A really good friend of mine once told me I was going to read a particular book. It was a manufacturing book, and I'm in software, so my first reaction was to ask what I needed a manufacturing book for. I didn't argue with him. He is one of the most intelligent people I know, and when he tells me to do something, I do it.
The book is The Goal, and it has fundamentally changed how I feel about almost everything we do as a company. It came up during a recent Trax LinkedIn Live on AI adoption in supply chain, when I was asked what will distinguish companies that use AI to operate differently from those that simply use it to do things faster.
Speed and Operating Differently Go Together
I don't think those two are mutually exclusive. Speed matters. AI has enabled us to develop product much faster. Building software and getting it to market now happens much faster than it used to.
That's where the book comes in, because the whole thing is about bottlenecks. Our bottleneck used to be figuring out how to get something done. That bottleneck has shifted to the right. In a manufacturing process, that's exactly what you're trying to do. You're continually trying to move the bottleneck over and over.
Why Adoption Is Now the Bottleneck
We've moved it to the point where adoption is now the bottleneck. You could build a gazillion things, and you still have to get customers to use them and get value out of them. That still takes time.
In many previous lives, I've had meetings where I literally put gold on the table. The response was "Oh, that's really nice," and then everyone went back to doing whatever they were doing before.
The constraint has moved from creating something to getting it adopted.
Buyers Will Have to Be More Discerning
Faster building has another consequence. I got a text from a friend who used to run pre-sales engineering at another company. She asked whether I was seeing the volume of what she calls fraud in the market: companies creating demos, showing them and trying to sell something with nothing there.
That’s really happening, and it means buyers are going to have to be far more discerning.
Software Companies Aren't Dead
I'll be upfront that I have a vested interest here. I wholly disagree with the idea that all software companies are dead because of AI. I'm watching our own company and the companies other CEOs I know are running. They're growing, and their profitability is growing. There is still a world for the software company if you are very intelligent about how you use this very disruptive technology.
Get Comfortable Using It Yourself
When I was asked which process executives most need to rethink because of AI, my answer was their own use of LLMs. If you're not one of the top users in your company for analyzing data, thinking through how problems happen and trying to be more creative in your understanding of them, you are way behind. I don't care whether you carry a director, VP or C title.
You have to get comfortable with it. The more you use LLMs, the more you realize how many gaps there are in artificial intelligence. They're still hugely useful. I analyze massive company data sets to understand how to improve performance in the organization and how to better discuss things with my clients. I do the same thing when I'm doing advisory work for the boards and private equity firms I work with.
The Companies That Will Win
The companies that really understand how bottlenecks move, use AI to clear them and really consider what adoption means are going to be the winners. I think they're going to be the ones that are really dominant.
Read the Book That Changed My Thinking
If you haven't read The Goal, read it or listen to it in your car. It's a fascinating book, it opens up a lot of ideas about how to run your organization and it's still relevant today.
Watch the full conversation on the Trax YouTube channel, find more insights from Blake on the Trax blog or read why treating AI as incremental is a losing strategy. If you want to talk about getting more value from your transportation data, connect with the Trax team.