FROM MAGAZINE : Devising solutions for a seamless supply chain

From traditional logistics concepts to new era of digital logistics, the internet is steering tremendous increase in supply chain velocity and cost reduction through information sharing and logistics synchronisation between trading partners and service providers. Technology is shaping up more fascinating years to watch out in this space.

Shalini Nair

Global supply chain is perhaps one of the most complex ecosystems built by humans. The dynamics of today’s business demand quality, safety, transparency, ethical sourcing and delivery speed. Artificial Intelligence (AI) and Internet of Things (IoT) are increasingly being used to make freight supply chains more efficient and increase information reliability, thus advanced analytics-driven data aggregation platforms are now earmarked as an area to watch. AI in logistics includes predictive operations, back-office automation and new customer experience models. Augmented intelligence and machine learning techniques provide more efficient risk assessment techniques, personalising business interactions, providing more innovative ways to secure physical cargo and associated information. It is all set to transform the industry, giving rise to a new class of intelligent logistics assets and operational paradigms. It has the potential to significantly augment human capabilities. While AI is already ubiquitous in the consumer realm, as demonstrated by the rapid growth of voice assistant applications, this technology is maturing at a great pace.

With the help of AI, the logistics industry will shift its operating model from reactive actions to a proactive and predictive standard, which will generate better insights at favourable costs. For instance, AI technologies can use advanced image recognition to track condition of shipments and assets, bring end-to-end autonomy to transportation, or predict fluctuations in global shipment volumes before they occur.

Smarter supply chains are thriving on IoT platforms. For example, when a new customer signs a contract, production planning will start automatically. A digital signature triggers warehouse to pick and ship goods needed as outlined in the agreement. Then production is scheduled, qualified and available human resources are assigned by a system. This data infrastructure can now accurately predict things like delivery times and exact status of the shipment.

AI and IoT are regularly mentioned in the same breath, but there is a big difference in their adoption, scale and related costs. AI is relatively easier to build and implement, as standalone solutions can be delivered using AI based on data. Hrushikesh Kulkarni, head - process & project management, Cogoport states, “We use AI for several processes like freight rate forecasting, shipment issue flagging and shipper need profiling. IoT is a bigger challenge, as it exists in the physical domain and needs several stakeholders to invest in hardware to come on the same platform. An example of IoT within freight movement is real-time trackable containers and RFID-based seal scanning. We are seeing great interest among the entire shipping community to adopt these technologies, but some of these have not yet reached the scale and hence are quite expensive. As these technologies achieve scale, we will see a massive uptick in IoT adoption.”

‘Blockchain’ – A game-changer
Disrupted digitally, infrastructure and logistics firms globally are dipping into blockchain technology to ease supply chain complexities. Storing all product information in a single ledger improves transparency, cutting inefficiencies and risks of tampering - the challenges supply chain industry is very much prone to.

Amar More, CEO, Kale Logistics Solutions emphasises, “We are focused on digital trade facilitation platforms (single window platforms) covering government and other industry stakeholders. We work closely with leading global bodies like United Nations Centre for Trade Facilitation and Electronic Business (UNCEFACT), IATA and local institutions towards ensuring digitisation in trade facilitation. We are also working with some of the leading technologies like blockchain, AI, big data, machine learning to be incorporated in our solutions. Our solutions are being designed with blockchain technology that ensures secure data exchange and a tamper-proof repository for trade documentation. We are effectively using machine learning to evaluate and categorise data from physical documents and draw inferences from it. The output of this process is an insight, decision or conclusion.”

At the same time, Kulkarni says, “Blockchain is definitely one of the biggest buzzwords in the field of supply chain and logistics today. We at Cogoport are definitely keeping a close eye on developments in this area, as blockchain stands for exactly the things that we have pivoted our business model around - transparency and trust. Realistically speaking, the mainstream adoption of blockchain is still several years away.”

Speaking on blockchain being a nascent concept to logistics industry, Shadowfax, CEO Abhishek Bansal opines, “We are in the middle of pipelining our strategy around blockchain. Blockchain can capture immense amount of data in a transparent manner reducing the inefficiencies in data. Even we don’t have any complexities of putting any application or device on ground to accumulate data. We are working with few government agencies and figuring out what is the kind of strategy to be devised.”

Source: 4TiGO

Dheeraj Kohli, VP & global head, travel & transportation, Unisys opines that the discussions are around larger investments and more maturity in technologies that will drive blockchain’s future. He adds, “There is increasing awareness of how blockchain technologies can provide increasing trust and facilitate exchange of monetary barter across businesses. There are three aspects that India and other countries are addressing to facilitate adoption and realisation of this promise. One is how to get an ecosystem of stakeholders that actively participates and puts their trusts in it, the second is to actively maturing the technology to make it applicable in varied business scenarios and the third is to get to cost points that make it more viable.”

However, Maersk and IBM have launched blockchain platform to give correct and real-time tracking in association with ports around the world but the result of this is yet to be witnessed, reveals Gautam Prem Jain, co-founder and CEO, GoComet.

Source: GoComet

Labour to Automation
There is no doubt that the logistics industry is in the midst of a revolution as the convergence of online shopping, robots, AI and self-driving vehicles are bringing about transformative technological advancements. The potential of these innovations is hard to overstate; hence these advancements will improve efficiency and reduce labour costs. It is also clear that existing logistics jobs will be replaced by machines, especially for truck drivers and warehouse workers. While some unskilled supply chain jobs will certainly be on the chopping block, automation will also create new jobs in the process. Automation won’t necessarily replace everyone in the supply chain, but it is already changing many roles and what people do. This is true for all industries, where automation is proliferating. To ensure automation is helping and not hampering employment, logistics industry needs to invest in education and on-the-job training.

Commenting on warehouse undergoing huge changes with IoT and AI solutions, Jain states, “We are aware of how Amazon has automated warehouse system and adopted advanced technology to handle millions of shipments per day. Large corporates have been implementing similar solutions to make their processes more transparent and efficient. In international freight, there is a great potential for such solutions, and a lot is required to be done.”

Stating on the shift in the usage of man power efforts and discretion in the business, Kohli says, “The shift will be to drive towards use of human power in exceptional situations rather than the current scenario where the use of human power, paper processes and a lot of human discretion is predominant. This shift will invariably result in the identification of new opportunities, business models and further innovation.”

In any medium-to-large exporting and importing companies in India, one can see a small army of employees whose full-time job is to book, track and co-ordinate shipments. Due to the completely disjointed nature of the containerised freight industry and allied services, large pockets of information asymmetry exist, which give rise to the need for such manual intervention. Kulkarni affirms, “Through solutions such as Cogoport, the reliance of companies on manual intervention will go down drastically, while getting much superior business outcomes. This does not mean that any supply chain can be fully automated overnight. But we definitely see the role of supply chain professionals becoming much more strategic and much less transactional. Going forward, employees who are doing tasks such as shipment booking and tracking would need to upskill themselves to handle tasks such as freight purchasing strategy and end-to-end smoothening of supply chains.”

Customer First
Customers are more demanding than ever. With the global marketplace, these demands vary and have different expectations. The greatest advantage of the logistics industry is that it is largely universal because international trade has set guidelines, processes, terminology and more or less similar documentation. What is important is speaking the customer’s language and understanding their needs better and solve their problems more effectively. The business requirements vary with each region and along with it varies the customer needs.

Serving more than 4,500 clients across 20 countries, Kale has scientifically designed and processed a client engagement model, which helps them to capture the requirements and demands. Their solutions are flexible to be customised as per customer needs so it becomes a seamless process of building solutions that best fits customer requirements.

The example of collaboration between KLM Royal Dutch Airlines and TCS, display the airlines' interest to capture the growing digital services market, when it issued boarding passes on WhatsApp to nearly 3 million of its passengers in one year since its launch.

While demand for IT is prevalent across the world, the transport sector in India was and continues to be under-penetrated when it comes to the use of technology. Anjani Mandal, CEO & co-founder, 4TiGO comments, “Our primary mission is to level the playing field for all stakeholders in the transport ecosystem, especially the micro, small and medium enterprises (MSME) fleet owners and drivers, and help in ‘organising the unorganised’ through technology. We have created a digital platform named as 4TiGO where the entire logistics ecosystem can come together to interact, engage and transact transparently. The platform offers a whole host of business services to address the needs and challenges of each and every stakeholder in the industry, be it demand and supply aggregation for users and providers of logistics services; strategic partnerships with service providers to the transport industry, access to working capital, etc. For the supply chain industry, the platform offers unmatched supply chain visibility, efficiency and effectiveness. The ability to track and monitor the goods in transit allows the supply chain professional to further optimise their operations. The online documentation allows for seamless interface with GSTN/e-way bill, better traceability and compliance, and faster order-2-cash cycle.” The company formed in 2015 is funded by Accel Partners and Nandan Nilekani.

India’s logistics cost is making a lot of businesses uncompetitive. In the long run, a lot of these businesses are likely to become unviable. There is cost saving which is available but hidden, which requires a machine-based process. “With just two features, i.e. forcing compounded negotiations and enabling net landed rate-based comparison, with minimal human efforts, the GoComet platform can save 8-15 percent of the logistics cost, and hence make these companies become competitive as compared to the competition in China, Malaysia, Indonesia and Brazil,” says Jain.

He further adds, “Our core focus is on crashing down logistics cost for our customers. Compared to other players, the entire saving is achieved from existing vendors of the clients leaving no chance of errors or mis-handling of precious shipments by introducing unreliable vendors which other players do. All importers and exporters who are dealing with freight forwarders for their international shipments and have more than 10 shipments per month are the ones who can best utilise our software to reduce international logistics cost by 8-15 percent. Our target segment is large corporates and each of them have their own set of practices and processes for their logistics department. Hence, one size fits all is not possible. Our team of consultants advise and implement the required change management practices for each one of our customers individually.”

On the same lines, Bansal declares, “With technology in place we are able to reduce the cost by about 20 percent in last mile logistics. Our services include offline-to-online (O2O), where we have to deliver products within 3-4 hours. As we are able to bridge the gap between data of demand and supply, we are able to know which truck driver or delivery boy is the nearest available one.”

Unisys today provides solutions that facilitate air cargo business across the full value chain. They deliver cloud solution as ‘Software as a Service’ (SaaS) and were first to introduce such a service in 2007 and have transformed it as a robust, reliable and a high performing model. “Going forward we believe that smart devices and smart analytics powered by secure and personalised business solutions is the future of supply chain solutions. Digi-Pet, our recently launched product is one such offering. Such solutions will pave the way for making the whole industry work, interact and deliver services in a more efficient manner,” states Kohli.

Cogoport’s customer base on the freight purchase side is varied, and includes small importers and exporters moving as little as 1 or 2 containers per month, to large institutional clients moving thousands of containers per month. “Our product has been designed to cater to both ends of the segments, but different customers find value in different parts of our offering. The small exporters and importers benefit from the total transparency in rates and availability of a wide array of shipping options at the click of a button. Large companies benefit from our product features such as rate discovery, invoice audits, shipment tracking and analytics. We are continuing to add features to our product to meet and exceed the expectations of both ends of the market spectrum. All this is on the buyer side of our product. As a marketplace, our supplier partners are also our customers, and we have invested a great deal into creating value in our supplier portal. We offer advanced analytics, real-time rate feedback and access to thousands of live enquiries and request for quotes (RFQs) to our supplier partners. Thus, our focus is on building win-win offerings on both sides - buyers and sellers of freight services,” adds Kulkarni.

Winning Edge
Collaboration is not a technology but a technique that ensures success. Collaborating with partners spell for success as well as innovation which is considered as a path- breaker.

Speaking on signing MoU with the Netherlands-based Cargonaut, More opines, “This is first of its kind initiative where a digital corridor is created between India and the Netherlands to enhance shipment visibility and optimise flow of cargo data. Through this unique trade facilitation initiative, the collaboratively created digital corridor will facilitate flow of information within the stakeholder chain and optimise cargo visibility across the stakeholder network by use of blockchain.”

To ensure smooth and safe transit of goods, 4TiGO has implemented solutions to take utmost care during each trip. All trips on the network are tracked and monitored through their entire life cycle. They have partnered with clients on their internal transformation initiatives to help improve their zero-defect delivery metrics across the supply chain. 4TiGO has also partnered with Indian Oil Corporation Limited (IOCL) to help deliver a comprehensive solution for on-trip support to its network participants. This includes amenities for safety, security and convenience of the truck, goods-in-transit and drivers at pit-stops across the country, and a roadside assistance network for its participants.

Unisys serves 20 global cargo organisations across the globe. Their multi-tenant solution delivery is geared towards sharing the commodity features of the solution while accommodating unique client needs. Kohli opines, “We give an environment of collaboration to our clients through our user group community. This collaboration fosters new ideas, the clients benefit from our investments in the solution and also share the cost of implementing new features among them. It is true that the freight transport policies, business preferences, and geopolitical impacts across regions result in different ways of executing the same freight process. This dynamic nature is further amplified by changing business needs in the same region. Our solution which is highly configurable and coupled with an externalised business rules engine helps us to address the needs of our varied clients.”

…Continuing to Emerge
2017 was a catalyst year for the cryptocurrency. In India, many start-ups have invested in blockchain technology and made it a national fantasy. Even the Indian government is getting more serious about using blockchain into the growing digital economy. Saying so, blockchain as a concept is still naive in India, there are no clear policies, regulations and infrastructure yet in place. The communication and collaboration potential of the internet are intensely changing the way companies craft logistics strategies, processes and systems. Thus, companies embracing this new paradigm must be able to pump out millions of dollars of operating costs, achieve better supply chain integration, and increase market power through customer-focused fulfilment.