The art of winning at supply chain technology: Lessons from managing tech for the largest private trucking fleet in the U.S.

Traditionally, supply chain organizations have leveraged third-party software solutions to manage key processes across procurement, warehousing, fulfillment, and transportation.  Given the plethora of legacy and venture-backed technology companies serving supply chain in today’s marketplace, supply chain executives are faced with tough build versus buy decisions as well as choosing the right mix of technology partners when they decide to buy. While one size doesn’t fit all, executives need to consciously define their areas of focus and strengths they would like their function to develop while considering constraints such as uniqueness of their supply chain, technology budget, and in-house talent.

According to McKinsey, less than one-third of organizations saw expected value improvements from digital transformation initiatives. While companies such as Walmart, FedEx and Maersk are embracing the technology opportunity and investing heavily to become digital-first organizations, the broader supply chain industry still has room for improvement in terms of building high-performing technology teams to serve their dynamic business needs.

Spotting the lucrative overall market size and new market categories, venture capital investment into supply chain tech startups saw unprecedented inflows of $62 billion in 2021, mostly fueled by pandemic-era unmet needs. While the funding has returned to a steadier state ($7.9 billion in the first three quarters of 2023), it’s a great time to be building and buying supply chain technology. Supply chain leaders have an opportunity to develop a customized technology strategy that accounts for their constraints including budget, talent and negotiating power, while maximizing their ability to leverage technology to improve top-line and bottom-line results.

In this article, we explore six critical strategies that are essential considerations for supply chain operations and technology executives embarking on a technology modernization, digital transformation or innovation initiative.

1. Impact of a good technical & product leadership team
2. Product-led culture
3. The build vs. buy framework
4. Choosing the right vendors
5. Creating a win-win ecosystem with your technology suppliers
6. Encourage innovation and incentivize core technology development

Impact of a good technical & product leadership team

Hiring and retaining top-tier product and engineering leadership should be at the forefront of supply chain technology strategy. An increasing number of traditional logistics companies are hiring veteran leaders from traditional big tech companies such as Amazon, and Google. Executives who have witnessed platform development and exponential growth at big tech companies offer helpful perspectives into building reliable and scalable technology platforms that can grow with your business. An accomplished technology executive is well connected, can attract top tech talent from their network, instill a customer-focused and product-led culture, create career pathways that reward high performers, and create a high-performance culture. An experienced, highly technical leadership can create immense value in the supply chain function via robust transactional, data and AI infrastructure that will power all individual applications.

Product-led culture

Today’s best consumer technology brands such as Apple, Meta, Google, Airbnb and Amazon have one thing in common—visionary founder(s) and a strong leadership team that obsess over shipping high-quality products that delight customers. While today’s enterprise software products are far from delightful, employees are increasingly expecting high-quality software to perform day-to-day jobs, be it at a warehouse or in their truck. Highly functional and usable supply chain software can play a critical role in employee satisfaction, efficiency and retention. Taking a product-led approach means building a product that enables operators to seamlessly accomplish their tasks every day without the frustrations of using Excel spreadsheets or switching between multiple, legacy desktop apps. Internalizing product-led culture starts with users first. Explore user needs, identify core use cases, and build products that seamlessly integrate with operational workflows.

The build vs. buy framework

Supply chain organizations have traditionally been highly dependent on technology vendors. Today, Fortune 500 retailers, transportation and warehousing providers, and other companies with global supply chains are increasingly investing in building in-house technology teams. In-house tech teams enable companies to develop and deploy at a quicker pace. In-house technology development might also be a significantly cheaper option in the long run, when accounting for maintenance, professional services, annual licensing, contracting, upgrading and other non-trivial costs charged by traditional technology vendors. It’s important to identify technology use cases that serve your core business processes and prioritize in-house teams to build them. Building and managing low-tech use cases will likely not motivate your tech teams, as much as building out an AI-enabled routing or pricing platform.

A build culture attracts high-quality talent and improves brand equity for your company amongst the tech community. However, the buy approach has its time and place; Commoditized products (customer support, ticket management etc.) are not worth spending your limited internal resources on. Regulatory, compliance and safety products such as AI dashcams & ELD logging products are better left to highly specialized vendors with expertise, resourcing and commitment to evolve the product to your dynamic business.

Choosing the right vendors

In today’s competitive technology landscape, buyers have a plethora of vendors to choose from for any use case. Traditionally, supply chain technology has been dominated by one or two major vendors. Over the last decade, Silicon Valley-funded startups have been disrupting several legacy vendors with better technology, stronger product and engineering talent, usability, support, and pricing. Great vendor selection begins with identifying your desired business outcomes, core use cases, pain points and company-specific constraints. Then, it’s critical to cast a wide net and engage at least three to five vendors to understand their current state of product, future roadmap, strength of engineering talent, and boldness of vision. Upon gaining a broader perspective of each vendor, invite a select few vendors to participate in a well-defined, time-bound pilot. On the pilot evaluation committee, ensure the right representation from different key stakeholder groups across operations, safety and compliance, product, engineering and legal. Tapping into internal expertise to understand the needs of all involved stakeholders is often overlooked and leads to expensive delays much later in the implementation lifecycle. In addition to reviewing pilot results, consider key strengths of each vendor, their contract terms, pricing, and whether they can scale up and down with your business demands.

Creating a win-win ecosystem with your technology suppliers

Investing in critical systems such as a warehouse management system or a fulfillment management system often means that you are committing to a 10+ year partnership with your chosen vendor. As a client, you might technically have an upper hand in the relationship, but it pays dividends to deeply understand your suppliers’ needs and offer ways to help them with their goals. By developing a strategic relationship with your supplier, you can influence their product strategy, help them land new business via positive reviews, and have them continuously invest into solving net new problems. When suppliers are not happy in a relationship, it often reflects in poor customer success, lack of responsiveness, and resistance to building new features, which will hinder your ability to maximize the platform to your benefit. Establish a cadence of frequent touchpoints between executive leadership of both companies to discuss mutual goals, platform enhancements & contract renewals. Provide timely feedback on highlights and lowlights. Empower your functional managers to own the relationship, hold the vendor accountable to the promised value, scope and timelines.  

Encourage innovation and incentivize core technology development

Executives should empower their teams toward building an agile, customer-focused, iterative culture centered around developing expertise in best-in-class discovery, product management, engineering practices. Bring in external experts who can share their experiences with core functions such as rapid development and deployment. Allocate annual budget for individual learning and development. Encourage innovation sprints and hackathons to allow teams to take time out of routine development and work on unsolved ideas. Create a clear intake and prioritization process that will help stakeholders submit ideas and requests for platform creation and enhancements. Communicate product strategy, roadmaps, quarterly plans, and delivery readouts with clarity across cross-functional teams.  

About the author

Vijay Cherukuru is head of product at Walmart GoLocal, a last-mile delivery-as-a-service platform. He previously managed technology for Walmart Trucking, the largest private fleet in the U.S. At Walmart, he led driver pay, tractor & trailer telematics, safety, and dispatch optimization products for Walmart Private Fleet’s 15,000 drivers and 100,000-plus assets. Cherukuru also pioneered the concept of Connected Asset Platform for Walmart’s fleet of tractors, trailers, and physical assets to improve digital visibility of physical assets in collaboration with leading ELD, trailer and sensor companies. 

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