You can't just buy your way to lights-out capability, says Al Mendoza, U.S. and Americas supply chain leader at EY. One must balance technology, data and process transformation.
Lights-out manufacturing and shipping are taking place, but for the promise to become widespread reality, fundamental building blocks must be in place, and that isn’t the case in many organizations yet, says Mendoza.
It’s easy to think you can leapfrog or buy your way to lights-out capability, he says. “It's really seductive to say, ‘What's the latest technology? What are things that we can buy?’" Organizations must not be blinded by the next shiny object because technology changes so rapidly, in some cases every three or four months.
In fact, what most people think is the most important element – technology – is usually the least important, he says. “The most important is having the right foundation and management systems that empower the people. Those are the things that when you look at leading companies, they believe their moat against other competition is not the technology itself. It's those business processes. It's a culture and a commitment from their leadership that truly creates a moat.”
But what is the right management system? “Maybe the easiest way to say that is how is leadership empowering their people to make decisions aligned to business strategy and to their values? When they can't answer that question, then they believe they can create an agent that will do that automatically.” Mendoza disagrees.
There simply aren’t enough people out there who know the latest technology, he says. It’s imperative, then, to create an ecosystem that has the ability to improve the skill set of existing employees. “You're going to have to have the foundation in order to improve your people, and then to take that knowledge and really digitize that,” Mendoza says.
