One of the most important impacts of the pandemic lockdowns has been disruption of global supply chains, with manufacturers, distributors, retailers and consumers experiencing substantial shipment delays or inventory shortages. With this in mind, how are advanced logistics technologies helping managers to not only survive, but thrive through this unprecedented period?
Blumberg Capital is proud to have recently sponsored a discussion on this topic with three industry leaders: John Urban, founder and former president, GT Nexus; Dan Sanker, founder and president of portfolio company CaseStack (a subsidiary of Hub Group); and Chris Kirchner, co-founder, chairman and CEO of portfolio company Slync.io. Here are some of the key discussion points from the conversation:
Drivers of technology development & adoption
The current crisis is not the first time the supply chain has been rocked with major disruptive externalities. Several recent historical crises (e.g. Y2K, the Dotcom bubble, 9/11 and the 2008 financial crisis) helped serve as a catalyst to technology adoption among the global manufacturers, shippers, traders, retailers, etc. Throughout these past decades we saw the adoption of the cloud, SaaS-based models for software vendors, proliferation of AI and mobile telephony, internet and computing.
Traditionally, the logistics industry built its own software and depended (even until now) on many paper-based manual processes, having to manage across multiple silos of unstructured data, operational risks and uncertainty, such as weather, strikes, wars, pandemics, etc.
Today, the global logistics sector is in transition from proprietary, legacy systems to API driven, modern AI-powered systems. In addition, managers are adapting to an increasingly mobile workforce and are benefitting from new data streams including those from the IoT realm. For the first time, this has helped provide end-to-end monitoring, tracking and routing functionality. Additional exciting future opportunities exist in leveraging previously unstructured data into predictive analytics engines to help companies manage complexity and minimize risk with increasing efficiency and visibility.
The recent crisis has brought into high relief the crucial requirement for real-time, intermodal, end-to-end logistics solutions. With adoption of these technologies, the highly complex supply chain ecosystem will be better able to predict, respond and recover from the wide variety of challenges that we have faced historically and those we may not even anticipate.
The speakers cautioned that it remains imperative for vendors to show the benefits of their solution in the full context of existing infrastructure and with a roadmap for future evolution. A listening attitude and specific case study examples are often very helpful.
COVID-19 impact on logistics tech investments
The pre-crisis drivers of logistics technology investment tended to center around cost avoidance, automation and visibility.
While still applicable, this crisis has highlighted more glaring problems – slow adoption of digital solutions in this industry led to visibility gaps and lack of flexibility to adjust supply chains as needed. In the recovery, technology investments will be centered on fostering end-to-end transparency, collaboration and workflow process automation. New workplace flexibility also likely requires a more decentralized workforce, distributed decision-making, video functionality, online transaction capabilities and electronic document creation and sharing.
The biggest barrier to innovation? Inertia and the “not invented here” syndrome
The world has been changed by this crisis. Business models are changing and infrastructure will need to support these new realities. Successful companies will build on their existing functional strengths, but adopt new technologies to help move them to the era of the virtual enterprise with customer success at the center of their KPIs.
Innovative supply chain platforms – including CaseStack, SupplyPike, Slync.io and NYSHEX – are well-positioned to help customers transition to more efficient, flexible and robust operations and meet the challenging demands of the future.
If you missed the webinar, click here to watch it.