Living in a remote area often means struggling to connect to the internet, with slow speeds, patchy coverage, and costly equipment hindering the online experience. This is the dilemma Starlink, Elon Musk's ambitious satellite internet project, is attempting to address.
Unlike traditional internet providers, which rely on costly hubs (large satellites) that sit far away (in geo orbit) from their signal origin points, Starlink relies on a distributed mesh network of low-flying, interconnected satellites to provide internet access to even the most remote areas of the planet.
What if there was a way to apply these same principles to the supply chain? Imagine a world where the supply chain operates like an interconnected mesh network, with multiple pathways and transportation modes available to dynamically route goods to their destination. This is the world supply chain leaders can inhabit by adopting the principles behind Starlink's success, principles that ultimately provide the flexibility and agility that traditional hub-and-spoke models simply can’t match.
Manage Fluctuations in Supply and Demand
Handling fluctuations in supply and demand can be daunting. Traditional hub-and-spoke models typically route goods through a central hub, which limits a company’s ability to respond flexibly to market changes.
In a distributed mesh network, carriers, shippers or 3PLs can add sortation capacity to the supply chain without having to build big hubs. Instead, they can build small nodes that are strategically placed close to points of origin, and have these nodes connect in a more direct way. By leveraging existing infrastructure close to the point of greatest value creation, carriers can increase efficiency and reduce costs, while also improving delivery times and customer satisfaction.
Mesh networks are inherently resilient and constantly improving. Real-time logistics data allows the system to continually adjust to fluctuations in supply and demand while optimizing complex schedules and routes. Users also benefit from improved transparency across the entire supply chain. As the scales tip toward software engineering and away from brute-force heavy industrial solutions, it’s vital that businesses modernize their supply chain to stay competitive. That simply won’t happen with a legacy hub-and-spoke approach, which relies heavily on industrial engineering instead of software. It’s time to fully embrace the power of distributed supply chains and unlock its revolutionary potential.
Consider, for example, a retailer with surging demand for their products. In a supply chain dominated by hub-and-spoke, the retailer may need to re-contract for the work, with carriers possibly needing new capital-intensive infrastructure to handle the additional volume. In a mesh supply chain, however, the retailer can keep up with surges in demand by adding smaller, lightweight logistics assets that act as new nodes in the network that are within their control. All of these decentralized nodes — micro-fulfillment centers, autonomous trucks, and strategic pockets of otherwise under-utilized warehouse space, for example — allow the retailer to more efficiently move inventory and fulfill orders, all while minimizing transportation and distribution costs.
Or take another example, of a shipper with multiple distribution centers across the country. In a legacy hub-and-spoke model, the shipper may struggle to respond to unexpected delays or transportation issues that arise along a single route, often-times because they don’t have visibility into the issue until after the fact. But in a mesh supply chain, where the shipper has nodes that are part of a network, that same shipper can dynamically reroute shipments to supply that they have complete control over and visibility into — all based on real-time data. That’s because each node is connected to every other node, rather than congested spokes all leading to a single outsourced hub.
In a distributed mesh network like Starlink, if a satellite fails or requires maintenance, the system can route traffic around the point of failure. This resiliency is an inherent part of the mesh network design, while being difficult to achieve in a traditional hub-and-spoke system. The mesh system is also resilient when it comes to volume surges, which can be routed through multiple pathways to the destination.
Just as Starlink's mesh network can reroute data packets based on real-time traffic conditions, a mesh-powered supply chain can optimize the grouping and routing of packages based on real-time logistics data, such as node utilization, weather conditions, and transportation availability. By dynamically adjusting routing and transportation modes, mesh networks can minimize transportation and distribution costs while also reducing waste and improving sustainability.
Mesh networks are feasible due to advancements in computer power and scalability. The process of dynamically rerouting shipments in a mesh network begins with collecting and analyzing real-time logistics data from multiple sources, such as node utilization and efficiency, traffic sensors and GPS tracking data from delivery vehicles. This data gets transmitted to the network's central control system, which uses algorithms to identify the optimal routing and transportation modes based on current conditions. In some cases, the network may also lean on data from IoT sensors, such as temperature or humidity sensors, to ensure that shipments are being transported under the right conditions. Once the optimal routing has been identified, the network's software can automatically reroute shipments to the new transportation channels.
Increased Transparency and Accountability
It is an unfortunate reality that much of the supply chain is siloed, either due to lack of visibility into adjacent activities or an inability to take action on available information. This ultimately contributes to a lack of transparency that in turn leads to delays, inefficiencies, and increased costs for the customer.
But with mesh-powered logistics networks, stakeholders can gain real-time visibility into the movement of goods, providing full end-to-end transparency across the supply chain. More visibility means better coordination with stakeholders to identify bottlenecks and potential delays before they become serious issues.
Ultimately, with real-time logistics data analysis, mesh networks can handle fluctuations in supply and demand, optimize routes, and create transparency and accountability in the supply chain. The potential benefits are immense, including increased efficiency, reduced costs, and improved customer satisfaction. The era of rigid, hub-and-spoke supply chain models will make way for a new way of working. Those who embrace the innovative principles of mesh networks will lead the way towards a new, more flexible era of supply chain management that is already well underway.
Derek Szopa is the founder of CloudSort.
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