantial and difficult to justify internally. IT simply costs time and money and yields nothing in the short term. Speaking from experience, my advice is therefore to take the time to think and to plan the steps to structurally grow towards IT maturity.
A pyramid was difficult to build and the process took about 20 to 30 years. Also a matter of taking time, planning very carefully and not making decisions on an ad hoc basis.