Who could have imagined 10 years ago how technology would change our lives? That we'd be sitting in front of a computer in a ratty bathrobe at 2 a.m. ordering DVDs? That hopelessly lost drivers would be delivered from their plight by spoken instructions transmitted right into the truck cab? That a tiny microchip tag could use radio waves to announce to anyone with a scanner that it was attached to a 16-oz. box of corn flakes, packed in Lancaster, Pa., at 2: 54 p.m. on June 7 and would be best if used by August 2005?
If the last 10 years are any indication, we should be prepared for further upheaval in the logistics business in the next decade or two. But what exactly can we expect? Trucks running on electricity? Packages levitated and whooshed to their destinations by linear induction motors and compressed air?
Well, maybe not (after all, weren't we all supposed to be zipping around in flying cars by now?). But there's no denying change is afoot. Realistically, in the next decade we can expect to see considerable alteration in the way the logistics industry thinks of itself and configures its services.
Not all of those changes will be encoded within the complex circuitry of a microchip. Some of the most influential developments may well take place entirely within the human mind. The next decade is likely to usher in a wholesale change in attitude—particularly in regard to information sharing among the various logistics industry players.
Perhaps the most visible indication of this evolution in thinking will be greater collaboration between logistics providers and their partners and customers. Speaking at a session titled "Looking Back From the Future" during the Council of Logistics Management's annual conference in Philadelphia, panelists Craig Hall and Karen Galena told their audience that they fully expect that business people will overcome at least some of their resistance to sharing information on customer demand, production scheduling, cargo characteristics and routing/scheduling with carriers. Those who can bring themselves to share data on, say, their order backlog with service providers—even if they also serve the competition—will mine rich rewards when it comes to transportation planning, for example. The result may be a world in which it's not at all unusual for cut-throat competitors like Schick and Gillette to ship their razors to a customer like Wal-Mart in the same truck.
The new age of sharing won't come about just because everyone suddenly starts feeling all warm and fuzzy about their partners and some-time competitors. It will happen because those who don't adopt this philosophy will fail and fall by the wayside, according to Joseph Andraski, who chaired the session. "Wal-Mart shares its information. [Its] competitors say: 'I don't trust you,' and are slowly dying," noted Andraski, who serves as both managing director of the Voluntary Interindustry Commerce Standards Association (VICS) and as a professor at Michigan State's Eli Broad College of Business. "You can't hold information close to you and expect to add value," added Hall, who is founder and chairman of LeanLogistics Inc., a transport technology vendor based in Holland, Mich.
Not that sharing will come easily. Karen Galena reflected that the road to collaboration was still going to be a bumpy one. "Even within organizations, you have problems with sharing," said Galena, who is vice president of specialized logistics at Sears Logistics Services in Hoffman Estates, Ill. If information is power, it seems some people still haven't figured out that the power is often exercised nowadays by sharing it rather than restricting it—even though people like Jack Welch, retired CEO of General Electric, have been beating the drum about the value of sharing since 1989.
Dare to be green
Another factor driving technological change, surprisingly enough, is the environment, or to be precise, the increasing public pressure on carriers to curb air pollution and to reduce their dependence on fossil fuels. If experience in other industries proves a reliable indicator, truckers may well find that being lean and efficient and reducing their impact on the environment in fact works out to be cheaper as well.
Remember those hand driers that suddenly appeared in public restrooms, touted as a response to your concerns about the environment? Well, from the facility operator's point of view, after an initial investment, electric driers are a lot cheaper than employing someone to constantly refill paper towel dispensers and empty trash. In theory, trucking companies have the same sorts of incentive to burn through less fossil fuel in delivering your goods—not only will they pump less carbon dioxide into the atmosphere, but it will cost them less.
Customer demands may well nudge things along. At least one company is trying to lever its power over its truckers to persuade them to clean up their act. Interface Inc., the largest manufacturer, marketer and installer of carpet in the world, has a chief executive, Ray Anderson, who had a "Road to Damascus"-type realization in 1994 that his company needed to become environmentally sustainable (that is, not simply chewing through non-renewable resources while spewing pollutants). Ever since, Anderson has been searching out and finding practical ways of moving toward sustainability, including supply chain practices.
Atlanta-based Interface is a member of a scheme called Smart Way, sponsored by the U.S. Environmental Protection Agency. The EPA is awarding grants to help states and non-profit organizations install truck stop electrification technology. Truckers stopping at plazas equipped with this technology would be able to plug their vehicles into a sort of giant electrical outlet, which would enable them to run their air conditioning and heating systems as well as refrigerators and TVs without having to leave the engine idling. The EPA claims this greatly reduces emissions from trucks parked at truck stops and other waiting areas. Interface is working with its trucking service providers to get them to sign up for Smart Way and other green programs.
Not that that's easy. Tim Riordan, vice president of supply chain at Interface, says that carriers are in a real bind because, depending on which door of the EPA they walk into, they get a different answer to questions about how to reduce the environmental impact of their fleet operations. "For example, diesel technology improves emissions but kills fuel efficiency!" says Riordan. "You need to step back and look at the total process."
All the same, Riordan says, some sustainability efforts are actually pretty simple and cheap. Interface has partnered with American Forests—a not-for-profit that helps companies offset emissions they produce in the course of business by calculating the number of trees needed to absorb the CO2 and then planting them, through its Global ReLeaf Program. In 2001, for example, Interface Inc. sponsored the planting of more than 8,000 trees to offset the environmental impact of its business air travel. Riordan is trying to persuade Interface's business partners, including logistics providers, to consider doing the same. It's an uphill struggle, he says, but 10 years should see some significant progress.
"From a carrier perspective we do try to understand what their emissions initiatives are. A high-end company like FedEx Freight, that really gets it, applies all sorts of tools to make its distribution network as efficient as possible, because that makes it cash efficient too,"Riordan says."So the good news is it goes hand in hand. But it's not possible everywhere."
