The following was written by Dr. Oscar Pernia, Vice President, Applied Innovation, Navis and Mafran Martinez, Managing Director, Algeciras Logistic Areas and originally appeared on Port Technology International. Stay tuned for Parts II & III in this blog series.The digital transformation of the transportation and logistics industry is progressing consistently, as demonstrated by the masterplans of key players such as Maersk, MSC and CMA-CGM in the container shipping sector. These plans cover the integrated supply chain aspect (an evolution of operational and business processes) through the expansion and acquisition of new digital capabilities.Ibrahim Gokcen, the Chief Digital Officer at Maersk Transportation and Logistics, recently outlined how the future for his company is dependent upon a seamless synthesis of the organization’s expanding digital capabilities with their extensive industry expertise. This is another sign that digitization and automation are the major forces shaping our industry today.Digital initiatives are becoming stronger and stronger in major companies, however there continues to be a trivialization of solutions as only ‘technology-based’. This results in confusing and ‘undercooked’ scenarios for companies considering what will be realistically possible and approachable in the coming years when it comes to digital transformation. Our industry cannot simply look at new technologies in isolation. We must be attuned to end users, taking note of their experience and implementing it as a core element in inspiring broader changes to transportation and logistical processes. In essence, the technological evolution of their businesses into the future.Transport and logistics are no longer merely a service contract in which the customer is a passive actor with no decisions to make; today the customer’s end-to-end experience, engagement and satisfaction are the real differentiation between providers. Within logistical models such as the ones executed by Amazon or Alibaba, their differentiation is enabled by supply chains that are on-demand driven. The paradigms with regard to time, cost and responsiveness are vital in remaining competitive. These strategies are managed through an end-to-end process approach, with a deep understanding of consumer behaviour.Jeff Bezos, the CEO of Amazon, has highlighted many times at conferences that the real revolution from Amazon is coming from the connection of real consumers to a dynamic network of information, people and ideas. To establish a reliable and scalable structure, Amazon has prioritized its focus on its distribution supply chain as the core of its business model.Responsiveness, Flexibility and ResiliencyNew developments have also been witnessed by key cargo owners such as Inditex and Tesla, both of whom have based their business models on a core logistical performance, which is characterized by high efficiency, responsiveness and operational sustainability (all critical factors for differentiation). These actors make use of advanced analysis and prediction capabilities to control their product value chain proactively and dynamically, based on an understanding of the real-time transport and market situation, thereby utilizing data from their own supply chains.Pablo Isla, the CEO of Inditex, has outlined that logistics is not just a question of being fast. It is about defining the ‘concept’ of demystifying what a customer wants and then constructing a deeply integrated supply chain that flows between design, manufacturing and logistics.In our industry, value and competitiveness are defined by time and cost requirements. This baseline is not something that is clearly determined in the current technology models and solutions. The only stable truth is articulated through a good understanding and connection of processes, related problems and associated value. There is no common rule to manage goods and deliver satisfaction to customers, especially in terms of time.Some products require a fast logistic, other products need a just-in-time logistic (these things are not the same) and for others, time is not a factor. There will be no global logistics in our industry as any product, any customer, and any need has to be covered by transportation companies who will always offer the best choice for each unique case. This means that container companies need to modify their vision. They must look from container transportation to cargo transporters, and then focus on what's inside the box.There is a clear demand to enable more ‘Logistics Amazons’, firstly to avoid monopolizing the market, and secondly in order to push ‘fair globalization’ boundaries out. Both the overall supply chain and the individual actors are demanding advanced connectivity and integration. In order to provide this, it is fundamental for collaboration networks and relevant international institutions to frame processes and data standardization in a manner that is open to new and dynamic practices. We must also foster paradigms that will move the industry toward a further decentralization of management specific processes, thereby allowing greater transparency and traceability control throughout the supply chain.In the present global scenario of investment, innovation and growth, the basics of end-to-end planning processes must be re-evaluated. Today, supply chain planning processes take place in isolation, with claimed victories based on myopic KPIs, while the overall supply chain lacks responsiveness, flexibility and resiliency. Worse still, contingencies are costing hundreds of millions of dollars to fix and recover. A shift to end-to-end processes, that includes planning but also feedback loops from execution, is necessary to move toward a more intelligent and manageable supply chain.About the Authors:Manuel Fco. Martinez (Telecommunications Engineer and Port & Logistics Management MsC) has worked on the development of Logistics Platforms during the last 10 years and currently is Managing Director for the Logistic Area at Algeciras Bay, focused on catalyzing the logistic operators’ needs in the area and Technology Lead at Andalucia Logistic Network (RLA). He is also General Secretary for Europlatforms, where the implementation of new technologies and logistic concepts are promoted. He is developing his PhD research at University of Cadiz, and focused on cost optimization within supply chains and the influence of time service parameters. He is an active member of different experts groups like with UE DTLF and UNECE.Dr. Oscar Pernia (Telecommunications Engineer and Industrial Engineering PhD) is responsible for Applied Innovation at Navis, leading ATOM Labs in Rotterdam and focusing on the discovery and experimentation for Navis software solutions while tackling ocean supply chain related problems. The baseline of his work has been centered on the implementation and optimization of processes and solutions for automated terminals, participating in more than 30 terminal projects globally.About the Organization:XVELA provides a transformative, cloud-based collaboration platform and maritime business network that drives transparency, efficiency and profitability to ocean carriers and terminal operators. Through real-time collaboration, shared data and actionable visibility across the vessel rotation, XVELA enables terminals, carriers and their operational partners to work together to simplify, coordinate and synchronize their operations, starting with stowage planning and quickly expanding to berth management and port call optimization. The result is a win-win solution that allows both terminals and carriers to forge new efficiencies, improve customer service and reliability, and capture substantial untapped savings across the ocean supply chain.Backed by Navis, the leading provider of software and services for terminal operators and ocean carriers, XVELA operates as an independent entity focused on enabling collaboration and operational visibility. For more information, visit www.xvela.com.
You can read Part II of this blog series: Process Standardization, Data Structure and Security and Part III: Digital and Automated Intelligence Solutions.