Supply chain experts and software leaders converge to discuss the current transportation environment and provide valuable tips on what companies should be doing now to get ready for what’s coming next.
What happens when you bring supply chain software leaders, a Berkeley professor, and a top Gartner researcher together in one “virtual” room to talk about the current and future state of the world’s supply chains? You get a full view of what’s going on right now and engaging insights into what companies should be doing currently to reevaluate and future-proof their supply chains.
In a new Berkeley Innovation X webinar, Bart De Muynck of Gartner, Berkeley Professor Robert Leachman, PINC’s Matt Yearling, ORBCOMM’s Ashish Chona, and Christian Piller, VP of Project44 discuss the current market realities, the role that automation is playing in today’s logistics networks, and the rapid changes currently happening in the supply chain.
According to De Munyck, Gartner research shows that the current pandemic is the top supply risk for 2020. “This disruption is the biggest challenge that anyone has seen for most generations,” he says. “It has hit us like nothing we’ve ever seen before in supply chain and it has affected all countries, all industries, and all companies worldwide.”
However, besides the pandemic, logistics and transportation in general are ongoing challenges and still present a lot of other risks, including:
- Consumers are behaving differently
- Increasing demand for transportation
- Increasing demand for last-mile
- Increasing truckload rates
- Increasing parcel rates
- Carrier bankruptcies affecting capacity
- Increasing carrier cost and verdicts
- Increased use of digitized freight networks
- Increased use of technology
“The pandemic has certainly accelerated the digitization strategies of all corporations,” Yearling says, adding that the event also accelerated the shift to online commerce and pushed the need to align inventory to demand.
“There’s been a lot of consolidation and investment in the industry, because it is still highly fragmented and has room for technology enablement,” Yearling continues. “It’s inherent upon us to make sure we come together in the industry for the benefit of the joint customer.”
Unlocking Operational Efficiency
According to Piller, this is the first time in history that the supply chain has had a place in the boardroom and is now part of mainstream conversations. The consumer has driven at least some of this increased awareness of supply chain in the broader scheme of things. “More people are working from home and wondering why packages are taking a little longer to arrive,” Piller says.
Once the threat of COVID passes, companies need to be thinking about how they can create data-driven supply chain planning and management processes. Transportation management will pay a key role in this evolution. “Companies need an integrated view of the inbound and outbound networks across all modes,” Piller explains.
“Just planning all of the shipments you have in one unified central planner versus having a few different ways to plan transportation,” he continues, “will unlock a lot of operational efficiency, cost efficiency, and performance improvements.”
Piller also tells companies to put their customers at the center of the conversation when making these shifts. In fact, he advocates for starting from the customer and then working backward to find the best solutions. Focus on solving your customers’ problems and “doing something that redefines an experience, provides a new experience, or makes the customer feel better about interacting with you,” Piller adds.
Strengthening Supply Chains
Chona says the pandemic has highlighted the weakness in the supply chain and it’s made people aware that they are dependent on other parts of the world for products that they use today. Now, supply chain managers and executives are looking to retool their supply chains in the wake of COVID.
One potential area of improvement can be found in “lean,” or the pre-COVID approach of only keeping enough inventory on hand to fulfill orders during a specific period of time. As we all learned by the great toilet paper shortage of 2020, this strategy doesn’t always play out well during times of crisis.
“Maybe we should start thinking that it’s okay to have some excess inventory during a pandemic when you’re trying to serve the community,” says Chona, “even though in the past we tried to cut down inventory to be leaner.”
The key is to find the right balance between resiliency, efficiency, and agility. That’s where technology steps in to help, with digitization, automation, the Internet of Things (IoT), mobility, and robotics coming together to help solidify and strengthen the world’s supply chains. Information-sharing is equally as critical, says Chona, who points out that an equal system of partners sharing information ultimately benefits the end customer. “Information sharing in transportation is very critical.”
The Four Stages of Recovery
Wrapping up the webinar, De Muynck shared his thoughts on how the industry is innovating and highlighted Gartner’s four stages of recovery (and the technology that corresponds with each). Here’s a snapshot:
1st – React and respond
- Transportation visibility
- Digitized freight platforms
2nd – Redirect to new realities
- Transportation management
- Multi-carrier parcel management
3rd – Rebound to the future
- Driver management
- Yard management
4th – Accelerate opportunities
- Network design and modeling solutions
- Advanced analytics
“Once this crisis is out of the way, we still won’t be able to go back to our old ways,” De Muynck concludes. “Things are going to come at us much faster, and we’ll need agility and flexibility to be able to react accordingly.”