When you pick up a piece of produce at the supermarket, have you considered all of the steps it took to get from the farm to your hand? The same goes for the couch you ordered online. How exactly did it get to your doorstep? Through a complex network of logistics providers. From hand-to-hand and truck-to-truck, the items you buy have likely been on an extensive journey, requiring serious manpower, tracking, accountability, and context switching (both physically and in business systems). Upon the start of a new decade, what can transform the lives of these workers and help them avoid tedious, manual days? The answer: logistics automation and integrations.
With more than 20 years of supply-chain experience (most recently at NSD), I have continuously looked for ways to transform the logistics industry using technologies like automation to improve traceability and visibility of freight, as well as how different carriers communicate in the arena of last-mile logistics. I’ve also looked at how blockchain has transformed the supply chain industry and what smaller shipping companies can do to stay competitive with automation.
Areas for Improvement in the Logistics Field
Inconsistent Communication
In order to get the right products to the right places in a timely manner, workers have to physically (with hard labor) and manually collaborate through disparate systems to move shipments. Unfortunately, for the hundreds of companies moving shipments all over the country via less than truckloads (LTL) or full truckloads (FTLs), communication has been complex.
No one communicates in the same manner. You’ve got hundreds, if not thousands, of trucking carriers in the US and most of them don’t speak the same language. It can be quite frustrating.
Lack of Visibility
Being able to trace the movement of freight from origin to final destination is extremely important for logistics companies, especially when problems arise. Imagine having a product leave your warehouse, and somewhere along the line it is lost or damaged, but you have no idea where or when it took place? Being able to trace the paths of different products may seem difficult, but not impossible, as we’ll see from Walmart below.
Expectations Around Speed
Consumers’ expectations of delivery speed has changed dramatically in the past few years. Retailers like Walmart and Amazon are constantly pushing the boundaries of what is possible. On-demand tracking and delivery has become the norm, meaning that smaller logistics companies are pressured to take heed. Due to the lack of resources compared to these larger companies, however, smaller players may seem to be at a disadvantage, but can turn the tide with technologies like automation.
The Golden Ticket: Blockchain?
Walmart x Blockchain
By introducing blockchain concepts into the retail sector, Walmart has attempted to solve the transparency problem around food supply. What they’re hoping to do is maintain complete traceability of food items from the raw source in the ground to the store shelf. What exact path did a crate of lettuce take, for example, to get to a store?
Walmart asked some of their suppliers to join in using blockchain to trace produce all the way back to farms, so if there’s an outbreak or some unfortunate event, they want to be able to trace it back to its origins quickly.
The Good and Bad of Blockchain
From my understanding, the theory behind the blockchain is that nobody owns or controls it. Suppliers can, in theory, look at it and contribute their information to it. It is immutable, or unchangeable, and distributed. One main principle is that there is no single database that Walmart holds – it’s a chain of events, or a public viewpoint on a specific product.
Extrapolating Walmart’s usage, blockchain could provide logistics companies with similar visibility across all product movements, and provide the same level of visibility for every single product that moves in the world. This is a tall order, however, as potentially tens of thousands of companies would need to agree to a standard. A company like Walmart can request suppliers do this on a smaller scale, but to do so at an expanded level would be a bit more complicated, even for Walmart.
In the meantime, smaller companies can keep their edge and move and trace products increasingly faster with APIs and automation.
Staying Competitive With Logistics Automation
Since joining NSD as CIO/CTO in 2017, my team and I have considered using automation for last-mile logistics in several unique ways.
Solving for Visibility
To improve upon shipment visibility, NSD allows their customers to track and trace shipments against an internal system via an integration with our automation platform. We’ve done this by using third-party APIs from our partners to connect them to NSD’s transportation management system, which acts like an ERP (or if the partner doesn’t have an API, they can create one using a HTTP or SDK connector). That way, both NSD and our partners can get insights on the movement of shipments. Additionally, when the status of a shipment changes, NSD can immediately alert the designated party via those API connections.
Solving for Time
By using automation, NSD has also been able to reduce a great deal of manual, repetitive tasks. For example, many logistics carriers we work with have portals available for tracking their cargo, but no API connectivity. With our automation platform, we were able to connect carrier portals to our platform and automatically pull the appropriate tracking information when needed.
Cutting Development Costs and Accelerating Time-to-Market
If you are running the business systems of a logistics company, the real question is: where should you start with automation? What business goal would you like to achieve? Would you like to handle more orders with the same amount or less FTEs? If automation could turn one of those answers into a yes, it could be worth exploring.
Also, you have to consider your development costs. Does implementing and adopting an automation platform cost less than having workers manually complete these processes, which prevents them from doing more value-added tasks?
Looking at both productivity and cost of adopting an automation vendor (and the resources needed to train staff) can factor into what you actually automate. In our case, the use of an automation platform helped to cut down both our development costs and time to market. Very quickly, we were up to speed on how to use the platform and creating automations due to its ease of use with both smart business users and developers. Instead of requiring highly-trained integration specialists, we were able to hire solid business analysts and with the right training, moved ahead pretty quickly with our integrations.
Much of the behind-the-scenes work we were trying to do would’ve involved custom code to get done. But with a low-code automation tool, we were able to test much, much faster and set up the backend monitoring management of our work that would’ve involved custom coding. That was one of the first use cases we tackled once we selected an automation vendor because we had a very clear need and didn’t have another way to solve it.
Overall Logistics Improvements For 2020
At the end of the day, the logistics industry is ripe with opportunities. With the introduction of logistics automations, API developments and possibly blockchain, logistics companies can work to both increase speed and visibility and keep customers happy while also improving communication with partners and user experience (how they communicate). Starting with small use cases like reducing documentation errors with automatic data transfer between apps (either internally or from partner to partner) can amplify the productivity of many logistics processes and improve employee experience. It’s a new decade where the logistics industry can thrive, if given the chance to.
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