Property and Infrastructure Specialists

Transforming logistics – should we aim for ‘industry standard’?

The logistics and supply chain sector and its flow-on into property and operations is changing rapidly, accelerated by COVID-19 and a maturing of customer expectations.
Transforming logistics – should we aim for ‘industry standard’?

This puts pressure on businesses to change and evolve. But to what? The major high street supermarkets have large divisions focused on analytics, planning and investment to help plot a path to the next stage of business evolution. And if they don’t get it quite right, they are resilient enough to adapt and overcome.

But for most businesses, this isn’t an option when the change anticipated is transformational. It carries huge risk and recovery can take many years. So, the question often asked is, what is everyone else doing? There is a desire to change but not to innovate… Let the businesses with deeper pockets conduct the experiments.

Which brings me to ‘industry standard’. For me, this is an often-misunderstood concept. 

Suppliers of solutions will talk of ‘industry standard’ as the way to go… if everyone else is doing it then it must be tried and tested and guaranteed to work? Yes and no.

On the upside

Industry standard is familiar. There is a vast array of information and experience to back it up. 

For suppliers, a standard approach helps them. Bespoke solutions take time, they cost more and look uncompetitive against the norm… and they are right.

And the downside

Industry standard is often one size fits all. In an industry as competitive as this with margins as tight as they are, standard can mean missing out on peak efficiency.  

The main consideration is risk

In my opinion.

An industry standard approach to a solution means accepting an industry standard approach to risk. This is what isn’t discussed or explained up front and often only becomes apparent later.

I will explain by way of an example:

We were asked to investigate a large, modern ‘industry standard’ industrial facility that had experienced several operational failures since opening. Historically, this client had over-engineered facilities in a risk proofing approach that came with significant cost and had never experienced failures of this type before.

Investigations did not point to catastrophic failure, bad design, or workmanship. The problems arose because the ‘industry standard’ design had inherent risk levels that were, in hindsight, unacceptable to the client. Such as:

  • single point failures;
  • operating procedures that forced shutdowns rather than warnings;
  • higher maintenance cycles, again forcing shutdowns; and
  • operating systems that were not directly compatible with client systems, etc. 

These issues are now being addressed to align the facility with the client’s operational risk requirements.

So is industry standard a bad thing? No, not necessarily. But it is important to understand what it means for your business and how the risk will impact you specifically.

Industry standard is not a bad approach, but it does need to be examined, understood and tuned for your business by:

  • Understanding the operating risks of the standard solution and how these will impact your operation.
  • Consider a gap analysis between industry standard and optimised bespoke solutions. What can be done to narrow the gap efficiently and economically?
  • Focus on the future life of the installation. How does it align with where your business is going? Is it flexible? Adaptable? Or does it lock you in?

Contact Paul to discuss your specific requirements.

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