Could gamification be the key to managing logistics risk?

Anyone with kids over the age of 5 knows that gaming is a massive industry. The global games market is expected to hit around $180 billion by 2021 and mobile games you play on your phone and tablet are going to make up more than half of that. From an entertainment point of view, gaming is big business, but it’s also a valuable tool for big business.

Gamification is the application of game-principles and game-design elements in anything that is not a game, and it’s a growing trend. We are starting to move beyond the logistics games that kids play such as ‘Railroad Tycoon’ and ‘Factorio’ to those same sorts of gaming ideas actually being used to improve real-life logistics and transport functions.

It makes sense when you think about it. Games, by their very nature, are engaging, rewarding, encouraging, collaborative and competitive all at the same time. They are all about solving problems and finding the optimal way to achieve something – exactly what we want an employee to do in the workplace.

It’s an idea that goes all the way back to the 1960s when MIT developed the ‘beer game’ as a way of quickly teaching students the bullwhip effect in supply chain management. For those of you not familiar with the name, it describes the concept of small variations in demand at the retail level can cause ever-increasing fluctuations in demand at the wholesale, distributor, manufacturer and raw material supplier levels. It’s named after the physics involved in cracking a whip where the small movement of the wrist of the person holding the whip causes the whip’s wave patterns to get bigger and bigger. From those humble beginnings, the advent of the internet and computer-based gaming has seen the field of gamification become increasingly sophisticated.

Here is what they all tend to have in common.

First up, the idea is to provide motivation to do specific things that then have a positive impact on performance. So, there is usually the introduction of a competitive element to completing tasks to make the mundane a little bit more interesting. That changes performance monitoring from the boss looking over your shoulder to a task that involves and engages the employees in some sort of friendly rivalry. Then you add in levels, statuses, rewards, titles, badges or prizes so that everyone feels a sense of achievement once the goal is reached. Combine all of that with mobile devices, hyped up graphics, and the ability to check your progress online and you have potentially changed the world’s most boring job into something that resembles Fortnite! Perhaps a slightly graphic example, but you get the point.

In logistics and transport these sorts of games are being used in everything from picking and packing, to shift management and to safe and fuel-efficient driving.

But there are dangers.

There are thousands of video games released every year and most of them go nowhere. Get your gamification design wrong and the employee will hate it or be bored by it just like any other game. Make the mistake of encouraging them to do the wrong thing through your game such as working faster rather than better or sabotaging other workers that they see as competitors and your entire business could go off the rails in spectacular fashion. There is also a fine line between gamification and manipulation. The latest big companies grappling with this perception are Facebook and Instagram. Hint: if you don’t think ‘likes’ are an example of gamification then you haven’t been paying attention.

Still, gamification is here to stay. As long as you avoid the pitfalls by choosing appropriate content and appropriate rewards there are real performance improvements to be had and a lot of fun to be had as well.

KPMG national sector leader, transport & logistics, Brendan Richards can be found tweeting all things logistics here.