Logistics Sector Face the Brunt of Pandemic Amid Digitization Blips

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  • The COVID-19 pandemic has dealt a massive blow to the global economy.
  • On the supply side, factories and businesses have been forced to close temporarily due to the shortage of input materials from suppliers and the need to protect workers.
  • Demand is declining, too, as consumers stay home and face the prospect of a large-scale economic downturn.
  • Keeping everything as connected as possible, and keeping supply chains open to maintain those connections has become the primary challenge.

Will the transport and logistics sector be resilient following the coronavirus pandemic, reviews an article in Forbes.

Massive blow to the global economy

COVID-19 has dealt the whole of global society a punishing blow, but if there’s one industry that’s always been tasked with uniting that society, it’s transport and logistics.

It’s an industry that’s had to rise to the challenge of the pandemic, redoubling its efforts in connecting goods with people like never before, fighting hard against the distances that have held communities apart. Keeping everything as connected as possible, and keeping supply chains open to maintain those connections, has been the primary challenge.

Stake in supply chains

As the world begins to return to something resembling normal, it’s become apparent that the logistics industry as a whole may have been missing an opportunity—since even before COVID-19—to own a much greater stake in its own supply chains.

While the logistics industry is of course more than familiar with using data—even to the extent of regularly utilizing AI and machine learning—to bolster the work of its people, that’s barely scratching the surface of the possible.

So far, logistics firms have mostly been using data to build forecasting models and event management algorithms that work absolutely fine; they’re built on the data of things that happened in years gone by, and can fairly accurately figure out what’s going to happen next.

Data and digitization

As one report recently noted, “COVID-19’s impact revealed that supply chain business continuity plans had both the wrong data and the data wrong.”

The piece also notes that digitalization—being the introduction of more and “better” technology to a business—hadn’t been the enabler that had been expected. Because data and technology, it turns out, are different.

Paying lip service to data strategy as part of a standard “digital transformation” may be enough to offer a quick boost to a business that’s functioning fine, in a functioning world. But with Covid-19, that world ceased to function.

Everybody got through the worst of it in the end, but what can be learned?

The simple answer is that the entire concept of data—its meaning, its value and the way the industry approaches working with it—needs to be decoupled from the tradition of “technology.”

If a logistics company’s entire structure and outlook could be reset to zero, and every single movement built exclusively around the notion of data, what would that look like?

It would perhaps be something like a brain, driving an elaborate, fully sensitive central nervous system.

A seemingly imperceptible sensation or change would cause ripple effects through the whole, adjusting the way it thinks and reacts, in real time. Even an imperceptible event would contribute to a slight alteration of the whole outlook.

If the future of logistics supply chains is data-led, it’s pertinent to ask when a data-led company that thrives on next-day delivery may start trading up trucks and planes for cargo ships.

As well as seeing the logistics industry tighten up its existing game, the COVID-19 epidemic has seen online retail giants delivering many of their own packages, with an expectation this will continue to grow.

Logistic sector booming?

Big Tech is getting a feel for logistics, and the most prominent are already knocking on the doors of traditional shipping and logistics organizations—owing in no small part to dissatisfaction with the efficiency of using third-party logistics services.

Fully modernizing logistics with a data-led approach looks like less of an if and more the inevitable when.

It’s not difficult to see the appeal in such a model. It would mean scrutiny magnified down to the level of each individual item in a transport crate—the current situation of every single palette or object in a container to be trackable and visible.

For example, when a cargo ship leaves China, the haulage company waiting for it in Genoa will know the condition of every item they need to collect and the precise moment they will arrive—meaning they can send the right trucks at the right time. The eventual recipient of that cargo would know exactly what’s coming and when.

The original supplier in China would know, too, and be ready to react to any individual customer needs in real time. With data from the logistics firm, the supplier and the haulage company all working in tandem, every base is covered, and then some.

Covering the blip

A tiny change such as a small tropical storm kicking up an hour earlier than expected would no longer be a minor disaster for the delivery journey but an opportunity for hundreds of millions of new possibilities to react, plotting new courses and altering the flow of goods across the globe to cover the blip.

The result would be a logistics company suddenly able to control its own destiny—keeping the supply chain open because, quite simply, it would spin the web of data that fueled that supply chain. With full transparency and visibility of everything in it.

It would see the logistics industry move from simply shifting boxes round the world to fully-orchestrating the supply chain.

But how can the industry reach that goal? And as quickly as it needs to, while coping with a world that can change instantly, not to mention warding off challenger tech companies that are seeking to do the same?

With around 6% of GDP and around $5.1 trillion a year of revenue already lying in logistics, the race is on to define the future of the entire industry, as every supplier scrambles into action to find the way forward. As we’ve already learned, that’s not in “digitalizing”; it’s in data.

From the two-sided approach of app-based technology such as ride-hailing apps, which simply connect customer to service in a linear fashion through the benefit of mapping and payment APIs, to the multi-sided style of software innovators, information-led ecosystems, there’s one approach a successful business harnesses when building an environment to bring data and results closer together: platform thinking.

Data-led challenges

Teradata, for over 40 years, has looked at the world’s big challenges in data-led terms, and that’s resulted in us moving businesses—and entire industries—toward an existence punctuated by data. Free-flowing, fully-orchestrated and formed quite literally of and around its users.

That’s platform thinking: building a system in which the users themselves—be they customers or employees—create value, inherently, by being a part of it. Adding data to the ecosystem and benefitting from that data as it comes back around.

It’s about democratizing data—taking it out of the hands of siloed IT functions or business analysts and putting it in the hands of each and every person who needs it along the logistics journey. Then connecting it all up, so each tiny addition feeds and guides the rest.

Uncertainty is certain

While Big Tech companies took decades to gather the data to become a powerhouse, a logistics company could scale rapidly through 2PL, 3PL, 4PL and 5PL, shifting from ocean to globe with the data it already possesses and adds to every second.

The technology angle is still obviously important, but as a company digitalizes and replaces legacy architecture with hybrid or multi-cloud services, a dedicated data platform exists as a separate technology entity.

To give a few examples, end-to-end visibility through an infinity loop of data creates a solid foundation for high quality BI reporting and advanced analytics, in the hands of anybody—employee, partner or customer—who needs to see it.

For everyone in the supply chain, this means a slicker way of doing business, minimizing wasted resources and maximizing the use of time and talent. With free-flowing data across a shared ecosystem, human beings can turn their hand to business development and R&D projects, as traditionally siloed and decoupled working practices begin to be automated.

Processes, products and services can be streamlined as simplified, optimized and standardized functions become the norm.

A single data source for an entire global logistics network will become the backbone of the logistics operation, from which a literally infinite number of insights can be drawn and turned into actionable opportunities on a scalable platform.

The future of logistics, then, is a true ocean-to-globe expansion for the industry—a simultaneously horizontal and vertical scale-up of tailored customer experience, flexible supply chain orchestration and hyper-resilience to keep pace with a rapidly-changing world.

But will that pace be met by a logistics company embracing data to solidify its position or a data company trying its hand at logistics and dominating yet another industry?

Only the logistics industry can decide, but the clock is ticking.

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Source: Forbes