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As a “Chief” of some facet of your enterprise, itis very likely you have been exposed to whatmay seem like hyperbolic adjectives such as“transformative”, “revolutionary”, “disruptive”,“game-changing”, “explosive” applied toInternet of Things (IoT), Predictive Analytics, ArtificialIntelligence (AI), big data and other new technologies. The factis significant change IS happening in supply chain operations.Baby-boomer, GenX and Millennial generational leaders arelearning, creating, adopting, adapting and driving exponentialchange. There is first-mover advantage in this cycle of change,but rest assured you are not too late. Yet, you must start now, getup to speed quickly and keep moving.
Supply Chain Technologies
Industry 4.0 has been illustrated, by Bill Marr, contributorto Forbes Magazine by explaining “When computers wereintroduced in Industry 3.0, it was disruptive thanks to theaddition of an entirely new technology. Now, and into thefuture as Industry 4.0 unfolds, computers are connected andcommunicate with one another to ultimately make decisionsBy Richard Boulware, Director, Global Logistics, GlobalOPS, International Flavors & Fragrances Incwithout human involvement.” Industry 4.0 also includesthe broad swathof automation and data exchange inmanufacturing technologies. It includes networked data-physical systems, Internet of Things (IoT) devices, cloudcomputing and cognitive computing.
Today’s Impact on Logistics
The surge of disruption events hitting the logistics functionis being driven by desires to use innovation to bypass thetypical ‘continuous improvement” cycles to deliver quantum-leap cost savings solutions. Let’s face it, it is a tough slowroad to revise entrenched, functional silo-based business processes.
If your business includesusing freight forwarders forinternational or domestic shipping for inbound raw materialsor to delivery your company’s products to your businessor consumer customers, you may see logistics as a notparticularly important value-add segment of your supplychain. Understand that this segment for supply chain hasan outsized opportunity for cost savings and risk reductionsbecause of the disproportionately high number of manualprocesses. Email, phone calls and paper documents are stillthe norm and are inherently-plagued by errors and theresulting delays. They all conspire to increase your costs,drive up inventory and displease your end-customers withdelayed shipments.
So, as a C-Suite leader, how do you provide the top-downmandate to deliver costs savings, balance sheet improvementand risk-mitigation via logistics digitalization?IF, as the Chief of all chiefs, you are looking at yourorganization’s alignment with an eye toward your customers,their future product desires, thefuture supply chains to deliverthose desires and your shareholders’ desire for wealth creation.While all of these are unpredictable, you must continuouslyreevaluate your supply chain assets’ ability to deliver thecompany’s long-term strategic ambitions.
You may decide to position your team to lead an Industry4.0 transformation of logistics from within or align your people,processes and systems to ride changes coming from outsidethe scope of your supply chain. Those that do neither willsoon recognize the missed opportunity to wield a competitiveweapon in the fight to realize your strategic ambitions and yieldeconomic sustainability.
Dear Operations and Procurement Chiefs
The Operations and Procurement Chiefs need to recognize thetechnology-leveraging operations logistics manager and bringalongside him a technology-progressive logistics procurementmanager to consider a new approach to developing theircollaborative partnership. Together, they should be challengedto redefine the company’s demand profile for logistics services,determine what entities can deliver the optimal match oflogistics services which strikes the proper balance of costs,breadth of services and reliability for transportation andback-office services. This collaborative team-of-twomustbe supported with autonomy and authority.You and yourplanning, inventory management, quality, human resources andoperations execution heads must give this team your carefulattention to theirplans for leveraging industry 4.0 solutions inLogistics.
Dear Human Resource ChiefThere is a widening and deepening logistics skills gap. Censusfigures tell us we are at the start of declining situation wherewe progressively suffer from the deficiencies of skills in theevolving logistics function. We cannot start too soon to recruitand retain talent in a function with so much potential.
The counter to this dim view of qualified headcount futureis recognition that the digitalization of support functions willresult in headcount reductions for roles related to managinginformation in traditional non-digitalized processes includinghazardous goods declarations, import/export paperwork,procurement and invoicing. Now is the time of opportunity torecognize and rejuvenate those members of your processingstaff that have retraining potential to be transferred intothe fewer, more technology-driven roles where exceptionmanagement, problem-solving, data-analytics skills and an agilemindset will win the day.
Dear Quality Chief
In a recent trial, we attached Intel’s IoT devices toproductsocean-freight shipped and road freight shippedfrom Northeast US into Mexico. I can see an example of thefuture with the Intel®Connected Logistics Platform soaking updata from devices tracking location, temperature, humidity,luminosity, angleand shock at every pallet, drum and cartonacross all manufacturing segments and industries. In the trial,the devices proved to be perfectly capable.Further, it is clearto see how the devices will drive intelligence from informationin a cost-efficient manner, while monetizing and providingopportunity for continuous optimization.In the near term,Chief of Quality, if you could monitor the environment ofevery package through all n-tiers of your supply networktothe customer’s door, will you be the first in your industry todifferentiate your product with verified quality metrics againstyour competitors’ offerings?
Logistics Digitalized Future
Supply Chain leaders, who wish to be looked upon favorablyfor their guidance through this Industry 4.0 digitalization era,must recognize there is little time to contemplate the change.Technology adoption is happening with a scope and pace notseen in any arena of human existence. Logistics professionalsneed to accept a significant change - traditional forwarders,brokers and shipper processes will cease to exist in their currentform. C-suite leadership must ready their workforce to speakthe languages of EDI and APIs and develop collaborative,professional relationships with their data scientist colleagues.Supply chain leaders at all levels must define a structured anddisciplined approach which is aligned with supply chain goals.Today, the digital transformation of the $2 trillion global freightforwarding sector, as well as the even larger $7 trillion globallogistics industry is well underway.It is inevitable that logisticsdigitalization is in your supply chain future, the decision isto let it happen or to make it happen in your enterprise in anorchestrated manner aligned with achieving your supply chain ambitions.
