In a recent discussion with James Moffatt, Partner at Baringa Partners, we explored why many supply chains remain stuck with fragile data foundations, how outsourcing economics slow down automation and why bounded rationality in the boardroom makes long-term transformation harder than ever. James also shared his vision for what logistics could look like by 2035 and why the journey there needs to be thought of as a step-by-step maturity path.
Data foundations that still don’t work
JP Doggett: Supply chain leaders often tell me data is their biggest barrier. Do you see the same?
James Moffatt: Absolutely. Despite years of spending, data remains the Achilles’ heel. I still see ERP extracts being dumped into Excel, with quality that’s just not good enough. No company I’ve worked with has really cracked it. People assume because they’ve invested in a data lake or warehouse that the problem’s solved. But when you look closer, the quality is patchy, the ownership is unclear and the processes still rely on manual workarounds.
Until data is treated as a capability in its own right - with governance, stewardship and accountability - innovation will keep being built on sand. And that matters even more when we start talking about AI or modular systems. If the underlying data is weak, nothing built on top will deliver.
The economics of outsourcing
JP Doggett: You’ve also spoken about how outsourcing changes the dynamics of innovation. Can you explain?
Moffatt: Logistics outsourcing creates a structural problem. The brands hold the money but the 3PLs hold the expertise. That makes it very difficult to align investment. A manufacturer might want automation, but the capital case sits with them, while the operational benefits sit with the 3PL. Neither side wants to take the full risk.
The result is underinvestment. You see warehouses where the business case for automation has been obvious for years but never quite gets funded. That’s not because the technology isn’t ready. It’s because the economics and incentives are misaligned. Until that changes, many supply chains will stay stuck with manual processes that are long past their sell-by date.
Short-termism and bounded rationality
JP Doggett: What about the role of leadership incentives in all this?
Moffatt: It’s a huge factor. CEOs are often in post for only a few years. Their incentives are tied to short-term performance, not to long-term transformation. That makes it very hard to justify big capital projects, especially around things like decarbonisation. Everyone recognises the need, but it’s easy to push it into the “next five years.”
That’s what I mean by bounded rationality. Leaders are not irrational. They are making decisions that are perfectly rational within the constraints of tenure, incentives and market pressure. The problem is that those decisions, multiplied across an industry, stop the kind of long-term innovation supply chains really need.
Why Amazon and Ocado are different
JP Doggett: People often point to Amazon or Ocado as proof that automation can transform logistics. Do you agree?
Moffatt: Amazon and Ocado are important case studies, but they’re outliers. Their automation programmes are effectively subsidised. Amazon can offset investment through AWS. Ocado has leveraged a retail platform and licensing model. That’s not a playbook most companies can follow.
So when other businesses try to emulate them, they hit a wall. The economics simply don’t stack up in the same way. That’s why you can’t just copy Amazon and expect the same results. You need to find a model that fits your economics, your risk appetite and your maturity.
A vision for 2035
JP Doggett: If we look further ahead, what do you think logistics could look like by 2035?
Moffatt: By 2035 I think we’ll see logistics that is autonomous, digitised and decarbonised. That’s the direction of travel. But we need to be clear-eyed about the journey. You can’t jump from today’s manual processes straight into that future in one leap.
It has to be thought of as a maturity path. Crawl, walk, run. Start with the basics - good data, clear processes, aligned incentives. Then build automation and modularity step by step. The risk comes when companies either delay until there’s a burning platform or throw everything at a giant programme that doesn’t deliver. The future is about iterative progress.
Closing thoughts
For James Moffatt, the lesson is that supply chains don’t fail at innovation because the technology isn’t ready. They fail because the data is fragile, the economics of outsourcing are misaligned and leadership incentives push decisions into the short term.
The challenge is to overcome those constraints and build maturity step by step. As James put it: “You can’t jump to 2035 in one leap. You get there by building the foundations, then adding layers of capability that stick.”
.svg "SCL-X Logo")
