Complacency is always a trap. We tend to need pain to make a change. That's just human nature. And the hardest time to invest is when things are going well, because you think you don't need to. But the fact is, that's the best time to invest.
I say this because I see it play out consistently. When the market is stable, companies take their foot off the gas. They delay modernization. They push back on spending. And then when volatility hits, they're scrambling. The ones who invested during the calm are the ones who navigate through the murky waters in a much better way than the ones who didn't.
Being complacent when things are stable is the absolute wrong move, as catching up during a crisis can be devastating.
What "Investing" Actually Means Right Now
When I say invest, I'm not throwing out a vague concept. I am talking about investing in digital modernization. Investing in the data asset, automating manual processes, and properly integrating workflows and information into the operational management layer of a company. Specifically, how that data asset can be used in the operational aspects of a business to perform at the maximum level and be able to respond to events that are unplanned and unexpected.
I want to be clear, I'm not simply referring to applying an AI model to a problem. There's a lot of marketing hype right now around AI, and I think it's getting more challenging to understand what the proper use cases are for AI models and what data requirements must be in place to make them effective. While I have no doubt AI will continue to evolve to handle more complex tasks, for the foreseeable future, leave AI to automate repeatable, low-level tasks and the hard questions for human subject matter experts. The fact is, in both cases, you need to have the underlying data asset as a foundation to teach AI models or provide information, not raw data, to an educated human-in-the-loop decision maker.
I think a practical use of AI is a better approach than trying to promote some sort of non-realistic vision of it. AI is not there yet to simply take a human out of the equation. It's certainly not good enough yet to answer all the questions, especially the hard ones. But it can assist in the optimization of repeatable tasks. Lowering cost, having the data asset available when you need it. That's what's crucial to navigating a disruptive market.
The Short Term Pain and Long Term Gain Problem
Recently, while discussing market conditions with a colleague, I found a relevant phrase often used in the world of sports: short-term pain and long-term gain. And I think it captures something important about why companies struggle with making the right investments at the right time.
We tend to be an impatient society in general. We expect things very quickly. We get frustrated when things don't happen the next day. Transit times are being squeezed because consumers expect more, faster. We've almost been spoiled to the point where if something isn't coming the next day, we think there's something wrong. And that impatience permeates through the entire supply chain.
The reality is that some of the fundamental changes that need to take place may take some time. That's just the way it is, and that's how it works. We find ourselves in a global market where trade has been influenced by tariffs to incentivize more US manufacturing. While that may play out well in the long run (short transit times, lower transportation costs, but higher product costs), in the short run, we are enduring the pain of tariffs on the overall cost of goods. Similarly, investing in the data asset to support a long-term data and digital modernization strategy may require more than desired investments in data infrastructure and data science resources.
Consumers Are Raising the Bar on Visibility
There's another angle to this that ties directly back to technology investment. Consumers today want more transparency. If your package isn't here, they want to know where it is and why it isn't here. That expectation isn't going away.
And that's really a tech enablement strategy. If you invested in the technology, and possibly AI on top of it, asking a simple question like "where's my stuff" should be easy to answer. But if you haven't made those investments during the stable periods, you're going to be playing catch-up when the pressure hits, and customers start asking harder questions.
What the Disruptive Events of Recent Years Should Have Taught Us
If we learned anything from COVID, the freight recession, and tariff impacts, it is that things can often go “off the rails,” and we are immediately thrown into a more chaotic state. To ensure your supply chain is resilient, you need to be agile and have relevant and accurate information to navigate changing conditions.
The key is learning from them. Learning how to plan inventory and understanding the cost impacts to overstock under certain conditions, balancing that with transit time, mode of transport, and even different sourcing options. An accurate forecast, accurate modeling of network changes, and service changes all require digital data for both historical shipping activity and digital contract rates. Disruptive events will continue to occur, and more mature, agile supply chains will always outperform the laggards that are still waiting to invest.
The companies that made it through those periods were the ones who had already invested in their data, their technology, and their ability to respond. They didn't start building those capabilities in the middle of the crisis. They had them ready.
The Time to Build Is When You Think You Don't Need To
Things are going well, the numbers look good, so why spend money on something that doesn't seem broken? But that's exactly the trap. The time to invest in digital modernization, in your data foundation, in the practical application of technology, is when you have the stability to do it right.
Those who have invested expecting market volatility are going to outperform those who failed to act and were complacent to prepare for the road ahead.
Steve Beda is EVP of Customer Solutions & Advisory at Trax. With extensive experience in supply chain automation and transportation logistics, Steve works closely with customers across industries to help them take full advantage of Trax's Total TSM/TSI Spend Intelligence services.
Want to future-proof your supply chain before the next disruption? Contact Trax to learn how we can help, or connect with Steve directly on LinkedIn.