Will the IoT Revolution Force Government to Embrace Silo-Busting?
The Internet of Things (IoT) is triggering changes that cross corporate silos and force companies to look holistically at their end-to-end supply chain practices—can governments do the same?
I recently had the privilege to provide a testimony before the U.S. Senate Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security, on how the IoT impacts supply chains, logistics, and the movement of goods. The purpose of the hearing was around the DIGIT Act that creates a working group tasked with providing recommendations that focus on how to plan for and encourage the growth of the IoT.
While my fellow panel members focused on recommendations around issues of data privacy and internet infrastructure related to IoT, my testimony focused on how the technology impacts global supply chains. On behalf of C.H. Robinson and the Transportation Intermediaries Association, I argued that the greatest challenge governments may face with regard to the development of the IoT is breaking down internal silos and working in cross-functional teams, much like many companies are doing.
Collaboration is key
Today’s global supply chains span multiple geographies and disciplines, including production, customer service, marketing, sales, and finance. This is necessary in order to deliver the market agility and standards of service that customers expect.
This multi-disciplinary approach is also essential in managing the IoT challenge, which touches every corner of the enterprise and each link in the chain. And its influence is growing. For example, we are expanding the tools and information available to all trading partners across the supply chain. A single truck owner operator can use an app to perform a tracking check call just like a GPS-equipped truck without ever picking up the phone. Similarly, a global shipper can view that tracking update anywhere in the world via a phone, PC, or tablet.
Similarly, government agencies need to adopt this kind of cross-organizational approach if they are to keep pace with the growth of IoT applications and innovation within the supply chain domain.
Consider, for example, the risks posed by customs-related delays. The IoT gives companies the ability to source parts and sell products globally. And it enables consumers to buy directly from overseas retailers and manufacturers, helping to drive the rapid growth in ecommerce worldwide.
Interruptions to this flow of commerce are increasingly costly. For example, in the U.S., if the Automated Commercial Environment (ACE) system goes down for two hours during produce season in San Diego, or the U.S. Environmental Protection Agency holds up a shipment at the Port of Baltimore because the agency is understaffed, the delays can quickly ripple through the entire supply chain.
Effective communication and coordination between the customs services and other government agencies is crucially important if these types of snafus are to be minimized or eliminated where possible.
Maintaining a lead
An immediate goal is for governments to make sure that their customs agencies provide world class services and are able to work well across agencies to ensure the safe and efficient movement of goods.
But they can’t stop there. This inter-disciplinary ethos must be part of any government response to the growing influence of the IoT on the supply chains that support markets worldwide.
Any government that remains bound by silos will find it extremely difficult to maintain a leadership position in the area of technology and innovation that is reshaping world trade. More agile governments will lead the way in innovation while rigid institutions fall behind.
Next week, I’ll share recommendations and insights around how an increasingly connected world impacts policy, society, and the flow of goods around the world.