Digital Trnsformation of the Supply Chain
Businesses have many opportunities to automate and digitally enhance their supply chain processes using emerging technologies. Already we have seen costs reduced and revenues increased through automation in warehouses, factories and deliveries. Much of the supply chain can and will be automated by people that know the business and understand technology.
As automation increases there will be tough decisions concerning jobs and employees. There will also be jobs lost. As of 2018 the human element accounts for 30% of costs.
The global supply chain is critical to life and the economy. We are all reliant on the supply chain in some manner either as consumers or as part of a supply chain business.
The food we eat and the products we use are all dependent on supply chains. When supply chains work as they should they are a wonderful thing, but sometimes they do not and it can cause grief. The supply chain is prime for a digital transformation and it has already begun.
Delivery time expectations are compressing more every week. For example, over 100 million people subscribe to Amazon Prime. Same-day delivery is expanding and will be the expectation in many cities. Amazon Dash Buttons make it easy to press a button and your product is queued for delivery. Amazon is also building their last mile delivery network with a fleet of independently owned Amazon delivery vans. If you are not keeping up, you are ‘prime’ for disruption.
Being a technologist who works closely with the supply chain affords me the opportunity to see large scale computer
– machine – human integration. There is so much low hanging opportunity for digital products and services.
Vetting suppliers is important to insure they are providing authentic products. Blockchain is already making headway into authenticating products. I described current and future use cases in other posts on UltimateBusinessContinuity.com, ‘Blockchain – Transforming an Ancient Concept’.
Insuring supplier redundancy is another critical opportunity if you own a manufacturing or logistics company. The threat imposed by single points of failure must be eliminated or at least you must understand the risk. Many large companies have been impacted or put out of business by not planning ahead to reduce risks due to single points of failure. The Fukushima tsunami and subsequent reactor meltdown was one such event that impacted companies large and small. Major recent hurricanes such as Sandy, Maria and Irma put many companies out of business.
I suggest you map your supply chain from supplier to customer. Insure redundancy throughout and find ways to improve. Business Continuity Management and Asset Management software can automate much of the process. You want to understand all your assets and possibly threats that can take you down. Doing a Business Impact Analysis is critical to understand risk and opportunity. Failing to plan is planning to fail. If you are concerned about risk and business continuity I go into them in great depth, in other posts on Ultimate Business Continuity Success Guide. More information is on UltimateBusinessContinuity.com and Amazon.com.
JDA (https://jda.com) has been a leader in sophisticated supply chain software for a long time. Great software is critical, as customer demands can change in an instant due to trends, global events, weather, moves by the competition and more. These are the things you need in to consider. Remember, you can never get blindsided.
I like the way JDA has stayed on the cutting edge with their new Luminate product, rather than sitting back, being too comfortable and getting disrupted. Luminate runs on a cognitive, connected and open platform. It is a next- generation digital solution that can turn real-time data and insights into fast, profitable business decisions, which is exactly what we have been discussing on UltimateBusinessContinuity.com. It leverages AI, big data, advanced analytics and IoT devices. It can even take input from drones and other mobile vehicles. All of this leads to smarter, more agile supply chain transformations for greater results. They have a cool video on their site which shows some of the edge technologies they leverage.
Warehouses and Factories
I see automated warehouses and factories as magnificent examples of integration and innovation of software and connected hardware.
Before I became a director with a leading logistic company, I was a senior technology officer with a top ten global financial company. I came to the logistics industry with the preconceived notion that their software would be elementary and perhaps written in decades old Cobol, Fortran or BASIC 1.0. Wow, was I ever wrong!
Imagine the coordination it takes to inventory and then deliver millions of products a day. Imagine robotic machines that can automatically pick-and-pack products in warehouse racks six stories high. Imagine miles of fast moving conveyor lines converging in one stream with an endless number of products a mere inch or two apart. Imagine the sophistication of routing all these products to the proper trucks across scores of loading docks and finally reaching the destination of the customer in a timeframe that delights them. You cannot do that manually and part of my job it is to insure technology is always available and revenue keeps flowing.
As we discuss in the post, ‘Robots and Drones – Creating Extraordinary Mobile Opportunities’, Amazon uses thousands of little orange robots that scoot around their cavernous warehouses picking the right products from tens of millions of SKU’s. The robots then bring back a basket of products to a human who puts them in a box and prepares the order for shipping. All that automation saves a great deal of time and money and generates loads of customer happiness!
Servus (https://www.servus.info/en/) offers an amazing high- rise optimum flow process case picker using very cool autonomous transport robots that ride elevated rails. The system has a capacity to pick thousands of products each shift and deliver them to conveyors that lead to delivery vehicles, all without any human effort.
Servus provides short feedback loops and fast error detection resulting in improved quality for processes. As a technologist, I find watching this type of device is even better than visiting Disney World. Servus has a 2-minute video at
https://youtu.be/sAffLJfccmU or from their web site. If you do not think this device is cool, I would be shocked.
RFID (radio frequency identification) is a popular way to track, inventory and locate products of all kinds. I have experimented with both active and passive RFID sensors. The active ones emit a signal indicating where the object wearing the RFID tag is located. The passive RFID tags are tracked from central locations that bounce signals off the RFID sensors.
Depending on your use case, either or both can be good solutions for tracking products through the supply chain. Active RFID used to be too expensive for many scenarios, but as with all technology, the cost has dropped dramatically and the places it can be used has skyrocketed.
RFID guns are typically used to scan incoming and outgoing product in a warehouse. The guns may have some competition coming from products such as ProGlove (proglove.de).
ProGlove is an IoT device that has RFID capability attached to the back of a work glove. Benefits include productivity, worker satisfaction and improvement of ergonomics. The glove can help you save time on each pick. Any time you can cut seconds off a process that is repeated many thousands of times there can be significant ROI and possibly disruptive opportunities. The glove allows the wearer to have both hands free to pick, pack or do other tasks rather than having to dedicate a hand to holding an RFID glove.
I discovered ProGlove at techDayNY, a huge technology show that has launched numerous digital giants. Shows are a great way to discover cool new products. ProGlove has found success in Europe and in 2018 began offering product in the United States and Canada. Companies in Europe, such as John Deere and Lufthansa are already benefiting from ProGlove. Their web site has many such success stories and metrics.
In addition to RFID, in the post, ‘Internet of Everything’, we also discussed many different types of sensors that can provide significant return on investment in factories and warehouses. Sensors costing only a few cents
integrated with IoT devices can provide you with information on heat, humidity, flooding, etc. These events unchecked, can cost companies hundreds of thousands of dollars during even one large scale event.
Better, Smarter and Faster Delivery
We all want to get our ‘stuff’ faster and cheaper. Autonomous delivery by ship, truck and drone is becoming a reality and soon will be common-place. Plus, instant delivery using 3D printing technology may eliminate the need to send certain physical products at all. A 3D printer digital plan could be sent to the customer and they can print out the product.
Maritime Shipping and Commercial Trucking are core to moving product through the supply chain. Whether it is crossing oceans or lakes, picking up product at ports or rail yards or delivering it to ware-houses or customers, safely and efficiently moving product is important.
KONGSBERG (https://www.km.kongsberg.com) is developing autonomous / unmanned / self-driving ship control systems using integrated sensor technology and automated collision avoidance. They hold the world’s first contracts for commercial delivery of autonomous vessels.
One of their many autonomous ship projects is YARA Birkeland which they envision as the world’s first fully electric and autonomous container ship, with zero emissions. KONGSBERG is responsible for all key enabling technologies including the sensors and integration required for remote and autonomous operations, in addition to the electric drive, battery and propulsion control systems.
YARA Birkeland will initially operate as a manned vessel, moving to remote operation in 2019 and is expected to be able to perform fully autonomous operations in 2020. There is a cool animated video of the ship in action on the KONGSBERG web site.
Oskar Levander, Rolls Royce SVP said on CNBC in April 2018 that autonomous shipping will reduce costs and improve safety. As with cars and trucks, most maritime accidents occur due to human error or fatigue. Autonomous boats and ships will be able to be built lighter and simpler. In
November 2017 Rolls Royce unveiled their Crystal Blue luxury yacht with advanced digital technology and hybrid propulsion. In 2020 we will see small autonomous commercial vessels such as tugboats. Eventually, large cargo ships will be self-sailing.
Do not be surprised if you see a self-driving truck on the highway in the next couple of years. In October 2016, Anheuser Busch delivered 50,000 cans of Budweiser with an autonomous semi-tractor trailer from Uber. The truck did all the highway driving and the driver just hopped in the driver seat for the last miles through the city. Police officers that saw it on the highway said that it was driving better than most trucks they see.
Waymo, Tesla and Uber are making strides toward getting autonomous trucks in production. They all have test vehicles on the road. Not only will this make delivery more efficient and less costly, but it will save thousands of lives. Approximately 4,000 people a year die from their vehicles being hit from behind by a truck due to human error.
Amazon is close to being able to deliver packages to your car’s trunk. They are also exploring building their own delivery service using cars, trucks and drones (more info below) as well as leveraging assets such as their Whole Foods locations and University drop off sites.
Using AI, big data and predictive analytics retailers will be able to load products on delivery vehicles before you even order them. The retailer will examine patterns, find trends, mix it with environmental data streams and determine the likelihood you will be placing an order. That can compress delivery time to minutes! Sure, in the beginning they may needlessly load product on their vehicle, but over time the algorithms will get better, as they always do, and the accuracy and service will provide amazing delight.
You will also be able to issue one-time electronic keys to delivery people so they can drop off packages in your house, rather than leaving them outside where there is a risk they can be stolen or damaged during inclement weather. You will be able to monitor their movement through a Ring type camera device.
Self-Driving Trucks meet Life-Saving Electronic Log Devices
For many years, most professional truck drivers recorded their hours of service (HOS) in paper logbooks. These proved cumbersome, prone to error and open to possible falsification on the number of hours driven in a day. Drivers working 20-30+ straight hours led to safety issues due to fatigue and human error.
Commercial trucking fleets in the United States were mandated to have electronic log devices (ELD’s) installed by December 17, 2017. These devices accurately capture driver hours with the goals of improving safety and reducing fatigue caused accidents. ELD’s track a driver’s hours of service electronically by integrating with the truck engine.
The HOS regulation limits truckers to driving no more than 11 hours a day within a 14-hour workday. Drivers must then be off duty for 10 consecutive hours. In Canada, truckers cannot drive more than 13 hours a day within a 16-hour workday. Drivers must then be off duty for eight consecutive hours.
To meet the demands of the new regulations, powerful digital solutions are available. For example, EROAD (http://www.eroad.com) offers many sophisticated hardware / software products for commercial truckers that cover ELD and tax compliance, safety and fleet management.
Their EROAD ELD is a user-friendly in-vehicle device that features an intuitive touchscreen and synchronizes with the engine to automatically record hours of service. They package their service with EROAD’s secure web-based portal, which provides tracking, real-time notifications and reports.
When self-driving trucks are available, they may extend the miles traveled during a work-shift and still comply with regulations. Potentially the truck can partner with a human driver, as in the case of the Anheuser Busch delivery I described earlier. The truck can do the highway driving and the driver can do the ‘last mile’ and city driving. When not driving, the human driver could sleep. The total hours driven by the driver will be greatly reduced but the possible total mileage will increase due to automation. We shall see if that becomes a reality.
Autonomous or semi-autonomous trucks can also help when the human driver is behind the wheel. Technology can provide them with safety and efficiency information, much the way an airline pilot and aircraft partner.
For example, telematic systems, which monitors driver’s skills and habits, as well as engine performance, are already a core technology used by commercial fleets. Telematic systems can produce data that will improve mileage, lower emissions, lower fuel costs, reduce vehicle wear-and-tear and most important, improve safety.
Element Fleet (https://www.elementfleet.com) and Geotab (https://www.geotab.com) are two companies with interesting telematic solutions.
Eventually, fully self-driving trucks will drive entire routes from beginning to end. There will still be the challenge of unloading trucks at delivery points along the routes but that can be done with a lower wage person and eventually a robot will do the work. Unfortunately, drivers will lose jobs. As of 2018 one of the biggest expenses for logistic companies is driver salaries. Hopefully, drivers can be retrained for other positions.
Commercial trucking can also benefit from situational awareness tools such as RiskPulse (RiskPulse.com) to monitor weather, traffic and road conditions. I use many situational awareness products for various use cases. One of the many strengths of RiskPulse is providing weather insight for logistic companies.
Using RiskPulse, you can map weather events to your delivery routes on a map. The cherry on the cupcake is mixing geo-coded latitude and longitude coordinates sent from your trucks into the soup and you can monitor their position in real-time as they enter and exit areas of risk. This insight can increase safety for the driver and the product, while reducing delivery delays and providing the customer with accurate delivery time-frames.
PwC estimated the global market for commercial applications of drone technology will be valued at over $127 billion by 2020. There will be thousands of business opportunities and jobs created by this industry.
Drones already deliver crisis supplies and medication to areas impacted by disaster events. They will soon become important parts of the commercial supply chain. Proper safety regulations will be enacted and we will benefit from fast and safe drone deliveries.
As early as 2016, during a three-month trial run, DHL integrated their Parcelcopter (https://www.dpdhl.com/en/search.html?q=parcelcopter) into their delivery chain. It was a signal of things to come. People in the Bavarian community Reit am Winkl could use the automated service to send and receive packages. A total of 130 shipments were sent over eight kilometers – a trip that would take 30 minutes by car, but took the Parcelcopter only eight minutes. It was a resounding success!
Flirtey (flirtey.com) is carving out a niche in drone delivery. In 2016 they partnered with 7-11 and delivered food and a Slurpee to a resident in Reno Nevada. Flirtey has more recently announced a partnership to launch the first automated external defibrillator (AED) drone delivery service in the U.S.
In New Zealand, a man flew his drone to a driver pickup window with an order attached and flew the food back to a park as a surprise for his girlfriend. This was a controlled experiment in coordination with KFC staff. This is not something you should try.
UberEats (https://www.ubereats.com/en-US/) announced in May 2018 that they want to deliver really fast food – delivered by drone in 5 – 30 minutes. At the Uber Elevate Summit, Uber CEO Dara Khosrowshahi said, “Uber can’t just be about cars, it has to be about mobility. It’s my personal belief that a key to solving urban mobility is flying burgers, in any city. We need flying burgers.”
Finally, to continue the fast food theme, in the opening scene of the blockbuster movie ‘Ready Player One’ a real drone delivered a Pizza Hut pizza to a resident in the ‘stacks’ in 2045. For many theater goers, it might not have been exciting, but for one digital technologist / futurist… I wanted to rewind that scene over and over!
Paul Misener, Vice President for Global Public Policy for Amazon.com appeared before a congressional hearing in June 2015 as part of his insights he shared, “Amazon Prime Air is a future service that will deliver packages of up to five pounds to customers in 30 minutes or less using small drones, also known as “unmanned aircraft systems” or “UAS.”Flying beyond line of sight under 500 feet, and generally above 200 feet except for takeoff and landing, and weighing less than 55 pounds, Prime Air small UAS vehicles will take advantage of sophisticated “sense and avoid” technology, as well as a high degree of automation, to safely operate at distances of 10 miles or more, well beyond visual line of sight.
Not only do we think our customers will love this service, we believe it will benefit society more broadly. Once operational, Prime Air will increase the overall safety and efficiency of the current ground transportation system, by allowing people to skip the quick trip to the store or by reducing package deliveries by truck or car. For the same reasons, Prime Air will reduce buyers’ environmental footprint: If a consumer wants a small item quickly, instead of driving to go shopping or causing delivery automobiles to come to her home or office, a small, electrically powered UAS vehicle will make the trip faster and more efficiently and cleanly.”