Supply Chain Leaders Forced To Get Smart
Biju Kewalram is Agility GIL’s Vice President for Operational Transformation. He has worked in the logistics industry in the United States and Australia for nearly three decades. He helps Agility teams and customers understand, adopt and implement technology intended to boost productivity, cut costs and improve service. Tradelanes asked him to survey the technology landscape and highlight advances that supply chain and logistics managers need to think about.
Remember when supply chain executives let the IT people worry about technology and digital trends? It wasn’t all that long ago that managing the supply chain meant procurement, inventory management and cost reduction. It also meant leaving technology to the specialists. Today, it’s vital to:
- Anticipate and respond to a world of continuously changing demands;
- Deliver faster than ever to satisfy a new consumer generation’s desire for instant gratification;
- Keep reducing inventory levels and delivery costs.
“Given the shifting landscape, it’s important to have a logistics partner with a strong digital orientation.” The good news is that a wave of radical innovation is making it possible to respond to the clamor for “faster, better and now!” It’s understandable that supply chain managers feel overwhelmed. The pace in this area is accelerating, making it harder to keep abreast and leaving little time for front-line executives to evaluate and test new innovations.
McKinsey predicted that the Internet of Things – the creation of a network of continually connected manufactured devices – would a have an economic impact of $3.9 trillion to $11.1 trillion by 2025. See the full article at Mckinsey.com
Amazon announced it will have the capacity to deliver “tens of thousands” of products purchased online to consumers’ homes within one hour. See the full article at Businesswire.com
“Supply chain management requires demand forecasting and network optimization, as well as traditional freight, procurement and inventory management,” says Essa Al- Saleh, CEO of Agility GIL, Agility’s commercial logistics business.
Your world keeps getting faster. How do you create a snapshot of the underlying technologies and trends reshaping today’s supply chains? How do you create a checklist so that you can recognize when disruption is occuring or giving your competitor an edge?
We’ve done that for you with this Survey of Digital Trends. Let’s start with a comprehensive list of the technologies that Agility is tracking – technologies you should be watching because of their potential to change the supply chain and logistics. Like others, Agility is aggressively evaluating digital trends. As one of the world’s top logistics providers, we’ve had hundreds of conversations with our customers about their logistics needs. Here is what they tell us is on their minds:
- Transparency & visibility – including tracking and event management
- Flexibility – adapting to changing requirements on short notice, including changing mode of transport, dictated by changing customer demand
- Lower inventory management costs – keeping inventory levels low (e.g. manufacture-to-order rather than manufacture-to-stock) and warehouse costs minimized
- Lower supply chain risk – being able to respond to disruptions like strikes and natural disasters, avoiding stock-out situations and avoiding obsolete inventories
- Predictability – having freight and inventory move through the network as planned
- Higher service quality – continual improvement of product and information delivery
- Lower overheads – reduced administration costs through efficiency and streamlined processes
- Simplicity – elimination of complex processes
- Lower transportation costs – through choice and flexibility
- Omni-channel distribution – ability to deliver into brick-and-mortar and e-commerce supply chains uniformly
- Self-service & integration – connecting systems for electronic interchange and ability to pull information as needed.
|ASPECT OF SUPPLY CHAIN / LOGISTICS (IMPACT AREA)||TECHNOLOGY DEVELOPMENT TRACKED OR USED BY AGILITY|
|Physical Product||Internet of Things
|Manufacturing||Additive manufacturing (3D Printing)|
GPS & Geolocation
|Partner Integration||Web 2.0 (including Cloud Computing, SaaS & Mobile)
Web services (incl. EDI)
Big Data / Data Analytics
Paperless (Paper to Digital)
IT Operations – Agile & DevOps
Each of these technology developments is discussed in the article The Internet of Things And Beyond.
Agility’s Al-Saleh says it’s important to remember that effective use of technology is not achieved in isolation: supply chains are chains of trading partners. And typically, 3PL providers and logistics specialists are better able to deliver on the promise of technology if they have the second necessary aspect in place to offer leverage: a strong, effective network of their own offices. A geographical footprint that matches your supply chain allows your logistics partner to offer standardized processes and standardized implementation of technology. Both, Al-Saleh says, are essential to your ability to leverage technology investments.
- Is your logistics provider able to scale the use of digital technology wherever you need to operate?
- Does your logistics partner enable partner integration and offer a mix-and-match of self-service and connected systems?
- Is your logistics partner able to offer multimodal support for integrated systems?
A World of Automated Logistics
Widespread testing of drones in urban settings has led to a focus on the tricky ‘final mile’ piece of delivery. But the greatest potential for autonomous transport is on long-haul routes. Autonomous, crewless ships – as visualized here by Rolls Royce – will join drones, long-haul aircraft and driver-less trucks in moving the world’s commerce.
Rolls Royce has been researching and developing vessel systems for several years. And this year, aircraft developer Airbus announced plans to develop an autonomous flying vehicle platform for cargo transport. Planes without humans aboard don’t need expensive, and heavy, life-support systems to keep cabins pressurized.
Uber’s offshoot, Otto, made its first delivery by self-driving truck in October, a consignment of 50,000 cans of beers on a 120-mile route through Colorado. Earlier in 2016, six of Europe’s leading truck makers ran “truck platoons” to Rotterdam port from as far way as Sweden and southern Germany. Not strictly a driverless operation, a truck “platoon” has a manned vehicle in the lead followed by two or three vehicles connected via wireless. DAF, Daimler, Iveco, MAN, Scania and Volvo are all developing this technology. The advantage of truck platooning is consistent speed, which will help traffic flow on heavily congested roads in Europe. Most accidents whether in the air, on the road or at sea, are caused by human error, so over time autonomous transport is expected to significantly reduce accidents as well as operating costs.
One day we will be using autonomous ships to deliver into fully automated ports, from where containers are delivered inland by driverless trucks and consignments delivered from ICDs to customer by drone.
To read more about autonomous shipping click here.