On November 4, we connect with Bart De Muynck, chief industry officer with project44, for the INSIGHT webinar “From Competitors To Partners: Smart Collaboration To Overcome Supply Chain Challenges.” Today we preview that presentation with a chat about the value of teamwork in our increasingly digital industrial world. Take a look…
Smart Industry: How is the digital transformation of industry spurring collaboration between / within enterprises? Do digital approaches ever hinder collaboration?
Bart: I believe companies need to be doing more when it comes to digital transformation in order to have the right technology to react in a quick and intelligent way. The level of digital transformation we are seeing is increasing, but it is still not enough.
C-suite leaders must shift their perception of “digital transformation” in the supply chain and logistics space to better incorporate a holistic view of their total operations. The logistics sector is becoming more complex with more transactions and more partners in the ecosystem. Supply chain leaders need better processes to succeed in these challenging conditions. To do so, they need reliable data to find a benchmark of where they are at, then use that data to make massive improvements.
EY data indicates that 63% of CEOs believe technology and digital transformation are the prevailing trends that will have the greatest impact on their businesses—and specifically greater use of data is the top priority for C-suites to drive growth. These technology solutions have helped companies overcome labor challenges in the supply chain industry by prioritizing time and focusing attention on areas where people perform better than machines and reduce employee cognitive overload.
Digital approaches can improve collaboration with increased visibility and better, more accurate data. Being armed with the right data will allow supply chain leaders to make informed decisions on how to best collaborate with other shippers.
Smart Industry: What are the greatest opportunities for collaboration to overcome supply chain problems?
Bart: Until recently, few shippers seriously considered collaborating with each other. Although many shared lanes, factories, distribution centers and retailers, the technology, the data and mindset or motivation to collaborate were lacking. Just identifying suitable collaborators would have required months of data-gathering and number-crunching. Now that real-time transportation-visibility platform usage has become more widespread with large amounts of leverageable data accessible for ever more supply chains, I believe the moment for collaboration has arrived. Arguably, collaboration is the key to improving supply chains.
The process begins with connecting shippers, carriers and 3PLs into a data collection network. This data foundation grows more mature and reliable as it is checked against multiple sources and cleaned. Eventually, predictive insights—like ETAs and inventory forecasting—can be tested for accuracy.
The availability of high-fidelity data allows artificial intelligence and machine learning (AI/ML) to make recommendations. The intelligent solutions notice a carrier taking goods from A to B and surfaces a load for the return trip. It also notices three shippers moving goods from distribution center A to retailer B and prompts the carrier to consolidate loads. The data platforms allow this data and the intelligent insights to be shared across the supply chain ecosystem, paving the way for supply chain collaboration.
If AI/ML proves effective and trustworthy to provide accurate predictions and prescriptions, then comes automation. AI/ML takes the initiative, allocating unused capacity with human oversight. Shippers’ data, once siloed and underused, becomes extraordinarily valuable. The data that used to only be used by a single organization is now shared to make supply chains better for all.
Smart Industry: Do you endorse collaborating with competitors? How does this work / what challenges are there in aligning with the enemy?
Bart: There are a lot of challenges that arise when direct competitors consider collaborating. For example, it would be very difficult to get Coke and Pepsi on the same truckload to be delivered at the same grocery store. Who is to say which is offloaded first? A lot would need to happen for direct competitors to collaborate to that degree. Some shippers even see the way in which they ship their products as a competitive differentiator. At the same time, there is a lot of value in sharing data.
If shippers pool and connect data, they can tap into unused trucking capacity. When companies optimize only their own transportation network, inherently they sub-optimize the industry.
When a shipper books a truckload from point A to B, the cost factors in “deadhead miles” driven back from B to A without goods. Convoy (a project44 partner) estimates that trucks are empty 35% of the time.
Say that shippers, carriers and 3PLs pool their data through a real-time visibility platform that maps their plants, distribution centers and retailers. It sees which shippers share routes and when. An existing example of some of this pooling of the data can be found in project44’s Transportation Coop, where members can see the end points where trucks are empty.
Now, a shipper or 3PL can preemptively book a truckload from B to A that would otherwise be empty. Or the carrier can consolidate loads from shippers all going from A to B. Across their fleets, carriers reduce detention time and dead miles, increasing their per-mile rate. Thus, members of the collaboration network become shippers of choice when capacity is tight.
