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Supply Chain Challenges, Logistics Technology, Logistics Labor Management

Is it Technology or People?

Kane Logistics | January 16, 2013

We've heard the advocates for both sides of this argument make compelling cases for why companies should invest in either technology or people given limited resources.

The technology supporters proclaim that in today's fast paced, digital society, we should invest in the best technology for speed and visibility.  

Those who champion people state that "no matter how sophisticated technology becomes – people still need to operate it."  Another argument goes that if you rely solely on technology, you'll lose that intimate customer touch.  Furthermore, these proponents say that an investment in right people will last far longer than the investment in a piece of technology.

So, who's right? 

I'd suggest that both sides are.  However, both sides are far too narrow-minded to understand the value of the other side of the equation.

Technology is great when it's designed, but it becomes out of date once it hits the market.  Much like the new car that loses a significant percent of its value once it gets driven off the lot.

People are the driving force of any organization.  However, in order for people to strive to perform and innovate, continual investment in training, education, and communication should be made.

In today's business environment, great companies are those that employ the latest technology coupled with the best talent.

In the 3PL industry, where historically outsourcing has been done to lower labor cost, it can be a particular challenge to do both, though top 3PLs are focused on succeeding on this task.  They are investing in Tier 1 applications, as well as specific logistics technology such as WFM (Work Force Management) software, allowing management to understand the detailed cost of labor on their operations.  The great companies are also using technology not simply to drive productivity with lower cost workers, but to implement 'Pay for Performance' models so that companies can attract the best associates because they can earn above average wages for the industry.

Moral: the continual investment in new technology and the right people will take a company from Good to Great – proposed and made famous by Jim Collins.

What do you want your company to be? 

Good or great?