Being unique in meeting consumer demand is a losing proposition. Winners use standards to their advantage.
In many walks of life, being unique is a desirable trait. If you’re applying for a job and competing against hundreds of other candidates, the last thing you want to be is “standard.” You want to stand out from the crowd—in a good way, of course.
But Daniel Napoli is in a business where being unique is starting to hold people back. That business is yours—material handling and logistics. Napoli is senior vice president of R&D for Knighted, a logistics software company that was acquired last year by Intelligrated, providers of automated material handling systems. Napoli founded Knighted and was its CEO before the acquisition. One thing that started bothering him as he toured more and more logistics operations was the stated desire of the operations managers to achieve a competitive advantage by doing something different.
“Long term we have to stop thinking that way,” he told me. “People have to get to the point where they can’t keep reinventing new processes and procedures. It’s better for them to use standard procedures because then warehouse workers will know how to do a job the right away. Many companies are afraid if they give up their perceived competitive advantage they’ll be the same as everybody else. But sometimes their competitive advantage is hurting them by adding functionality. More standardization of processes in the DC makes a lot of sense.”
This sentiment is a major theme in the Material Handling Roadmap to 2025, which MHI currently has out for industry review. One section states that standardized modular interfaces between software systems will support collaboration throughout increasingly virtual organizations. In fact it goes on to say that highly customized or in-house developed systems are becoming less common, and that by the year 2025 most applications accessed by logistics and supply chain professionals should be cloud-based. Considering supply chain systems and their data to be proprietary is counterproductive in this vision.
“The data produced by sensors and exported from software must be shared universally to enable the real time decision making that will satisfy customer demands and support the Internet of Things,” the Roadmap’s authors state. “As long as data are considered proprietary, this kind of sharing cannot happen.”
In my conversation with Napoli he detailed why supply chain standards are so important to business success. Without them, a rapid, agile response to a customer placing an order for something they see through their Google Glasses will be more difficult. E-commerce has raised the bar for that response, making same-day and next-day service the new competitive benchmarks everyone will shoot for. Having a voice picking system that’s separate from a warehouse control system that’s separate from a warehouse management system will be counterproductive. In fact he believes that the integrative role a WCS plays may start overshadowing the traditional idea of a WMS.
“The term WMS may start fading away and WCS will be a bigger part of the process because that’s what handles all the automation and the inventory may still be owned by an ERP,” he said.
That will facilitate end-to-end visibility, he maintains, and therefore, the ability to respond to customers quicker.
“You’ll be able to tell a retail store when their order will be delivered based on when you placed your order to the factory to have it made,” he said. “Today a lot of the stores don’t know what they have until they open the dock door. What needs to happen is to let the store know what’s coming and what departments it will hit. So much still needs to be done.”
So much to be done and so little time. 2025 is less than 12 years away. By then Google glasses may have gone the way of Grampa’s bifocals.