In the world of supply chain management, evolution is constant. What were once novel ideas and technologies are now integral to how we operate. The current innovations in logistics technology and strategy are destined to become the future standard practices. Here, we explore some of these developments.
- Enhancing Efficiency and Reducing Waste Some significant changes are focused on optimizing transportation assets to minimize waste in the supply chain. When trucks travel empty miles, drivers wait for loads, or vehicles navigate through congested urban traffic, underused assets contribute to supply chain inefficiency.
This waste negatively impacts the bottom line of businesses. To address this, certain paradigm shifts aim to make better use of transportation assets. For example, Class I railroad Kansas City Southern (KCS) envisions the use of self-driving trucks forming platoons to transport intermodal containers from rail terminals to distribution centers or industrial parks. In this setup, autonomous trucks would follow a human-driven lead truck, allowing one driver to manage multiple loads. This approach increases efficiency, reduces the need for drivers, and optimizes the underutilized highway capacity during late-night hours.
However, maintaining a human driver is essential for managing liability and ensuring shipment security. This strategy becomes feasible with the introduction of precision scheduling, improving on-time performance for trains and making overnight platooning a reality. This innovation has the potential to alleviate traffic congestion during peak hours, reduce transportation costs, and expedite container deliveries, making intermodal transportation more appealing to shippers.
- Smart Drayage for International Shipments For international shipments, the challenge often lies in coordinating container pickups at ports. Traditional processes involve manual labor and multiple visits to a port’s website to determine container readiness. This lack of visibility leads to extended waiting times for drayage drivers and additional costs.
A solution called Smart Drayage is changing this paradigm by centralizing and automating the container pickup process. Under this model, companies tender their shipments to a service provider, which dispatches carriers to the port. Upon arrival, drivers no longer specify a particular container; instead, they announce their intention to pick up any available container within a group.
By integrating with the terminal’s logistics technology, the Smart Drayage platform identifies containers ready for pickup and their locations, improving efficiency and reducing driver wait times. This approach benefits consignees, as they receive their shipments faster, and shippers, who are less likely to incur storage charges. Additionally, Loadsmart, the provider of Smart Drayage, has established a dedicated gate at the terminal to expedite the process and allow truckers to complete more runs in a day. Integration with electronic logging devices enhances visibility for shippers regarding container status.
- Sustainable Supply Chains An evolving trend in business involves a shift from profit-maximization to a commitment to environmental sustainability. Many corporations are adopting a more holistic approach to business, focusing on employee well-being, customer value, ethical supplier relationships, and community support.
This shift is driven by the recognition that delivering value to customers now includes a commitment to protect the environment. A global survey reveals that 81% of respondents feel strongly that companies should contribute to environmental improvement. As a result, companies are setting sustainability goals and measuring their progress against these objectives.
Sustainability initiatives in supply chains encompass a range of strategies, from optimizing freight routes to reduce empty miles, matching production with demand to minimize excess inventory, and using smaller packaging for products. Longer-term plans may involve redesigning product containers to maximize transportation efficiency and reduce environmental impact.
By integrating sustainability into their supply chain strategies, companies not only enhance their environmental responsibility but also achieve other business objectives. For instance, Procter & Gamble (P&G) has introduced a product line called DS3, which minimizes water in its products, reducing both the carbon and water footprints. This approach benefits the environment and reduces transportation costs by decreasing the number of trucks required.
In addition, supply chain planning software is evolving to include carbon footprint optimization, allowing companies to explicitly model and measure their environmental impact. By adopting sustainability as a core component of their supply chain strategies, businesses are poised to thrive in an era where environmental responsibility is paramount.
- Digital Transformation in Supply Chain The integration of advanced digital technologies is driving significant changes in the supply chain industry. Innovations such as artificial intelligence (AI), data analytics, the Internet of Things (IoT), and blockchain are enabling companies to gain insights that were previously inaccessible. They are also fostering collaboration on a scale not previously possible.
One notable example is Walmart Canada’s use of blockchain to collaborate with 70 trucking carriers. Aera Technology utilizes AI to automate manual processes and enhance supply chain decision-making. Drawing data from various systems, Aera’s solution can prioritize order fulfillment based on a multitude of factors, including profitability, inventory, service levels, and penalties.
A key advantage of digital transformation is the ability to respond to exceptions and foresee potential problems by analyzing a wide array of data points. This approach helps companies make informed decisions that consider current and future conditions.
AI and other technologies also play a vital role in supplier management. LiveSource employs AI to analyze thousands of transactions with contract manufacturers, identifying patterns that may indicate problems or irregularities. IoT devices provide additional data sources for making informed decisions, helping manufacturers optimize efficiency and reduce waste.
- Collaborative Platforms with Advanced Technologies IBM Sterling Supply Chain Suite is a solution that leverages AI, blockchain, and IoT to facilitate collaboration among trading partners. The platform offers a unique vantage point into operations that was previously unattainable without digitization.
AI capabilities within the Sterling suite help manufacturers maintain a balance between demand and supply by detecting anomalies and predicting their impact on production and order fulfillment. Blockchain technology creates a shared data ledger accessible to various supply chain participants, providing transparency and real-time information about cargo location and condition. This shared information allows for quicker identification of exceptions, facilitating proactive decision-making.
While these innovations currently represent the cutting edge of supply chain practice, they are likely to become standard in the coming years. The adoption of advanced digital technologies promises to revolutionize supply chain operations, making them more efficient, sustainable, and responsive to changing conditions.
- Uber-Like Platforms for Freight Imagine a future where finding a trucker to transport your freight is as easy as hailing a ride share. Uber, known for its ride-hailing services, launched Uber Freight in 2017, creating an automated online marketplace for truck freight. This platform simplifies the process of finding and booking available carriers at real-time prices.
Similar services, such as Convoy and Loadsmart, are competing in this space. Loadsmart offers shippers access to full truckload capacity and integrates its listings into shippers’ transportation management systems. This streamlines the booking process, allowing shippers to select carriers based on specific criteria.
Transfix, on the other hand, combines the flexibility of on-demand capacity with the stability of long-term contracts. Their technology uses pricing algorithms to ensure that contract rates remain competitive and mutually beneficial for both carriers and shippers.
As supply chain technology continues to evolve, these collaborative platforms aim to simplify the process of securing transportation services and optimizing freight management.
Stay current with supply chain report news at The Supply Chain Report. For international trade tools, see ADAMftd.com.
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