Red Sofa Interview: Skotti Fietsam on calculating ROI of digitalisation

Skotti Fietsam, senior vice-president, Supply Chain, Accuride took to the Red Sofa in Nashville with Riad Mannan, content producer, Automotive Logistics to talk about the return on investment (ROI) of digital technologies.

Fietsem, who is responsible for all incoming and outgoing product shipped out of 14 manufacturing sites and three distribution centres, said that valuating ROI means operations can be done in the most effective, safest and cheapest way.

She said measuring ROI varies depending on the project, but that it’s important to define what problem you’re trying to solve with a digital tool.

“In the case of our most recent project of digitalisation, we are trying to solve the problem of having visibility to our product on sea containers, so making sure that we understand what that costs the company when a customer calls us and their product isn’t ready, does that cost us money in terms of charging us a late delivery fee, or does it cost us long-term market share loss,” she said. “There are hard savings, for example we replace one person with a computer, or there are soft savings as I mentioned with customer relationships and earning trust with your supply base.”

Speaking about the recent Baltimore bridge collapse, she said: “We had just finished our digitalisation project on visibility and right away, I think within a month, I got a phone call from the CEO and CFO and they’re saying ‘the Baltimore bridge collapsed, do we have any product there, are there any concerns over our customer shipments?’ and I called our director and said, ‘let’s look inside of our system and see what that tells us’ and he says ‘I’ve already done that, there were two containers that were headed to the east coast but we’ve diverted them to another port so we’re all set, we’re good’.

“Within two minutes we knew that, whereas that would have been an exercise that would have had seven people, 24 hours a day trying to find where these containers are. It’s almost like you don’t have to measure that because it speaks for itself. There is a savings to that, in the ability to gain your customers’ trust, when you can tell them quickly there is no risk.”