I heard an interesting sermon this weekend by a rabbi, and one of the things he talked about that intrigued me was the difference between being “on the cutting edge” of something (in this case, religion and spirituality) versus being “on the growing edge.” The cutting edge implies a break with the past, a separation between old and new, and there is often some level of pain, risk, and uncertainty involved. The growing edge, in contrast, implies moving in new directions while staying connected to what came before. The rabbi used the analogy of a tree, where the roots and trunk provide nourishment and support to the new branches, twigs, and leaves growing at the edges.
This got me thinking: What are the cutting and growing edges of logistics today, and which one is the better place to be?
It’s always good to be on the cutting edge of anything if you succeed in changing the status quo and emerge as a leader (think Apple with the iPod and iTunes). If you fail, or don’t emerge as the leader, then it’s not so good (think Netscape, Napster, and countless dotcom startups). The rewards of being cutting edge are great, but so are the risks. Being cutting edge is not for the faint of heart, but thank goodness there are plenty of cutting edge people and enterprises out there. Without them, there would be no bold innovation.
In my opinion, the last “big thing” that occurred in logistics was the development of the standard shipping container, a cutting edge innovation that truly revolutionized the industry. Malcolm McLean, founder of Sea-Land Service (later sold to Maersk), introduced container shipping in 1956. Two years later, Matson Navigation Company initiated container shipping in the Pacific. Although it took more than a decade for containerized shipping to gain broad adoption, the impact on port productivity in the years that followed was dramatic. Simply stated, global trade as we know it today would not be possible if the time to load or unload a ship was still measured in weeks instead of hours.
What is cutting edge today? On the technology front, I think the emergence of hybrid wireless devices (GPS+cellular+RFID+sensors) and the vision of having an instrumented supply chain fits the bill (see “Everything Will Be Tracked Wirelessly in 10 Years“). I view what Kiva Systems and others are doing in the world of material handling as breaking new ground. And software-as-a-service can also be viewed as cutting edge, not only as a business model, but as a platform for enabling benchmarking and network connectivity (see “More Questions About Software-as-a-Service“).
The terms cutting edge and Logistics Service Providers don’t usually go together. But in terms of breaking away from past practices, I view performance-based outsourcing as a cutting edge approach to structuring and managing LSP-client relationships.
What about the growing edge? I believe this is where most technology vendors and logistics service providers reside today. For example, as I wrote about recently, software vendors are “expanding the footprint of TMS” by embedding fleet management, parcel shipping, and global trade management capabilities within their core applications. Appointment Scheduling and Yard Management are also good examples of “growing edge” applications-they connect with “what came before” (WMS and TMS), but they also extend these applications in new directions (a recent briefing by Descartes Systems on how CVS is using its dock appointment scheduling solution opened my eyes to this point). The same is true for “green” solutions like carbon information management. At first glance they may appear cutting edge, but they’re really just taking existing business intelligence solutions in new directions (see “A New Business Intelligence Solution…from a 3PL!“). If I had the time, I could cite countless other technology examples.
The growing edge for LSPs are (among other things) further penetrating the small and midsize business (SMB) market; further integrating resources and assets to create more “end-to-end” solutions (see Con-way’s recent announcement); serving as a channel for software-as-a-service solutions; and extending their presence in growing vertical industries such as healthcare.
So, is it better to be on the cutting edge or the growing one? This question is a bit flawed because one is not necessarily better than the other. You need to be on both. In this economic environment, the natural tendency is to focus on the growing edge, to leverage what you have and extend it in new directions. But ignoring the cutting edge all together would be a mistake (the iPod, after all, was introduced in October 2001, a few weeks after 9/11, in a difficult economic environment). Leaders are not paralyzed by the risks associated with taking the cutting edge; they are propelled forward by the opportunities. Deciding which edge to cut is the real question companies must answer, a difficult decision that could make all the difference in the world.
Don’t you think there is more to be gained from extracting more value from the technology we already have? Maybe you categorize that as part of the “growing edge”. I think sometimes we need to focus on “sharpening our pruning and trimming edge” to focus on leveraging existing underutilized capabilities/technologies.
balaporiaz,
Absolutely. Many companies are underutilizing their existing IT systems. You might think you need to buy a new piece of software, for example, when what you really need is a training refresh on your existing application.
The point of my piece was where should IT vendors and LSPs focus on in terms of developing new products and services. But from a customer perspective, your comment is right on target. If you plan to make an investment, make sure you really need it.
A.
In terms of RFID technology…I completed an online course and found it to be very helpful. For some, there’s much to be learned about the technology that is already out there and how it can help a company’s bottom line. http://cscmp.org/events/educational/rfid-web-training.asp
As an industry that is infamous for its relatively slow adoption of new technology and change, certainly the logistics and transportation industry can benefit from both the growing edge and the cutting edge. Some industries have to be concerned about the “bleeding edge”, but this is an industry that has more risk staying in it’s stale archaic methods than venturing into modern solutions.
Gary Silver
WDXfreight.com