In early May, I participated in one of the supply chain industry’s premier events, which attracted more than 3,500 logistics professionals. I attend this conference every year, but this time, strolling the exhibition floor and surveying the 110+ technology providers’ latest wares, I was struck by a dichotomy.
On the one hand, technology has undeniably helped the supply chain industry solve a multitude of previously intractable problems, making supply chains significantly less fragile in the process.
On the other hand, the proliferation of so many new supply chain solutions over the past decade or so has further pushed the industry toward siloed ways of thinking and working. If we can break down those silos (spoiler alert: we can!), we will enable huge new leaps in supply chain orchestration and automation, saving time and money and driving greater customer loyalty in the process.
Breaking down those silos was the focus of a panel discussion Rob Haddock and I led at the conference. Rob is Group Director, Planning & Logistics at Coca-Cola North America. He runs a massive logistics operation comprising more than 1 million shipments a year across more than 10,000 lanes, with an average haul of 600 miles or more. Rob has firsthand experience in knocking down supply chain silos to drive better operations. (Disclosure: Rob is a customer of my company, FourKites.)
Here’s his real-world template for going about it.
Step 1: Unlock the full value of your data.
As companies deployed new technology systems and solutions, data wound up getting siloed. Warehouse management systems didn’t share data with the transportation management systems, which in turn didn’t share data with the yard management systems. The YMS didn’t talk to the appointment manager or order manager. And none of them shared data with the legacy ERP system.
That’s why the first order of business is the technical work of making all of your data portable — that is, easily available for use by any system or application. (I quoted PwC in my last piece for Logistics Viewpoints: Data “unencumbered by department silos” is key to generating insights, identifying shocks before they happen, streamlining operations and improving the customer experience.)
This is much easier than it used to be, provided companies take an API-first approach to their data strategies and insist that their technology partners do the same.
Step 2: Identify high-impact use cases.
Many digital transformation projects fail because organizations try to boil the ocean. Rob prioritized his use cases based on what could drive the greatest efficiencies and savings.
Up first, reducing the OTIF fines that retailers levy when shipments arrive late, or with less than the full quantity of goods the retailer ordered. OTIF fines can run into millions of dollars on an annual basis for F&B and CPG companies.
Rob’s second priority: reducing dwell times for the drivers picking up and dropping off those millions of shipments. Getting them in and out of facilities smoothly and on schedule would slash detention fees and give the drivers a much better work experience.
Step 3: Implement a real-time supply chain command center.
Control towers have failed the supply chain industry. They are all trying to boil the ocean and have a dismal track record of driving better outcomes. Similarly, there’s a common misconception in the industry that you can aggregate all of your data in a data lake, apply a visualization layer such as Power BI or Tableau, and presto, all of your problems are solved. While analytics and visualization have their place, they can’t help you execute, in real-time, on a supply chain issue.
The answer is a real-time supply chain command center that provides a single user interface into all of your data and applications, and that can execute actions in every system. Let’s look at how this works with Rob’s use cases.
In the case of OTIF, for the vast majority of shippers and their customers today, the actual quantity of goods shipped is a mystery until the truck shows up at a facility and gets unloaded. Why? Because the transportation system, order system and fulfillment system are disconnected. But if the data is portable, and everything is viewable in the command center, the discrepancy between the order and the actual quantity of goods shipped gets flagged before the truck leaves. Now, the shipper can source additional product from an alternate distribution center and take any other real-time actions necessary to make the delivery — on time, and in full.
When it comes to dwell time at facilities, there are four different systems in play: yard, appointment, transportation and warehouse. If those systems aren’t talking to each other, the driver might arrive on time but wait for hours if the product hasn’t been picked or staged. The command center sees the big picture and connects the dots. If the crew isn’t ready to unload, the appointment can be rescheduled in real time.
Rob rightly emphasized that all of this requires a fair share of organizational alignment and change management around priority use cases and new ways of working together. But it’s worth the effort, as the power of real-time execution — underpinned by real-time visibility data and data from every other key system — represents the next leap forward in proactive supply chain management.
Matt Elenjickal is the Founder and Chief Executive Officer of FourKites. He founded FourKites in 2014 after recognizing pain points in the logistics industry and designing elegant and effective systems to address them. Prior to founding FourKites, Matt spent 7 years in the enterprise software space working for market leaders such as Oracle Corp and i2 Technologies/JDA Software Group. Matt has led high-impact teams that implemented logistics strategies and systems at P&G, Nestle, Kraft, Anheuser-Busch Inbev, Tyco, Argos and Nokia across North America, Western Europe and Latin America. Matt is passionate about logistics and supply chain management and has a keen sense for how technology can disrupt traditional silo-based planning and execution. Matt holds a BS in Mechanical Engineering from College of Engineering, Guindy, an MS in Industrial Engineering and Management Science from Northwestern University, and an MBA from Northwestern’s Kellogg School of Management. He lives in Chicago.