Global logistics technologies aim to create better supply chain management
Industry events may seem to have become a form of collective memento mori for logistics professionals these days, as logistics conferences often contain at least one industry guru or IT wizard presenting the audience with a prediction that they will be swept aside by “disruptors”—those new technology outfits like Amazon or Uber that will surely flatten the logistics landscape like huge, engulfing tidal waves.
Speaking at last September’s Intermodal EXPO hosted by the Intermodal Association of North America, two speakers declared that the time was ripe to move into the “uberization” of logistics. Cargomatic co-founder and President Brett Parker and Ken Ehrman, president and CEO of Asset Intelligence, have vested interests, however. Cargomatic matches truckload and less-than-truckload shipments with available truck capacity in Los Angeles and New York, a model not dissimilar to Uber, and Asset Intelligence offers tracking for a range of logistics assets. Still, they are hardly alone.
Last December, Logistics Management ran a virtual conference about the “new digital supply network, a place where optimized software, mobile technology, wireless networks, sensors, connected machines and Big Data converge to offer logistics and supply chain professionals the decision-making capabilities necessary to not only differentiate their organizations but also thrive.”
Also in December, logistics technology provider GT Nexus weighed in with a white paper that outlined a sea change in supply chains, away from lean set-ups toward “active” supply chains. Abandoning some optimization through rigorous planning for greater flexibility, these demand-driven supply chains respond to disruptions and changes in demand. Again, improved technology and data management capabilities are key to this.
The implicit message in all these scenarios is that logistics providers need to embrace disruptive technology to stay in the game, lest they be swept aside by technology altogether. A white paper published last October by Transport Intelligence in association with technology provider Kewill urged small and mid-sized forwarders to tap into new technology, notably cloud computing, if they want to remain competitive.
“In the future, highly functional systems operating as a single application—covering every aspect of operations from pricing, order management, shipping, warehousing and transportation management—will emerge. These will be available as subscription services in the public ‘Cloud,’ accessible via a variety of computing platforms,” the authors proclaimed.
Albert Saphir, president of logistics consulting firm ABS Consulting, believes the specter of Uber pushing logistics firms out of the picture is overblown. “All they do is assign a driver and a vehicle. This has nothing to do with functions like forwarding, compliance or customs clearance,” he comments, adding that the concept of matching loads and trucks is not new and that load-posting boards have been around for some time.
Likewise, shippers have always had a desire to include an element of flexibility in their supply chain to respond to changes, Saphir says. Shippers of large volumes want to automate this process, but for small and medium-sized enterprises (SMEs), this happens largely in a manual environment. The clientele of GT Nexus is made up of a small number of large companies with large volumes, where automating such functions can generate significant savings, Saphir says.
The desire to make changes does require better supply chain visibility, preferably end-to-end and in real time. Gene Gander, vice president, Business Development-Americas, at logistics technology provider WiseTech Global, notes that tracking has become much more detailed, with visibility at a more granular level than before.
Uwe Glaser, CEO of forwarder Cargomind, expects full visibility to become part of the regular arsenal of services that logistics firms offer their clients. “I think end-to-end visibility will become standard,” he says.
Without this, forwarders will be at a serious disadvantage vis-a-vis the integrated express carriers, he remarks, adding that better visibility will result in improved quality levels.
“FedEx and UPS have set the bar with their proprietary systems,” says Saphir. “It is amazing as long as a shipment stays within their system, but the minute it is handed off to another carrier, the visibility in real time drops dramatically.”
Gander advises shippers to look at the data flow of their supply chain providers. “See how seamlessly information is aggregated and distributed. If the granular information flow is done seamlessly, it’s good. If there are too many different platforms and solutions they try to daisy-chain together, it’s less likely to work well,” he says.
He has seen rising interest in dashboards to monitor supply chain performance and identify problems. As a rule, these tend to get quite customized, depending on what the individual client is looking for. Their value is in exception management, in pinpointing outliers and producing scorecards to help tackle problems and fine-tune solutions, he stresses.
Saphir sees dashboards more in play with larger shippers. For the most part, his clients look for more specific functionality, which is usually determined by their role in the organization rather than an overall logistics picture.
Carriers have been furiously introducing apps that allow functionality from clients’ mobile devices, first and foremost for track and trace. This has become well entrenched, to the point where it has become a must for logistics providers, says Saphir. “If you don’t have an app that the customer can use,” he warns, “you are only providing limited value.”
Mobile devices are also decidedly on the advance in warehouses. Carriers and warehouse operators are increasingly equipping their warehouse staff with tablets and mobile phones to capture images of shipments and their shipping labels. This is part of a broader trend to drive paper out of the warehouse, which is going to continue, according to Saphir.
Another area where technology is increasingly called for is compliance. As requirements for cargo security mount and customs and other government agencies demand more shipment data to be submitted electronically, shippers are turning more and more to their logistics providers to take care of these aspects. For WiseTech, the U.S. Customs and Border Protection’s Automated Commercial Environment has been a major focus in recent months, as importers and brokers have been scrambling to prepare for its implementation.
Gander also notes increased demand for denied party screening to be performed at the logistics provider level. Not only Fortune 500 or Fortune 300 companies but also many SME firms have moved in this direction, he says.