Why Amazon drones should be the least of your worries
From a procurement and business process perspective, it really got me thinking about what is possible and what I am doing not to be left behind. We all accept the web removing the ‘middle man’ and at a personal level we are very comfortable about buying direct rather than driving to the mall. But have we transferred that thinking into our organisations?
From little things big things grow. How would you feel if your revenue stream was earned from the delivery service in the supply chain? Why would you need Fedex? Given that price is a major element in all buying decisions, you imagine that Amazon will be able to deliver your shopping using a drone faster and probably cheaper than Fedex with a man in a van. This concept of removing cost in the supply chain will probably, faster than we like, define your organisation as an ‘A’ type operating at a lower cost than the ‘B’ types. And hence the winners quickly distinguish themselves.
How soon will it be that only government regulations will stop my books being delivered to my door (shipped ex USA) by machines with no human intervention? When will it be that my Saturday night pizza is no longer delivered by the kid next-door? As far as I am aware none of the organisations I deal with have in train disruptive plans the scale of Amazon. However there is a clear emerging group that are focussed on reducing the cost of delivering their service or goods to market. These organisations are all at different stages of the journey but they are all marked by focus on increasing automation of process and planning.
It seems to me that the low hanging fruit of efficiency, which is available to all organisations, needs to be quickly dealt with so the focus can be on the more fundamental elements of the organisational value chain. One would think it is a given that all organisations today are able to electronically process sales and purchase orders at the lowest cost, lowest error rate and least amount of double handling, all within the organisation’s governance framework. So next look at the rest of your inefficient process and planning.
It is probable that if you are DHL, Fedex or Australia Post I think the Amazon drone will be keeping you awake at night. In my opinion if you are not DHL, Fedex or Australia Post and you have not addressed the low hanging fruit you should be kept awake at night.
What low hanging fruit looks like depends on your type of organisation. I recently had occasion to see what Belcher Industries, an engineering company who are focused on process automation and cost reduction, had achieved in 12 months. Maybe it is biased to use them as an example as the organisation already had a culture of high performance and professionalism and the formalisation of the processes was the next step up. They formalised, removed paper and delays (white space) with 73 new processes, using XMPro, in the following areas. We don’t often see such a fast start but their commitment has delivered results:
- customer management
- job control
- time keeping
- meeting management
- personnel management
- human resources
- ISO management
- health & safety
- equipment management
Good practice and business performance means you need to review all your costs and seek ways to reduce the costs and errors in your value chain. The headline actions are often in the warehouse and the factory but the not so audacious or sexy wins are to be had in the Office of Finance. The disruption may not be as ‘flashy’ as a drone but the disruption has and will continue to come to your Office of Finance. Is the drone a call to action for you in planning, electronic procurement, sales orders and business processes?
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