Digital Supply ChainsNews

Collaboration will unlock the next phase of supply chain digitization

Digital transformation has been driving productivity gains and shrinking costs in transportation and logistics for more than a decade across shipping, trucking, rail, and air. Information technology has driven container ship crew sizes down even as TEU capacity swelled: in the early 1980s Hapag-Lloyd operated 3,050 TEU vessels with 40 crew members, but today Maersk sails 18,340 TEU vessels with 13 crew members. Based on our conversations with tech-enabled freight brokerages, we have found that automated workflows now allow brokers to cover 3-5x more loads per day than ten years ago.

Yet the pressures on supply chains keep mounting, making it more vital than ever for shippers, carriers, and 3PLs to keep innovating. The red queen hypothesis applies here: companies must constantly adapt and evolve not merely to gain competitive advantages, but simply to survive. Soaring warehousing costs have created incentives for shippers to trim inventories, making shipment visibility and velocity critical. Volatile trucking spot rates have raised the stakes of potential service failures—in recent quarters, 40% of S&P 500 companies have said that freight costs are among the most substantial risks to their earnings.

We believe that multi-partner collaboration will usher in the next wave of digital transformation in the supply chain space for several reasons. The first is that the supply chain’s fragmentation has led to a proliferation of inefficient, error-prone manual communications processes, even for shipments moving relatively smoothly, and has caused disputes over exceptions to be prolonged and wasteful. The second reason is that customer service has become a differentiator for transportation and logistics providers: shippers and consignees put a greater premium on transparency and collaborative decision-making than ever before.

“We are seeing something I’ve never seen to this extent in my 20+ year career,” Dave Dallas, President of Brokerage at SunteckTTS, told FreightWaves, “and that is shippers who want collaborative relationships with their 3PLs, who say ‘I understand, I get it, I want to work hand in hand.’”

Current electronic tools for collaboration are showing their age. In the late 1990s and early 2000s, email decisively penetrated American office workplaces and began to replace communications processes built on phones and fax machines. Email had obvious advantages over its analog predecessors: conversations between multiple parties were automatically recorded and archived; files could be passed back and forth without paper; large organizations could instantly push top-down directives. But now email is the legacy technology and its limitations are becoming obvious. 50-60% of all communications in the supply chain are routed through email, but the technology is not suited for managing complex transactions, sharing realtime data, or communicating after business hours. Messaging apps like Slack are better at rapid-fire conversations, but they’re still manual communications tools where one person physically types a question to another person and awaits a response. What is needed is a truly multi-partner platform that analyzes data and generates insights instantly accessible by all stakeholders, without the need for repetitive human interactions.

In our view, Slync’s approach to cloud-based supply chain software perfectly positions the company to help its clients unlock the next step changes in digitization, collaboration, and operating efficiencies. Slync’s products sit as a complementary layer on top of internal and legacy software like Excel, SAP, Oracle, and JDA, and serves as a platform for creating multi-partners views into data and insights.

“We took a different approach by integrating to and leveraging existing internal and legacy systems rather than replacing them,” said Chris Kirchner, Slync CEO and Co-Founder, “Doing so enables Slync to fill missing gaps in multi-party visibility, apply predictive AI to find hidden data trends, and take action through automated workflows.”

A number of Slync’s engineers came from Salesforce’s Einstein project, an artificially-intelligent customer relationship management tool that predicts a customer’s propensity to buy and makes custom recommendations. Slync has taken the same approach with its software: by aggregating historical data and building predictive analytics on top that multiple partners can see, Slync creates a ‘shared reality’ that removes friction from collaborative decision-making and dispute resolution.  

“Recent studies show predictive AI to grow to over 75% adoption across supply chain companies within the next 5 years,” said Raj Patel, Slync Chief Product Officer and Co-Founder. “We have engineered a product that can help customers get started today.”

Imagine that a steamship line becomes aware of a port delay on the West Coast that will disrupt a time-sensitive shipment already en route in a container box. The port might say that average container dwell time has risen by 6 hours to 50 hours, but historical data in Slync’s platform shows that actual dwell times exceed 60 hours. The platform would automatically adjust the shipment’s ETA and alert the freight forwarder and consignee about the situation in advance, with enough time to arrange for expedited shipping to make up lost time. In this case, Slync would eliminate recursive manual communications processes—emails from ship to forwarder to customer and back—that would have reproduced inaccurate information and caused further issues and missed deadlines in the shipment lifecycle. Because the crucial data about the actual port delays is in Slync’s software, it’s instantly accessible to all parties to the transaction, guaranteeing that anyone in a particular organization who needs the information can access it on-demand, rather than simply hoping someone forwards the email to the correct address.

Slync’s capabilities will accelerate collaboration between supply chain partners, whether that’s providing immutable temperature records for the biopharmaceutical cold chain or building artificially intelligent bots to help shippers identify the least efficient distribution centers in their networks. The company doesn’t create out-of-the-box solutions in search of a problem, but consults with its customers, listening to them talk about pain points from their perspective, and then designs bespoke products that allow the customer and its partners to open up and leverage the data they already have.

Slync’s approach to the market demonstrates the company’s understanding that despite the rise of big data and the internet of things, productive relationships are still necessary to get things done and move freight through the supply chain. By verifying the data on which collaboration is based, automating communication processes, and sharing intelligent analytics with multiple parties, Slync removes friction and adds value to partner relationships.  

Show More

John Paul Hampstead, Associate Editor

John Paul writes about current events and economics, especially politics, finance, and commodities, and holds a Ph.D. in English literature from the University of Michigan. In previous lives John Paul studied Shakespeare in London and Buddhism in India, but now he focuses on transportation and logistics in the heart of Freight Alley--Chattanooga. He spends his free time with his wife and daughter herding cats, collecting books, and walking alongside the Tennessee River.