Increasingly, we are witnessing a swift and rapid change in the supply chain. According to a recent Geodis study, in the wake of globalization and rampant digitalization, commercial trade flows have evolved dramatically. Both the volume and the scope of services managed within the supply chain have reached unprecedented levels. The objectives and operational priorities are moving from a cost-oriented approach to a more demand and value-oriented approach, in order to maintain the high level of service increasingly demanded by customers.
On Friday, FreightWaves tuned in to a conference call hosted by Stifel in partnership with project44, a technology logistics network focused on creating “a smarter end-to-end shipping experience.”
The call was hosted by transportation analyst David Ross, the research director at Stifel Capital Markets. It featured Rob Estes, president & CEO of Estes Express, Jennifer Schopfer, vice president of GE transportation transport logistics, and Tommy Barnes, president of project44.
The discussion focused on why transportation leaders are leveraging automation and visibility technologies to stay relevant, and how they plan to fundamentally reshape the end-to-end shipping experience now and in the future.
“We currently have a disconnected shipment lifecycle,” says Ross.
Whether it’s manual database management, significant administrative costs, high EDI setup and maintenance fees, expensive annual software licensing, or what have you. What happens is you have limited visibility, outdated information, errors compounding on errors and the bottom line is: unhappy customers.
“I see unhappy customers. I see customer churn. I see increased costs. Errors compound the more you try to scale,” says Ross.
“The new way for happy customers is the cloud. The cloud changes everything. Why now? The gap between the weak and the strong is widening. The longer you wait to digitize, the more it will cost you. Those not investing in technology are at a competitive disadvantage now…and even more so in the future.”
So what do we do next?
Basically, what foundational technology and processes do you need to put in place to collect and take advantage of data? What could you achieve by moving up the curve? What accelerators can you use to get there faster?
Schopfer says, “You have to learn to fail, fail fast, and move on.”
“Dark spots often exist between supply points on the chain, and not even necessarily because of a competitive advantage. The more cooperative the sharing, the better for everyone. We currently have the technology and the data. You can do this now. It’s more cultural in nature. Breaking down the cultural barriers,” Schopfer adds.
In fact, according to the presentation research, 80% of your supply chain visibility comes from your partners.
Estes observes the incredible speed at which everything is suddenly happening. “What I’ve seen in the past 34 years of being in the industry is going to have less impact than what’s going to happen in the next two years,” he says. “As you look at the landscape of technology, transportation is lagging as an industry. It’s on the low end of the totem pole as far as getting IT support. We’re doing things today the same way we were doing it 15-20 years ago. The technology opportunities now are just huge. We want something that’s going to make our customers happier. I’m sure my competitors are thinking and feeling the same thing.”
Schopfer adds that another differentiating factor is that “you can get customers’ feedback a lot more rapidly. You make the process or the system you’re using get adopted faster and better.”
What challenges do they anticipate? “The fixed costs of drivers, and how they’re going to keep their customers happy,” answers Schopfer. Also for software development, she not only wants someone who understands Agile processes but also the supply chain. “Sometimes that’s like trying to find a purple unicorn.”
“In the longer term,” she says. “It’s something more to stay in front of, but it’s understanding blockchain. It poses an interesting opportunity, but we don’t know exactly how that’s going to work across the transportation networks. We’ve got to keep our eyes out for who the winners are going to be and how they’re going to scale.”
Is there a void in the talent space as it relates to pushing forward on some of these things?
“One example is that in the rail industry specifically there is an aging workforce and they’re looking at retirement. It’s an interesting time for digitization in the industry, but at the same time as someone who’s younger entering the industry, they’re just not used to working in a manual process,” Estes says.
“Keeping talent is also a challenge. We need to energize and encourage the talent we acquire. We’ll be competing for the same kind of talent that Amazon and other major suppliers are going to be trying to acquire,” Barnes responds.
“We automate our tendering process, and we use eDocs for this process,” says Estes. “We want visibility across the board for all this. We price by the cube. We want to make things clear across the board for everyone.”
“Be willing to pilot or to test things,” says Schopfer. “It enables you to test an object out quickly and get closer to buy-in and adoption. Second, try to think about digitization both within your organization and across your organization. Of course, it’s got to give you value within, but you’re also participating within the ecosystem. Third, strong leadership is a key ingredient to drive change and adoption. You have to have a strong leader to make an IT initiative transformation successful.”
In conclusion, the speed of change is happening exponentially. “I know collaboration is overused, but it’s true. We need to work together. It’s got to be two-sided. One side communicating, the other side not hearing does not work,” says Estes.