Each year, the S.F. Roundtable hosts a dinner and panel discussion in Silicon Valley featuring supply-chain visionaries from a variety of industries. Speakers are encouraged to critique the prognostications of their fellow panelists, and the audience is also given a chance to agree or disagree with their views.
Here's what four industry experts had to say about 2017 and beyond:
Prediction: The proposed Trans-Pacific Partnership trade agreement is “dead on arrival,” said Jim Miller, veteran SFRT panelist and currently vice president of worldwide operations with Google. TPP, he noted, has become “a political football” for Republicans and Democrats alike, despite its goal of increasing U.S. influence over Asian affairs. (China, significantly, is not among the signatory countries.) Without the treaty in place, China will become an even more powerful player in the region. “In retrospect,” Miller said, “history is going to judge our exit from TPP as being a very unwise move.”
Response: Not a single dissenting voice from the panel, or in the audience.
Prediction: The Uber model of independent, crowd-sourced transportation will continue to have a “tremendous impact” on the passenger business, said Brian Bowers, vice president and general manager of CRST Dedicated Services. But it will have “a very minimal effect” on the truckload sector. Bowers sees investment in Uber-type technology as making a positive impact on the brokerage world, bringing new efficiencies to how loads are booked. But that benefit won’t extend to traditional truckload. “As an asset owner who invests hundreds of millions of dollars, I don’t want to give up the management of those assets,” he said. The Uber model, he added, would result in the commoditization of truckload service and act as a disincentive to continued investment in equipment and networks.
Response: Panelist Jeff Wuendry, marketing manager with Velodyne LIDAR, a maker of automated navigation and control systems, said Uber-type service already exists in certain limited areas of commercial trucking. Melonee Wise, chief executive officer of Fetch Robotics, noted that Volvo is running live trials in Germany. “It’s been extremely successful,” she said. “Whether Uber is going to do it is a question, but the technology is there, and it’s going to happen.” Also taking issue with Bowers was, not surprisingly, audience member Joe Shone, senior strategy and planning manager with UberFreight. “We’ve seen the pain points and the hassles of moving shipments across country,” he said. “Customers are looking for change.”
Prediction: Don’t expect “stellar growth” in the year ahead, said Wuendry. “We’ve had eight years of economic expansion,” he added, “but it’s inevitable that at some point we’re going to have some kind of a drop.” Wuendry predicted growth in 2017 in the low single digits, a scenario that would amount to an economic downturn.
Response: Disagreement from both Miller and Bowers. Miller said it will take a while for the economy to reverse itself from the recent “bounceback” of the Obama years. He doesn’t believe that growth in the coming year will dip below current levels. Bowers declared himself “mildly optimistic” that businesses next year will experience “steady growth that’s higher than we’ve seen in some time.” Audience members said the economy will continue to benefit from a high level of consumer confidence and pent-up demand for goods. But certain areas of the country, particular rural regions dependent on foundering industries, will continue to suffer. “It’s the best and worst times, based on where you are,” Wuendry replied.
Prediction: Wise said robotics will play a major role in supply-chain automation, impacting technologies such as radio frequency identification, and rendering them mobile. “This will drastically change the way people manage inventory,” she said. Warehouses will be able to undertake inventory counts on a constant basis, even multiple times a day. The concept of “robots as a service” will great aid in the collection of data, affecting manufacturing and logistics within the next two to three years.
Response: Bowers acknowledged the value of the concept, while raising the issue of connectivity with customers’ information systems. The problem, he said, “haunts the supply chain from one end to the other. It’s just a matter of getting through that barrier.” Wise said Fetch is addressing the issue through a partnership with software giant SAP, as well as with systems integrators. She conceded, however, that it will take several years to achieve the necessary scale before the technology can become fully effective. “I think these are surmountable hurdles,” she said.
Prediction: The gap between new supply-chain technology and its day-to-day users will continue to grow, said Bowers. Deployment of such systems “will require sophisticated skills and capabilities from service providers across modes that traditionally have never been able to communicate effectively.” In the trucking sector, high driver turnover and low pay, coupled with shippers’ emphasis on price as the primary factor in choosing carriers, will prove a barrier to long-term investments in systems across the supply chain.
Response: Miller suggested that logistics providers will have no choice but to adapt to the new technology. Historically, he said, those that have failed to do so “just go away.” Audience members said the barrier can be overcome through technology tools that speed up the user’s learning curve and automate data collection for tracking shipments in transit. Replied Bowers: “There’s real work to be done across the supply chain to enhance our ability to adapt. There simply isn’t enough of that going on today.”