There are more than 2 million active businesses in Australia, and in recent years the Transport, Postal and Warehousing industry have experienced the biggest and fastest growth. This means an intense competition from both existing players and new entrants in the field.
To stay competitive and profitable, the logistics and warehouse businesses seem to have already exhausted every option. They have already applied lean and agile operations, even included data science and artificial intelligence in their arsenal. They have also aimed for a zero-accident workplace that has drastically improved employee productivity and morale. However, the industry continues to evolve non-stop and what the businesses have now may still not be enough to survive and thrive.
What nature offers
Thankfully, we can still derive insights from nature. Natural ecosystems can provide us with a wealth of insights when it comes to effectiveness and efficiency. The good thing here is we don’t need to reinvent the wheel. Just find out what works and apply it to our business and the entire industry.
For example, ants are an amazing example of efficiency and coordination. They get things done and ensure the colony has enough food, regardless of weather and seasons. One way they accomplish this is by decentralising the search and transport of food. It’s more complicated and far from being linear and straightforward, however, this is how nature works. The complexity is required for optimisation, given the constraints and very limited food supply and intense competition among different flora and fauna.
It seems that ants and other social insects have centralised management because of the hierarchy (with a queen, reproductive male ants and sterile female workers that forage for food). It seems there’s a command control centre where efforts and communication are centralised. Upon closer look though, ants actually practise a decentralised and distributed form of management and supply chain. This decentralised system allows for more flexibility and further optimisation. That’s because ‘swarm intelligence’ is about having distribution-based logistics rather than centralised. In other words, it’s about having the ability to deploy materials and supplies from more favourable locations to destination sites. This is especially crucial in the medical and military fields, where supplies are expected to arrive on time and supplies should be coming from locations as near as possible.
That should sound familiar since we’re already applying this approach one way or another in our businesses. For instance, you might already have extension offices in strategic locations to better reach and communicate with clients, as well as establish your presence in the area. Multinational corporations have offices all around the globe, but corporate headquarters in one location (often their place of origin).
In the logistics industry, the decentralised approach can result in significant cost savings as well as faster deliveries. However, this is a lot more complex and may require new techniques and technologies (including real-time monitoring and forecasting) to better match supply with demand and stay profitable in your operations.
It’s getting more competitive out there as new players enter the field and established players are acquiring new businesses and consolidating their operations.
How do we deal with that competition? The instinct in business is to outperform them all by providing superior services and lower prices. However, there’s a ceiling to that because we can’t please everybody while trying to stay profitable.
Nature’s response, on the other hand, is sidestepping competition so that everybody gets a slice of the pie. After all, there’s this Competitive Exclusion Principle where two competitors that use the same limiting resource cannot coexist. One has to give way by death, migration or extinction. Another way is by moving on to something else (using another resource to avoid competition).
We can also apply it to the logistics industry and most other businesses in general. Instead of competing head-on, we can avoid the competition altogether by specialising in certain tasks and industries. For example, there are logistics companies that specialise in servicing the retail sector. Others focus on manufacturing (whether delivering raw materials or finished goods). There are also others that cater to a wide variety of clients but later on focus on the specialised.
Specialisation is a practical and economic strategy because the requirements and standards in various industries are getting more stringent and complex. It’s especially the case with goods that are sensitive to impact, vibration and temperature fluctuations. Delivering these products often require specialisation because of the long list of requirements that change from time to time.
Specialisation is also about focusing and becoming the best. It can do wonders in drastically improving the operations, as well as cutting down costs. It’s similar to the manufacture of the Model T automobile, as said by Henry Ford: “Any customer can have a car painted any colour that he wants so long as it is black.” This standardisation and specialisation allowed the Ford Motor Company to produce automobiles at scale and at costs affordable to the rising middle class back then.
It’s how nature works. Although there are predators and head-to-head competitions, sidestepping competition is nature’s strategy in promoting biodiversity. This way, various resources are being consumed. The evolutionary pressure also forces organisms to find other ways to survive and thrive.
Specialisation and decentralisation are lessons we can learn from nature. Most likely you’re already applying those principles in your business. But to get the most benefit and stay profitable in this competitive industry, it’s important to look at what works already. Nature indeed has provided us with answers we can already use in our everyday living and business affairs.
It’s all dynamic and evolving, just like in nature. Even if we religiously applied the lessons and stayed committed to speed and efficiency, the landscape will still continuously evolve. The changes will force us to adapt if we want to survive and thrive. Luckily those changes also bring new opportunities. It’s just up to us to figure out how to take advantage of them and adapt to the changing circumstances – the way organisms and ecosystems do.