There have been a lot of supply chain learnings as a result of the COVID-19 environment and there is nothing more important than the lesson of technology. Technology has separated the haves and have nots in just about every industry. Those companies which have been able to adapt are thriving even in this stressful time. Those who did not have the core technology available, or have been unwilling to invest in the technology, have suffered and many have filed bankruptcy.
As if to prove this case, look at a 4 industries and you will see they have come down to duopolies or maybe three to 5 companies which own the industry. Think of this:
- Home Improvement - Two huge players in Home Depot and Lowes
- General Store Retail - Target and Walmart
- E-Commerce - Amazon and Wayfair
- Pure Technology - Apple, Google (Alphabet), Facebook (Advertising).
- It makes them infinitely scalable. Meaning they can scale to huge sizes and add little to no cost to the company. Their cost per unit decreases dramatically as they grow.
- It allows them to be incredibly flexible and resilient. Think of Walmart and their now infamous scale with pick up grocery business. Walmart e-commerce business is up 97% YoY. This would not even be possible without the underlying technology already in place. There are very few companies in the world which could handle a 97% increase YoY and have any reasonable chance of still functioning.
- It makes the customer experience far better because the technology allows you to customize the experience to the person. You don't need to "group" people but rather, through the technology, you can customize the experience. Someone wants to come into the store, you have a solution for that. Someone wants curbside pickup, you have a solution for that. Someone wants it brought to their home, you have a solution for that. Someone wants the products delivered to the trunk of their car (specific models allow Amazon to open the trunk of your car and put product in it), you have a solution for that.
- Because the technology is cloud based and built on the cloud it allows for the ability to grow dramatically very quickly. Think about this: In December of 2019, Zoom hosted 10 million daily meeting calls. By April, they were up to 300 million per day.
- Technology allows companies to become dominant in their industry.
- Technology allows scale
- Technology allows companies to be resilient in the face of adversity; It actually allows those companies to thrive.