The Hinge Factor in Supply Chains: A History Lesson

An important component of digital dexterity is known as a “hinge factor:” the mental agility to respond to and know what to do with data as it flows into one’s consciousness. As we discussed previously, even as systems evolve to create alerts, identify events, and perhaps even predict them, individuals still must know how to act based on the information presented. Global military history is rife with examples demonstrating that a leader’s ability to act on intelligence determines whether battles are won or lost.

For example, as noted in the book “The Hinge Factor:  How Chance and Stupidity Have Changed History“, the author notes that the battle of Gettysburg was lost despite Confederate General James Longstreet’s knowledge of the physical landscape, as he planned to create an envelope around the backside of the opposing force. Longstreet delayed his offensive on the battle’s second day in order to coordinate his forces, a move that his detractors would later argue allowed Union General George Meade to prepare for the attack. It swung Gettysburg with a single movement and allowed the Union to win. In the same way, the ability to understand patterns that impact forecasts can determine winners and losers for a post-Thanksgiving Black Friday sale.  But if you have the information and don’t use it – it simply isn’t useful.

History also gives other examples of how progress can be halted when there is a singular lack of intelligence. In A World Lit Only by Fire,^[1] William Manchester writes about the pit the world entered during the Middle Ages when religious dogma shut down progressive thinking. Manchester recounts how detailed observation and data gathering led to revolutionary insights into the physical world by Michelangelo and Galileo. Michelangelo performed autopsies to better understand human muscular and skeletal structure, which led to his life-like sculptures and paintings. Galileo observed the movements of the sun, stars, and moon to deduce that the Earth was indeed not the center of the universe, as had been thought. These visionaries turned around an entire age of ignorance, at a time when even basic territorial maps didn’t exist. People who left their villages generally never returned, as no maps to help them find their way back. Visitors to small villages were generally viewed with distrust, and people seldom went outside their rural circles to find out what was going on in the world. Shifts in kingdoms, leadership, the church, and other issues were generally unknown, as no news travelled beyond the cities.

Amazingly, a similar thing is happening today: employees of an organization defined by silos are destined to remain ignorant of the conditions impacting other functional areas, customers, suppliers, technologies, and other developments. There’s a solution: digital toolboxes, which allow employees to be able to visualize the full scope of information. These technologies create a light beyond the immediate fire, enabling a digital dexterity critical to organizational success.

Much media attention has been paid to “human in the loop” thinking. But where should humans be placed in the supply chain decision-making loop? For instance, if bots are being used to order pens on a weekly basis, and ordering and supply systems are automated and talking to one another, and can self-adjust to differences in lead time and availability, human intervention doesn’t seem necessary. But if a relationship issue arises, such as a supplier complaining that the system isn’t paying them on time, humans must be part of the discussion that ensues! The need for human judgement is important, as this relates to the initial conditions which systems are required to establish themselves in. Leaders must consider not only what can be automated safely and securely, but also where humans come in to adjust systems if they spiral out of control, and re-set the initial parameters.  And paying attention to sharing information between humans in different parts of the organization and the supply chain is also important – or you can wind up walking through the countryside without a map…

^[1]Manchester, W. A World Lit Only by Fire: The Medieval Mind and the Renaissance: Portrait of an Age. New York: Little, Brown and Company, 1992.