Google Inc. (NASDAQ: GOOG) is and will likely always be associated with its search engine. What is less known is the company has moved aggressively to support logistics and supply chain operations with its Google Cloud platform.
Given Google’s scale and expertise, the runway for all stakeholders is potentially enormous. Google Cloud is in the early innings, but it has already attracted attention and business. For example, XPO Logistics Inc. (NYSE: XPO), which is as advanced an IT player as any in the transportation and logistics industry, recently agreed to offload key supply chain support functions to Google Cloud. Given the ubiquity of the Google brand and the fact that it is ahead of most big platforms to penetrate the supply chain segment, there will likely be many more such deals.
Earlier this month, Hans Thalbauer, Google Cloud’s managing director, global supply chain, logistics and transportation, spoke to FreightWaves about the unit’s mission and its value proposition.
FREIGHTWAVES: What led to the formation of the platform to support logistics activities?
Thalbauer: “Supply chain disruptions have further proven the need for more up-to-date insights into operations, inventory levels and more. However, siloed and incomplete data is limiting the visibility companies have into their supply chains. We saw an opportunity to help customers gain deeper insights into their operations and optimize supply chain functions, from sourcing and planning to distribution and logistics.”
FREIGHTWAVES: For those who think of Google just as a search engine, can you describe what the Cloud program does for supply chains?
Thalbauer: “We provide multiple solutions that help businesses build their supply chains with data and AI. For example, our Supply Chain Twin program allows companies to combine data from multiple sources, all while requiring less partner integration time than traditional API-based integration. Some customers have seen a 95% reduction in analytics processing time, with times for some dropping from 2 1/2 hours to eight minutes.”
FREIGHTWAVES: The past two years have been extremely challenging for supply chains. What are the sticking points even today and how is the Google platform addressing them?
Thalbauer: “The most challenging part is the unpredictability of it all. The past two years have been filled with challenge after challenge that makes it difficult to plan and prepare for. We are living in a post-outsourcing world. This means supply chains will become more regionalized. Reducing global dependencies and risks, as well as a focus on sustainability, is leading to that. A program such as Supply Chain Twin allows businesses to create a digital twin, providing data from their own business as well business partners and global events, allowing them to make data driven decisions.”
FREIGHTWAVES: Is Google Cloud designed to supplement existing in-house tools or replace what companies already have? And are you aiming at attracting new customers or to work with existing businesses?
Thalbauer: “We aim to do what is best for the customer. If they would like to adopt some of our technologies to supplement what they already have in place, then we can do that. If they would like to do a full adoption of Google Cloud technologies, then we can also do that. One benefit of Google Cloud is that it is a flexible solution that aims to meet the various needs of customers.”
FREIGHTWAVES: You recently signed agreements with XPO and with warehouse technology firm Dematic. Can you outline what you are doing for them and what value they should see from the relationships?
Thalbauer: “We are working with XPO to support their customers’ supply chains with our AI, ML and data analytics. XPO customers across various industries are facing many challenges, given an unpredictable marketplace with constraints, volatility and rising demands. By migrating several key applications to Google Cloud, XPO will be able to help customers by taking advantage of our scalability and availability of cloud computing, which will help with peak seasonality.
Google Cloud’s AI and ML tools, like Vertex AI, help XPO’s engineers experiment with algorithms and build a pipeline for data scientists to experiment. They also evaluate new algorithms and improve on existing algorithms for XPO Connect’s proprietary load-matching and pricing technologies. Additionally, tools like BigQuery, VertexAI and Looker are helping XPO optimize network planning by providing real-time updates on shipment statuses, allowing operators to take action and avoid potential shipping delays.
Our partnership with Dematic aims to support supply chain resilience by combining its supply chain expertise with our AI and ML technologies. By utilizing our technology Dematic will be able to develop and deploy multiple solutions for key markets including grocery, apparel and food and beverage.”
FREIGHTWAVES: Google appears to be the first nontraditional online platform to venture into the space. Should others decide to enter, how will Google differentiate itself?
Thalbauer: “One of the differentiators we are most proud of is that we are the cleanest cloud in the industry. Sustainability is an important aspect of our business and we see the impact that it can have in the supply chain industry. Not only do we provide top of the class solutions, but we are also working to take care of our planet at the same time.”
FREIGHTWAVES: Google’s core capabilities are driven by sophisticated algorithmic calculations. Has Google been able to leverage the algorithmic expertise to build logistics solutions?