As pandemic-hit international supply chains look to get back on their feet, executives face tough choices. Do they move production closer to markets and abandon cherished ‘just-in-time’ production methods? Do they take on additional stock?
There’s plenty for supply chain managers to mull over as they look to bolster resilience to future shocks. But that’s not all that needs their attention. The disruption caused by COVID-19 has further exposed another source of fragility in our logistics networks: the lack of true visibility. Now the race is on to change that.
Visibility is table stakes in the supply chain business. Yet recent months have offered a stark reminder of how many operators still struggle to track and trace goods as they wind their way from point of origin to warehouse to customer.
Lacking line of sight to in-transit goods in normal times is problematic, but it becomes a major vulnerability when you’re suddenly having to source from new geographies, switch from air to sea transportation, and account for longer customs inspections. With legacy systems and manual checkpoints still widely in use, many logistics managers are hampered by low-resolution, error-prone data. They can plan schedules, but they have little faith in what they see on their dashboard.
Seeing is only part of the challenge. Building true visibility is not just about strapping a tracker to a pallet, then knowing with confidence when it will arrive at its destination. The world is complex, dynamic and unpredictable. Traffic accidents, schedule changes and poor weather can easily knock a plan off course — especially in a supply chain with many links and employing multiple modes of transportation. Not being able to re-plan capacity before problems materialize can cost firms dearly in the form of penalties for missed shipment deadlines, unnecessary wait times at docking points, and empty truck miles.
If that sounds like your supply chain, you’re not alone. According to recent research from Gartner, it won’t be until 2023 before at least half of all global leading enterprises have real-time transportation visibility solutions. That said, recent experience is likely pushing many to step up their efforts to address technology gaps.
Exposing the ‘Ground Truth’
Newly-available location data and algorithms offer one way to do that — injecting some much-needed reliability into ETAs without breaking the bank. Available as APIs, they help expose the ‘ground truth’ — that is, the reality of conditions across the transportation network based on information such as live road incidents, anticipated hazards and contextually-aware routing.
They also help businesses better estimate journeys that take in multiple modes of transport, which is the case for the vast majority of goods. Using that insight, adaptive supply chain applications can proactively adjust to their spatial environment. When something’s amiss, real-time alerts are triggered and routes automatically recalculated.
The potential pay-off can be considerable — bringing better routing, multi-modal visibility and auditable traceability, all of which add up to material savings and happier customers.
The Science Behind ETAs
Today, organizations shopping for location capabilities to enrich an ERP tool or traffic management system (TMS) have plenty of choice. They also stand to benefit from recent advances in the location intelligence that goes into enabling real-time ETA calculations.
For one, the underlying mapping is much better. New maps incorporate rich topology and road configurations accurate to lane level — useful for commercial vehicles like trucks. They increasingly extend into indoor environments too, bringing factories, yards and airports into the picture. And wherever there are gaps, new tools allow companies to rapidly build out their own maps of private facilities.
Secondly, there’s a lot more data feeding into routing algorithms. Machine learning now plays an important role in predicting ETAs, with millions of real journeys every month used as training data. Routing engines uncover macro historical and seasonal patterns as well as learn the little things, such as how long it typically takes to make a left turn at any given junction. A few extra seconds here and there can add up to minutes and hours over long journeys.
Thirdly, the location data — and accompanying tools and services — required for producing better ETAs are now much easier to get hold of. A lot of useful data tends to be trapped in different silos and once you’ve succeeded in prising it out you inevitably find varying levels of quality, spatial representations and freshness. Wrangling that data is a headache and a time sink.
Some data providers have realized this and sought to make useful data streams more readily available to enterprises that need them. This was one of the reasons why we created a location data and services marketplace. We saw that companies need access to normalized, anonymized and ready-to-use data streams from roads, vehicles and weather systems. A marketplace makes it easier for logistics software developers to source and subscribe to data from other providers via a single integration point.
Businesses can also use the marketplace to form data pools and co-ops with their partners up and down the chain. Even small networks may require multiple participants to share data with one another, especially where multiple modes of transport are employed. Now, they can collaborate and share data with others in a controlled environment. And when there is a rupture in the chain — say, a port or border closure — information can be quickly shared up and down the chain.
Especially in the current climate, the need for true visibility is imperative, and some operators would do well to look at how newly-available location data and technology can give them an injection of efficiency with low upfront costs and quick time to value.
Sanjiv Ghate is vice president of marketplace at Here Technologies, a location data and technology platform.
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