It is hard to remember a time when disruptions to the global supply chain, including transportation bottlenecks, were so dramatically experienced by the general public as in the last two years. Seemingly everyone has experienced goods shortages, reduced product choices, delayed deliveries, and inflation. This has put significant pressure on companies in the transportation and logistics (T&L) industry to innovate and adapt. But reinventing a worldwide industry filled with legacy equipment, regulations, and high demand presents a significant challenge. Carriers are contending with a variety of transportation modes and transfer points, along with a more demanding customer base for whom it is critical to have real-time insights into supply and material statuses. Being able to monitor operations in real time, and then effectively leverage that data to drive efficiency and even create automated solutions will allow businesses in the T&L industry to streamline their operations and move goods more quickly through the system while providing greater visibility to their customers.
The New Tools of the Trade
Increasing connectivity of physical assets means that everything is now linked through the Internet of Things (IoT). The more sensors and other forms of monitoring equipment are employed, the more insight an organization has into the granular level of how they are operating. Utilizing IoT technology allows companies to better assess Overall Equipment Effectiveness (OEE) and engage in proactive practices such as predictive maintenance to reduce downtime, create safer environments, and ensure fewer disruptions to the supply chain. Examples of this include using IoT-based sensors transmitting GPS technology to track the exact location of goods, or to gauge the temperature, humidity and other conditions affecting raw materials, or to identify possible transportation bottlenecks and inform more efficient route planning. Manufacturers looking to implement “just-in-time" manufacturing strategies can produce goods much more efficiently and meet their customers’ demands if they can predict when they’ll receive raw materials. Shippers that have real-time visibility into the status of those raw materials will be differentiated from their competitors.
Moving from legacy, on-premises infrastructure to cloud infrastructure and SaaS platforms tools is essential to adapting to the new logistics environment. By employing cloud-based, relational database management tools, companies can now collect and analyze more data and deliver actionable results through a private cloud to mobile or remote devices. Examples of this include interactive freight tendering (or e-tendering), more efficient freight forwarding or settlement, and more effective management of transportation requirements from customers.
Database management technology is just one way to leverage the data being collected in Operational Technology (OT) environments. Innovations in machine learning and AI give companies the ability to collect data from thousands of sources in industrial settings and generate actionable solutions in real time. Companies can utilize new ideas such as edge computing to process data on site and send only business-relevant data to the cloud, reducing the time it takes to transfer data and allowing for fast data processing even in remote environments. This level of monitoring combined with the speed at which the data is being run through machine learning and AI platforms increases companies’ ability to automate and to make proactive decisions, rather than reacting to problems as they come. One example of this is an ocean freight company using AI and machine learning to analyze factors such as global weather patterns and ocean currents to predict the shipping route that will be the most fuel-efficient. Organizations that look forward, respond quickly, and have the data they need to make informed decisions are most likely to weather economic downturns.
Shift in Long-Haul Strategy
The pandemic has created more demand for local goods and produce, as consumers demand more locally-grown foods and countries have placed restrictions on the movement of goods between countries. This has created a greater incentive for T&L companies to make a strategic shift from long-haul supply and trade to move supply closer to the customer. It’s no longer about pushing goods into the market based on long-term demand forecasts. The new normal means using shorter-haul strategies to ensure just-in-time delivery for customers. Short-haul strategies demand better access to real-time data and the adoption of technologies such as robotics, IoT, automation, cloud and IoT/GPS tracking, all to enable faster and better decisions.
The recent supply chain upheaval has caused significant headaches for T&L providers and a need to accelerate digital transformation. While dealing with legacy equipment, increasing need for visibility, and stricter regulations, companies now more than ever need to leverage technological solutions to their advantage. Finding end-to-end solutions and taking new approaches to utilizing data and understanding consumer needs will provide companies with a holistic view of their needs and allow them to capitalize on new opportunities as the world continues to adapt to a new normal.
