Transportation management is undergoing a transformation from analog to digital. What's driving the change, and what kind of innovations are in the offing? Jason Gillespie, director of continuous improvement with DHL Supply Chain, has answers.
SCB: Could you define the word “digitization”? What role is the concept playing in the evolution of transportation management?
Gillespie: Going from analog to digital is the first step in the journey. Then you have digitization, which is more about what you do with all that new digital information. How do you build off that, and get to the use of artificial intelligence?
SCB: I assume that if you haven’t digitized, then technology like robotic process automation isn’t even an option.
Gillespie: Right. Once you've digitized, you can incorporate RPA into your work. I call that low-level or beginner AI, where you start to free up your human resources to do better and smarter things. From there, you go down the path of advanced analytics and machine learning. That’s what I really consider to be digitization.
SCB: But we've had transportation management system (TMS) software for years. Why are we only now talking about going from analog to digital, when in fact that was a digital application?
Gillespie: It's a good question. The challenge has been that there are still other players in the supply chain that aren’t quite there. Companies might still be doing transportation management off of spreadsheets. You’re not all using a common language, and you have functional silos. Now we’re getting better at tearing those silos down. We’re using different visibility tools, moving from electronic data interchange (EDI) to application programming interfaces (APIs), with more real-time information. A lot of it just the complexity of all the players in the supply chain, and everyone's at a different stage in the journey.
SCB: One of the big innovations in the digital age is autonomous vehicles. How advanced are they, and where do they fit in?
Gillespie: We're really excited about where they're at. I don't see this as a five- year, 10-year kind of thing. We're looking at some industry leaders right now who we think are ready to pilot with us. If we can get autonomous movement between the hubs, on the long hauls, I think it's a good fit. But you still have to solve for the final mile, and within cities. That’s good for drivers, who would probably much rather be at home anyway, making local deliveries from the hub.
SCB: What’s your best guess as to when we might start seeing autonomous 18-wheelers on the highway?
Gillespie: They’re [already] out there, although with the driver in the cab, hands near the wheel, feet near the brake and accelerator, but not touching it the entire time.
SCB: What about the potential for public opposition to the technology?
Gillespie: That is a challenge. It’s why we want to take the approach of showing that it's running, and pulling freight today, on interstates. I think we're going to get much more used to it.
SCB: You alluded to the last mile, which is synonymous with the age of e-commerce. How is e-commerce making the whole equation more complex? How is it being handled on that final mile?
Gillespie: The expectations of the customer have significantly shifted. We need to be able to do true exception management, so that we can manage the complexity and need for speed. Customers should be able to book appointments for within an hour. We have to have the enabling technologies to meet that demand.
SCB: What are the challenges for third-party logistics providers getting into the world of e-commerce and the final mile? What additional kind of capabilities do you have to take on?
Gillespie: The challenge for 3PLs is tying all of these different sources of information together. From the time the order is placed, I need to know as a customer when it's going to hit my door, and how it's going to get there.
SCB: Would you as a 3PL need to use your own assets, or simply manage those of others — perhaps in an Uberization-type scenario?
Gillespie: We need visibility in order to manage the complexity. That's where a 3PLs strength is. Within North America, we’re already doing that kind of thing, where we're not asset-heavy. We need to be able to bring it together into a single system, with collaboration across all those moving parts.
SCB: What about the use of drones and robots for final-mile delivery?
Gillespie: It might be another year or two for that. Technology is not the problem. I think it's more about regulation, where the drones are allowed to fly.
SCB: What other types of innovations do you think are in the offing?
Gillespie: We’re on the cusp of AI as a decision maker. You can start to use human language to find out what’s going on with a shipment. That will help us to free up and change the way we attract and retain talent as well. We're already at the point where I have to reconsider a job profile before I can hire someone, because the old supply-chain roles might no longer apply.
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