Digital supply chain transformation – sharing data to unlock the potential in logistics
Sharing data in logistics and transportation should be easier than shipping it.
Shipping goods via multi-modal transport requires the involvement of many parties, and each and every participant in the supply chain either possesses or creates data that can be utilized to increase efficiency in the shipping process. Today, many supply chain participants are indeed exchanging data between each other, albeit only in direct peer-to-peer links with little or no flexibility to share data with multiple actors. This leads to a complex and rigid structure and reinforces a fragmented, low-margin market.
Learning from hands-on experience
There is critical information related to shipments that should be shared at different stages of the supply and logistics chain, including items like present position, contents of boxes and their shipments, register and count, fill rate, vehicle status, and more. Sharing this data increases situational awareness, service quality assurance, the predictability of the arrival of goods and simplifies the handling of shipping documents.
When we looked within our own logistics, we found that to facilitate a single shipment by air, 21 documents must be sent 40 times in 20 different steps. The volume of paper-based shipping documents created each year alone could fill an entire Boeing 747 freighter. Needless to say, this is massively inefficient and creates disadvantages, including increased complexity, proneness for error each time a human interacts with a document, added expenses and outdated systems.
Addressing these issues represents great potential for any company to improve efficiency and accuracy, and contributes to meeting Corporate Sustainability and Responsibility goals of reducing negative impact on the environment.
Digital transformation of the supply chain is needed
As we realize the true Internet of Things (IoT), goods and packaging will already be equipped with sensors and connectivity straight from the factory, primarily to be used for its operation during the whole product lifecycle. This connectivity can of course also be used to collect and share real-time data during its handling in the supply chain. A prerequisite is that a consistent quality of connectivity in all physical environments during the shipment (in factory, on transport vehicles, at transportation hubs, etc) is secured. This will allow trusted parties to collect actionable data and remotely control critical assets. It will also enable deeper, end-to-end transparency, which will allow value chain actors to innovate and adjust business models to become more agile and predictable in the execution of supply chain services and establishment of ecosystems that will allow for new, multi-modal mobility services on a regional, national and international level. Shippers and consignees will benefit from more predictable operations based on accurate information on any deviation from planned arrivals.
Building blocks for a solution ahead
Moving forward, we will see a migration from an environment of informational siloes using legacy technologies to a comprehensive and interactive ecosystem. The emerging “Internet of Logistics” (IoL) will provide a secure, flexible and interoperable data exchange infrastructure to all participants along the supply chain. IoL’s expected impact on improving the supply chain is massive, with the potential to enhance customer experience and innovate business models and processes. IoL overcomes the limitations of traditional supply chain communication systems, for example EDI, and the complexity related to ad-hoc IT system implementations.
To meet the challenges in the creation of IoL – namely trusted data sharing between supply chain stakeholders and the ability to scale globally – there is a critical need for open standards. Through engagements in strong industry forums – like the Digital Cargo Forum (DCF) – core definitions such as a unique identifier for global use, semantics and data linking principles, as well as logistics-specific ontology that should be defined by leveraging transport mode specific data definitions.
A public verifiable ledger for the linked data is also a key component to build the trust dimension crucial for the establishment of data sharing.
To reach this digital remedy, the supply chain industry must achieve buy-in from many different entities, who will each play an important role in the evolving IoL. Supply chain stakeholders must embrace emerging technology and incorporate it into their resources if they wish to remain competitive. Regulators will need to gain a thorough understanding of how these technologies will benefit their sector, and implement a global standard to make sure that all parties are communicating in the same digital language. Finally, communication service providers will need to stay their course, prepare and scale their connectivity management services, and define their role in data management services to support the continually increasing amount of data they will be counted on to shepherd, to make this all a reality.
In order to facilitate multi-modal transport, the Digital Cargo Forum has been created as an independent interest group with the purpose to provide the cargo industry with a structure and framework whereby supply chain participants collaborate and co-develop digital projects for improved visibility, transparency and efficiency in the industry. Other initiatives such as the European Commission´s Digital Transport and Logistics Forum (DTLF) will also be key to this digital transformation.