Manufacturing and logistics organizations have been slower to digital transformation than say, fintech or retail companies. That all changed after Covid and the subsequent supply chain challenges, says Oleg Yanchyk, CIO of Sleek Technologies, a Chicago-based provider of freight procurement automation software.
Yanchyk spoke with StrategicCIO360 about how logistics and manufacturing spaces are evolving, the “headache” of AI and why manufacturing and logistics CIOs are the “busiest” members of the C-Suite.
How has the Covid-19 pandemic changed the role of CIOs within the manufacturing and logistics industries?
The technology world was flipped upside down during the pandemic, with industries from insurance to healthcare having to hit fast-forward on digital transformation efforts they had mapped out for years in the future. This means that CIOs were among the busiest members of the C-Suite during the crisis—and still are. This is particularly true when it comes to CIOs in the manufacturing and logistics worlds.
Manufacturing and logistics have a reputation as two of the slowest moving sectors in the business technology ecosystem. For example, while business verticals like financial services and retail have been pouring money into emerging technologies like AI, the manufacturing and logistics industries have by and large decided to stand pat.
Therefore, while many sectors had significant growing pains in terms of adopting technology during the pandemic, many manufacturing and logistics companies had to build modern technology infrastructures almost completely from scratch—much of which fell squarely on the shoulders of CIOs.
From building cloud computing infrastructure to recruiting AI-savvy talent, the scope of what CIOs in manufacturing and logistics were tasked with dramatically increased as a result of the pandemic. In addition, many of the shortcomings highlighted by the pandemic existed long before the onset of the crisis, so CIOs still have a huge amount of work cut out for them in undoing and rebuilding their technology operations.
What was the role of the CIO like before the pandemic?
Prior to the outbreak of the pandemic, CIOs in manufacturing and logistics were often primarily tasked with many of the “traditional” aspects of IT. This includes items such as providing ongoing IT maintenance, addressing occasional procurement needs and handling of incremental improvements to existing processes.
This “nuts and bolts” job description wasn’t because CIOs were unambitious, but rather was a symptom of the deliberate and conservative approach that manufacturing and logistics businesses tend to take when it comes to technology adoption.
This of course changed dramatically as a result of the pandemic and the subsequent supply chain snarl ups that have gripped the industry for the last two and a half years. Now, CIOs in these spaces are being increasingly tasked with more progressive job descriptions that include furthering digital transformation efforts and boosting IT agility and resilience.
What role is AI playing in shifting the job roles for these professionals?
The pandemic-driven digital transformation efforts heaped a huge amount of to-dos on to the plates of CIOs. However, perhaps nothing has caused more headaches for CIOs and their IT teams than AI adoption.
AI is undoubtedly one of the most disruptive technologies of our time. Yet, for all its power and potential, AI requires a massive amount of time and energy in order to get it right. And given how behind the times many technology infrastructures were at manufacturing and logistics companies before the pandemic, CIOs often had to build their AI operations from square one. This includes tasks like ideating different AI-driven use cases, building AI/MLops, strategizing on how to drive enterprise-wide scalability and more.
What is next for CIOs as the supply chain crisis, war between Russia and Ukraine and other factors continue to impact the manufacturing and logistics sectors?
In many ways, CIOs in manufacturing and logistics are facing many of the same long-term hurdles that all CIOs are facing. However, there are a few particular areas that CIOs in these verticals will likely continue to grapple with for years to come.
For example, despite being faced with sourcing and supply chain challenges for over two years, many companies are still struggling to find ways to build the resilient supply chains that they need. And to solve this, companies are continuing to rely heavily on their technology teams to help them find a way through. Therefore, manufacturing and logistics CIOs, in particular, are going to face a very heavy—and evolving—workload for the foreseeable future.
On the flipside, given the dire need within these industries for technology innovation, these CIOs also stand to play a far more significant role in reshaping their industry than their peers in other spaces do.