Mhlnews 866 Bert Moore

Data Intelligence: Unexpected Benefits, Unintended Consequences

Sept. 1, 2008
Just as it's possible for there to be unexpected benefits, there can also be unitended consequences, which can sometimes bring unanticipated business opportunities.

The history of the automatic identification and data collection (AIDC) industry is rife with stories about companies reaping unanticipated benefits from implementing an AIDC system and, in a few of these cases, these unexpected benefits actually paid for the system before it was turned on.

However, just as it’s possible for there to be unexpected benefits, there can also be unintended consequences, which can sometimes bring unanticipated business opportunities.

Bear with me here. Let’s take, for example, the automobile, from its humble beginnings to today. The introduction of the Ford Model T in 1908 and the English Austin Seven in 1922 provided the impetus for today’s automobiles. The Model T was mass-produced and affordable, which put motoring within reach of the average family, and the equally affordable and popular Austin Seven eventually standardized the placement of clutch-brake-accelerator pedals. These two key factors—affordability and standardization—prompted the expansion of the motor vehicle industry.

However, the popularity of motor vehicles created a tremendous upheaval in the national and local infrastructure (with the need for better, more and paved roads) and corporate and consumer culture (more products to more places more quickly and a more mobile population). Better roads enabled trucking companies to compete with railroads, which, in turn, led to increased urban congestion and air pollution. And, that is leading to the adoption of hybrid, electric and alternate-fuel vehicles.

Early on, replacing a team of horses with a motor could be seen as a way to help reduce congestion in cities by doing away with the space needed for horses, not to mention the byproducts of horse-drawn vehicles. However, with improved roads, there were more vehicles bringing in more goods to satisfy a growing demand for increased variety. This resulted in more crowded cities and even greater congestion. This congestion spurred the expansion of underground and elevated railways.

So, we could say that the advent of the motor vehicle in the latter part of the 19th century was key to the expansion of urban light rail systems.

Anyway, you get the idea. Today, changes in technology or business practices do not happen in isolation. Early improvements may bring unanticipated consequences. However, consequences may also bring opportunities.

For example, improved inventory accuracy enables sales personnel to make firm (and honest)

Bert Moore
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commitments of products to customers; accurate sales figures enable better forecasting; and better forecasting may enable smaller production runs (a smaller safety net). All of this may put an unexpected strain on your logistics providers (the consequence). Strain on the transportation logistics side may force improvements in tracking and reduction in handling of goods, which will provide better visibility and enable more accurate receiving, which improves inventory accuracy, which…

At first glance, all this is marvelous. However, each change may have consequences for your company as well as its trading partners.

Can existing infrastructure and corporate culture handle the additional load? Will smaller orders and shipments mean changing from full-pallet shipments to parcel carriers? Will receiving and putaway (and picking and shipping) be able to cope with small, mixed loads rather than full pallets? Will the warehouse have to be redesigned? How will the flow of material to the floor be managed in smaller increments? Will employees embrace changes? Will trading partners cooperate?

Implementing any new system will bring about unintended consequences for which you can’t plan. What’s important, then, is to handle them correctly to make possible the unexpected benefits.

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