LAS VEGAS — Shippers need to take a “holistic” approach to supply chain visibility, integrating technology that can provide a detailed view of freight activity with financial systems, sales, and other operations. And integration is needed both within their organizations and with their logistics partners, speakers at the JOC Logistics Technology Conference said Monday.
The biggest obstacle to that holistic vision, they said, is “cleaning” and standardizing data that feed transportation management systems (TMSs). “There are so many more sources of data, new sources of data, that weren’t available to shippers five or 10 years ago,” Jason Kerner, vice president of solutions engineering at project44, said during a panel discussion here.
“If you’re looking to enhance and get the most out of your TMS, the way to do that is by providing better data” to that TMS, Kerner said. “I can have hundreds or thousands of capacity providers in my network, but having a way to standardize information as it flows through my system and integrate that data in the TMS makes it easier to normalize and use that data.”
The ‘Holy Grail’ of visibility
Granularity when it comes to shipments is good, but a 10,000-foot perspective on the interconnected flow of inventory and money among all parties in a supply chain is even better. The “holy grail” of visibility has shifted from knowing where a shipment is at any time to being able to predict where capacity will be next week, and to maintain network velocity.
That’s a daunting goal for shippers whose departments are often low on the corporate totem pole when it comes to allocation of money for technology. To move higher on the list of corporate priorities, logistics executives need to begin thinking about visibility more strategically, and less tactically, stressing the benefits of leveraging freight data on a larger scale.
“Instead of talking about functionality, we have to elevate the conversation and talk about [freight] flow,” said Jack Oney, CEO of Oney Consulting and a former Procter & Gamble executive. “A shipment at rest is a shipment at risk. If you talk about flow, you can have a more strategic conversation and get the money to do those things you need to start doing.”
The logistics business is at a crossroads, and US shippers are looking for directions. Tight US surface transportation capacity and rising logistics costs throttled shippers in 2018, and collaboration with carrier partners and logistics providers is the best way to regain some control, as speakers said at last week’s JOC Inland Distribution Conference in Oak Brook, Illinois.
But shippers will need more and better technology, intelligently applied, to achieve that goal. The good news is rapid advances in technologies, including artificial intelligence (AI), machine learning, predictive analytics, and blockchain, offer them hope. But these technologies can’t be applied to problems overnight, and they need an underlying, unified strategy to work.
“In the past, we’ve looked at visibility and TMS systems separately,” said Guy Courtin, vice president of industry and solution strategy for fashion and retail at Infor, a global enterprise software company. “In the future, we’ll have to look at these concepts under one umbrella of visibility. There needs to be this convergence of technologies as we move forward.”
Insights, gleaned from visibility, to reduce waste, increase speed
Not too long ago, supply chain visibility primarily meant knowing where a shipment was, and often where it was hours ago, rather than minutes ago. “Dots on a map,” referring to shipments or assets, “are interesting,” said Oney. “Predictive ETAs [estimated times of arrival], that’s a little more interesting.” Too many visibility offerings fall short on identifying problems while there’s still time to fix them.
“Identifying a specific shipment is only needed in a time of crisis, but when hyper-care is needed, that’s when a lot of systems fall apart,” he said. “That’s when we need them most. Too often, we’re answering the question, ‘Where was that shipment?’ rather than, ‘Where is that shipment now? Where do we need to add resources?’ That’s where we haven’t done so well.”
“Everyone’s talking about data — I’ve heard data is the new oil,” said Mike Powell, chief technology officer of third-party logistics provider Seko Logistics. “But as we develop this collaborative approach in the supply chain, we have to talk about what insights we can glean from visibility tools to really get the waste out and drive changes in operations quicker.”
Data may be the new oil, Courtin said, but when you think about oil, “it’s nothing until you refine it. You need to do that not just in your TMS but in your whole supply chain,” in other words, across the enterprise. “One thing I would suggest is looking at the historical data that’s available. That gives you some understanding and helps with benchmarking.”
As to where visibility is most important, Oney has few doubts. “This has the best chance to win in trucking and it needs to win in trucking,” he said. Trucking, compared with ocean transport and even intermodal rail, is much more “opaque,” with millions of trucks on US highways each day and even more opportunities for loads to go astray or something else to go wrong.
Oney sees visibility combined with AI automating more processes and helping shippers decide when to ship freight by truck, rail, or other mode. “AI is interesting because it’s really about the ability to process tons of information that a human otherwise could not do,” he said. “AI is going to do a lot more than blockchain will ever think of doing.”
And that future is not far off, he said. “It’s an exciting time to be in logistics, for sure.”
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