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Overcoming Obstacles in 2020 to Optimize the Digital Supply Chain

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Overcoming Obstacles in 2020 to Optimize the Digital Supply Chain

The logistics and supply chain market is transforming quickly. For the stakeholders involved, managing multiple partners, high customer expectations, siloed IT systems and dynamic conditions is a challenge. I recently shared my predictions for the supply chain and logistics industry and what global and domestic businesses can do to prepare for success in the new year. But, exactly how can businesses prepare for and confront some of the biggest barriers in 2020?

Transportation capacity constraints lead to inflated prices and significant waste.

In the supply chain, the saying “time is money” is particularly meaningful. Digital freight forwarder, Zencargo, analyzed more than 100 shipments from across the UK and found that more than 100 million hours are wasted per year in procurement, supplier management and freight-administration functions, for a total annual cost of nearly $2 billion.

With the state of capacity constraints, the transportation industry is a key contributor to the waste and inflated prices in logistics and supply chain processes. In the United States alone, 15 to 25 percent of trucks on the road are empty — and for non-empty miles, trailers are 36 percent underutilized. The Environmental Defense Fund (EDF) advises that capturing just half of this underutilized capacity would cut freight truck emissions by 100 million tons per year and reduce expenditures on diesel fuel by more than $30 billion a year. According to EDF, the movement of goods currently accounts for nine percent of U.S. greenhouse gas emissions, which is nearly 500 million metric tons annually in direct emissions.

On top of that, due to the fuel emissions produced by this sector it is responsible for an additional 100 million tons of climate pollution each year. Globally, trucks are the largest source of freight emissions (57 percent), and the emissions resulting from transportation vehicles and logistics operations contribute significantly to air pollution and unhealthy air quality.

With advanced technology-driven solutions, organizations have the ability to reduce waste and capacity constraints. By leveraging artificial intelligence and GPS devices to optimize shipping routes on an international, national and local scale, companies can decrease the distance and time involved in shipping products. In addition to optimizing planned routes, advanced analytics can also be utilized to take account of congestion and update routes in real-time. Through the use of technology, companies of all sizes can reduce carbon emissions and drive sustainability across the supply chain.

Looking ahead, I believe we will continue to see a concerted effort to reduce waste in the supply chain. We need to. The potential of an orchestrated, collaborative supply chain that addresses environmental and social challenges is profound. It is the responsibility of the industry to make the movement of goods sustainable. Across industries, leading with purpose, ethics and social responsibility is a model that resonates with businesses — including employees, partners, stakeholders, as well as with customers.

In fact, today’s consumers expect companies to meet a certain set of ethical standards to gain their buy-in. Companies that don’t address sustainability issues are at risk of losing business. Eliminating the empty miles and excess CO2 emissions will become a bigger focus for smaller companies as larger organizations use sustainability initiatives and ethical standards as criteria when selecting supply chain partners. Prepare for tomorrow, today by maximizing capacity and minimizing empty miles.

Increasing customer demands and faster delivery expectations

Due to rising customer demands and unprecedented expectations for product availability and expedited delivery, companies’ transportation spend is skyrocketing — and will continue to accelerate. Thanks to a culture of instant gratification, customers want what they want, where and when they want it — and that means they want it immediately. According to findings from Dropoff, 69 percent of consumers would not purchase from a retailer again if their delivery was late. Keeping up with the high customer demand brought on by events like Cyber Monday can be challenging for companies and especially exhausting resource-wise. However, this elevated pressure offers an opportunity to optimize and reduce costs.

In 2019, holiday retail sales grew 4.1 percent over the same period in 2018 to $730.2 billion, NRF reported. Online shopping sales during the winter holiday season increased 14.6% in 2019, accounting for $167.8 billion of the total. Given the high-demand of the holiday season, companies in 2020 should look to implement technologies, such as dynamic mapping, to ensure products are delivered efficiently and on-time to their final destinations.

With dynamic mapping, retailers can gain real-time visibility into their products, receiving exception alerts and recommendations, including dynamic predictive ETA. In addition, use of solutions like dynamic mapping provides real-time analysis, based on data from inside and outside their network, delivering the most accurate dynamic visibility available.

Digital Supply Chain 2020

In this increasingly complex industry, the supply chain will never be immune to disruptions — some things are simply unpredictable. But moving forward in 2020, one thing is certain: the ability to rapidly innovate and adapt will be vital for companies in the supply chain ecosystem. To effectively manage expectations and strategize for the year ahead, businesses should take a proactive approach to addressing any obstacles in their path and face challenges head on. Prioritizing sustainability as a strategic initiative is imperative for all businesses, across industries. Companies should equip themselves with the talent, tools and resources to navigate disruptions and deliver real results in 2020 and beyond.

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Digital Supply Chain 2020: Here’s What Industry Players Should Know

The new year is here and with it comes a new set of opportunities, challenges, technologies, and trends to keep a close watch on, regardless of what industry your business caters to.

In 2019, global businesses saw an influx of unpredictable economic and political changes directly impacting the supply chain and customers. This year kicked off with IMO 2020, spurring panic for those that waited until the last minute to launch compliance efforts.

Beyond these concerns remains a variety of changes on the 2020 horizon that Pervinder Johar, CEO of Blume Global shares with us and how global and domestic businesses can prepare for success in the new year. Here’s a peek behind this year’s logistics curtain.

While shipment journeys are complex and fragmented, efforts to improve the flow of products will take precedence.

All the data in the world doesn’t matter if you can’t execute on it. We’ve been talking about the potential of the digital supply chain for more than two decades. In 2020, the balance finally shifts from future potential to current benefits. Connected devices and IoT-enabled solutions are giving us more data than ever to make better decisions — connecting the legs of the supply chain path while simplifying information exchange. To improve the flow of products and information from point A to point B, we will see more shippers adding sensors on almost everything, not just the most expensive equipment.

Maximized capacity and minimized empty miles.

We will see a more concerted effort to reduce waste in the supply chain. Eliminating the empty miles and excess CO2 emissions will become a bigger focus for smaller companies as larger organizations use it as criteria when selecting supply chain partners. Major manufacturers, shippers, and carriers have the clout to move the rest of the market. Smaller companies will invest in sustainable initiatives and the reduction of carbon emissions as a cost of working with major companies.

Better technology and planning will close the gap between planning and execution.

Traditional, long planning cycles don’t align to the expectations of today’s consumers. In addition to moving products, companies must deal with the added expectations from customers around product availability and expedited delivery — and in short, customers want what they want, and they want it now. While the Amazon effect has elevated customer experience across the board, it has also resulted in companies stockpiling trillions of dollars of inventory – a cost that very few aside from Amazon can justify. As a result, we can expect to see fewer companies stockpiling inventory and more focusing on improving inventory management and execution.

The American Transport Research Institute (ATRI) conducts an annual report on the operational costs of trucking. In its 2018 report, ATRI found that trucking companies traveled over 9.4 billion miles in 2017 and 20.7 percent of all those miles were empty. The industry can do better.

It has become essential for LSPs to be able to securely collaborate with their customers, carriers, and other service providers on a neutral digital platform. Accessible data and predictive analytics will remain key competitive differentiators. By establishing a centralized, digital repository that provides the same access to all reliable data across the supply chain, retailers can promise improved customer experience, competitive prices and a higher quality offering.

Low- or no-cost TMS-like solutions will become a priority for motor carriers.

Motor carriers are a critical link in the supply chain — yet they are the most dispersed and least connected of transportation modes. While they carry a huge volume of cargo — more than 70 percent of domestic tonnage— the vast majority are part of small organizations: 90 % of firms operate six trucks or fewer (source: American Trucking Association). Carriers, LSPs and shippers need to embrace solutions that provide low- or no-cost TMS-like solutions that empower even a single-truck firm with access to logistics and supply-chain networks.

Smart technologies will decrease the amount of time it takes for an invoice to be processed.

Currently, LSPs, freight forwarders and shippers need to wait weeks/months for invoices to be processed, which impacts their bottom line. But, with the increased investment in and use of smart technologies by companies along the supply chain, the amount of time it takes for an invoice to be received and paid will significantly decrease. This will also lead to better and stronger relationships between companies along the supply chain.

Artificial Intelligence will reach its potential by becoming domain specific.

The potential productivity gains from AI are anticipated to be anywhere from $13.7 trillion to $15.7 trillion by 2030, according to the McKinsey Global Institute and PricewaterhouseCoopers, respectively. The next phase of AI success happens when technical capabilities are matched with industry-specific expertise. We are at a significant inflection point in the adoption of AI-enabled solutions. Linking domain expertise and data with technical innovation is necessary for technology to reach its full potential to deliver measurable, effective results to the companies that implement them.

Tariffs and trade woes mean new supply chain opportunities in Southeast Asia.

Bigger, more sophisticated supply chains will seek out new primary sources. In part due to the tension over tariffs with China, companies are moving their supply chains out of the country and building up new footholds in Southeast Asia. Aside from tariff concerns, companies are looking at overall cost of business and the availability of resources to meet their needs.

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Blume Global & Hapag-Lloyd Kick-off 2020 Partner Connectivity

This month marked the beginning of Blume Global’s support of Hapag-Lloyd’s global network of carrier partners. Hapag-Lloyd’s selection was confirmed earlier in December with a start date in January starting in North America to ensure that high-quality, door-to-door service capabilities were provided for its partners.

Known for being a global leader for shipping companies, Hapag-Lloyd boasts a fleet of 231 container ships, of which include competitively modern reefer containers that require expert handling and a level of visibility and partner connectivity that goes beyond the basics.

“Blume Logistics will help improve the quality of our door service for our customers including first and last-mile visibility while enhancing the efficiencies of our motor carrier partners”, said Uffe Ostergaard, President of Hapag-Lloyd North America Region. “Our North American customers are asking for enhanced end-to-end shipment visibility to better manage their supply chains and by implementing this integrated cloud-based solution we will be able to offer that value-added service.”

Blume Global will manage a streamlined connection for Hapag-Lloyd’s motor carrier partners, enabling digital and hassle-free capabilities for dispatch work orders, drayage rates, appointment scheduling, accessorial charges, live tracking, proof of delivery, invoicing and robust reporting.

“Blume Logistics helps companies successfully manage logistics execution across the supply chain network, and around the world, with first and last-mile shipment visibility and control over transportation spending. It also improves customer service quality and enhanced vendor relations,” said Pervinder Johar, CEO, Blume Global.

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Blume CarrierGo Provides Motor Carriers with All-Encompassing Business Solutions

This year’s Intermodal Expo in Long Beach, California featured some of the latest solution offerings disrupting the transportation sector. Among leading industry experts including logistics and supply chain solutions provider, Blume Global unveiling their latest product offering, Blume CarrierGo. Blume Global boasts over 25 years of transportation solution offerings in the cloud enabling international multimodal operations including shipment planning, execution, visibility, invoicing, invoice processing & settlement.

“Blume CarrierGo is a product we created that offers our global network of 7,000-plus carriers more than just execution, adding more value for both the carriers and the drivers,” explains Glenn Jones, GVP Product Strategy at Blume Global. “CarrierGo is localized in 22 languages and utilized by customers around the globe, so it’s not limited to the United States. This solution enables carriers to increase turns per day while reducing empty miles and maximizing efficiencies.” 

The days of manual processes are becoming a thing of the past, particularly in transportation and carrier services as automation continues setting a new and more improved standard of streamlining operations. Blume CarrierGo solution identifies processes such as appointment scheduling for carriers lacking levels of automation needed for optimization. Another example is opportunities with street turns found within the Blume import and export-heavy freight forwarding customers.

“We have insight into what independent freight forwarders might not be able to see, such as import and export maps leading to an opportunity for a street turn recommendation or automatic allocation. Dwell times also provide an opportunity for automation. We may have 20, 30, or even 50 carriers trying to pick up containers out of the same terminal. By leveraging our visibility across multiple freight forwarders we can either make recommendations or we can delay making appointments through the insight we have into marine terminals with delays,” Jones adds. 

And how about invoicing? Blume covers all bases for carriers in terms of accessorials and eliminating the element of surprise when it comes to unpredictable charges backing up processing times. The Blume solutions process requires carriers to gain approval for accessorials before they even happen. 

“If a carrier needs to get to a port and they’re unable to, there might be a demurrage charge or there might be a carrier in a dwell time charge situation unexpectedly. They can gain approval from the buyer for that accessorial and when it appears on the invoice days – or hours later, there’s no surprise and the invoice will be processed faster,” Jones adds. “This is particularly useful for carriers in 3rd world countries, where the carriers tend to be much smaller and require payments quicker than what the freight terms offer,” Jones adds. 

Processes like these are found within the CarrierGo solution, providing maximized efficiencies and reducing costly and time-consuming overhead freight audits and manual payment processes. Carriers are not only paid on time, but have increased opportunity for invoice factoring discussions in international markets. This is a major differentiator found within the Blume solutions structure impacting global scale capabilities across the supply chain, creating seamless flows between all players and competitors in the multimodal sector. 

For more information about how Blume CarrierGo can improve your cargo needs, please visit booth 512 at Intermodal Expo or visit Blume Global on the web. 

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Glenn Jones, GVP Product Strategy, Blume Global

 Glenn has a proven track record of growing businesses by building and leading product management/marketing and R&D organizations to define, develop, position, and sell highly innovative and high value enterprise solutions delivered in the cloud. He was formerly the COO of Sweetbridge and the CTO of Steelwedge Software. He also held leadership positions at several other companies, including Elementum and E2Open.

Google Cloud added to Blume Global’s Advanced Technologies Toolbox

Blume Global and Google Cloud announced their technology partnership earlier this week, adding to Blume’s already extensive tech toolbox. The company confirmed the partnership will help to improve artificial intelligence (AI), algorithms and machine learning for customers.

The Google Cloud platform provides companies with increased visibility on shipments while enabling them to more accurately predict estimated time of arrivals through its real-time cloud-based performance features.

“Digital supply chain capabilities are evolving quickly and partnerships like this play a critical role in connecting those capabilities and enabling next level integration. A strong ecosystem of partners is crucial to the success of a modern supply chain,” said Simon Ellis, program vice president, global Supply Chain Strategies at IDC.

Blume currently employs data management, blockchain, AI/ML, cognitive interfaces and visualization as part of their strategy to support customers with supply chain solutions.

“We’re delighted that Blume Global will bring its leading digital supply chain capabilities to Google Cloud” said Kevin Ichhpurani, Corporate Vice President, Global Partner Ecosystem at Google Cloud.  “Retail customers want to modernize quickly, and our partnership with Blume will be an asset to them, letting them leverage Blume’s expertise in supply chain alongside the scalability, flexibility and leading AI and ML capabilities of Google Cloud.”

“By joining Google’s Cloud Technology partner program, we are able to focus more on developing our proprietary technology to create advantages in the supply chain,” said Pervinder Johar, CEO, Blume Global. “We chose Google Cloud because they are an open, neutral cloud platform that allows us to scale quickly and take advantage of their expertise in technologies like AI and ML.”

Technology’s Impact on the Supply Chain

Without a crystal ball to predict disasters and variables beyond our control, freight companies need strategies to help them avoid as many service disruptions as possible. These aspirations are actually possible by using data from technologies such as artificial intelligence (AI), machine learning and predictive analytics. Technological advancements such as these can help reduce downtime and improve efficiency, productivity, service-level agreement compliance and customer satisfaction.

When dealing with regions prone to hurricanes, earthquakes and other natural disasters, the safety of those who live and work there is the priority. In addition, to those who work in the supply-chain industry, the significant impact and disruptions caused by weather-related events is high on their list—particularly in regards to trucking.

Trucks are an indispensable part of the U.S. economy. Tractor trailers carry more than 70 percent of the freight tonnage transported throughout the country, which means interruptions (natural disasters, weather related or driver shortages) are more than just an inconvenience. As trucking companies enhance their preparedness plans, supply-chain solutions that embrace new technologies can help mitigate longer-term logistical and financial nightmares.

In a relatively short time, technology has drastically changed the supply-chain ecosystem. The most immediate and noticeable benefit has been the introduction of automation—a human-centric endeavor to manage many manual processes, interactions, touchpoints, handoffs and even the physical assets inherent in the supply chain. Longer-term benefits will be driven by the data created with every process and interaction across the supply chain, however. The future of supply-chain optimization harnesses the power of these technologies and their massive amounts of data and applies it to the real-time decision-making process.

The Data-Driven Supply Chain

When applied to AI and machine learning, data is the driver for predictive capabilities. With it, future performance can be optimized based on past results. With powerful potential to positively impact every aspect of the supply chain, environmental data offers insight into external factors such as historical traffic and weather patterns that can inform crisis plans, or be used to help reduce fuel costs, maximize productivity and meet increasing demands.

The real value is created when this external data is combined with enterprise data—identifying patterns and areas for optimization within each company, to fuel better planning and resource utilization during emergencies, and every other day of the year. Predictive analytics uses historical service data and machine learning to identify and predict outcomes—which becomes increasingly valuable as companies collect more and more information.

Predictive Analytics, Predicting Weather

Each year, storms put an incredible strain on the supply chain as flooding and power outages close ports and prevent trucks from entering affected areas. Predictive models can provide an early look at upcoming weather systems, while historical data can speak to what those models have led to in the past. This helps companies to make data-informed decisions like whether their trucks should hit the road or not.

While predicting the path and impact of hurricanes is not a perfect science, leveraging analysis from previous storms arms companies with important information such as which roads to approach and avoid, where utilities are historically weakest, and the most efficient (and safest) path to the destination.

For the freight sector, predictive analytics are highly useful for managing capacity problems by enabling a more accurate assessment of contributing factors to future performance, such as weather, job type, driver availability and day of the week. This information powers schedule optimization, the tracking of shipments, routing and job prioritization.

The end result is greater efficiency which can even have a positive impact on the massive shortage of truck drivers in the U.S., a problem that is escalated by hurricane season as many drivers are left to sit on the sidelines while fleet from elsewhere are redirected to crisis regions, taking them off their regular routes. The impact can also be felt by industries reliant on freight and on time-sensitive logistics, particularly the retail industry which shares peak pre-holiday shipping and preparation season with the most prevalent time of year for hurricanes.

As supply chain operators continue to embrace advanced technologies, organizations are poised to be in prime position to take more control over their shipping process—regardless of external factors at play. Hurricanes are an unavoidable catastrophe, but data used in the right way can help mitigate the duration and severity of any disruption.

Pervinder Johar is CEO of Blume Global, a leader in global logistics and digital supply chain solutions, which is headquartered in Pleasanton, California, and has offices in Chicago, Hong Kong and Wellesley, Massachusetts.