Digital Density Assessment for Hyperconnected Logistics

The shining path to digital transformation is often obscured by the lack of practical info about how automating some tasks or expanding visibility can become a competitive advantage. Considering that a financial investment should be included, a cultural mindset transformation should be put in place and immediate results are sometimes abstract to be seen, motivation is often difficult to be found.

However, the best way to understand how technology can help supply chain teams enhance digitization is by analyzing where the company wants to be in the next few years and how fast it will adapt to market pressures as technology evolves. Afterwards, the universe of tech options can be assessed. Also, companies need to build up a clear map of current digital density and create a dynamic roadmap to reach digitization goals and increase productivity.

Digital density assessments should include at least the following items:

1. Sources: what is it that is already connected in your business or industry? 
2. Information: what type of information are you using to build up your value proposition?
3. Interactions: which metrics of basic interaction among stakeholders are key in your industry?

These items may vary depending on every stakeholder in the supply chain and how it is structured. Fragmentation of processes and contracts may also affect as they could add complexity to any transformation possibilities. Hence, the lack of control of certain tasks (for instance, for a manufacturing company,  letting exporters manage transportation for all inbound imports of raw material under CIF/DDP terms) could partially jeopardize digitization processes.

The degree of manual tasks is also key to be noticed and companies need to assess how likely and efficient it could be to digitize them, if under their scope. But having a clear digitization goal beforehand should be mandatory.

Among possibilities, here is how some stakeholders of the logistics ecosystem are already identifying sources, information and interactions to increase their digital density:

• Shipper / Exporter:

1. Sources: Cloud Enterprise Resource Planning (ERP) / Transportation Management Systems (TMS) /  Warehouse Management System (WMS). Mobile Robots.
2. Type of info: cargo description.
3. Type of interaction: prescriptive.

• Shipping Companies: 

• Logistics Service Providers / 3PL: 

1. Sources: own Visibility Portal.
2. Type of info: shipment status.
3. Type of interaction: descriptive.

• Trucking companies: 

1. Sources: IoT (trucks, drivers’ devices).
2. Type of info: geolocation, ETA.
3. Type of interaction: predictive & prescriptive.

• Ports and Terminals:

1. Sources: IoT (cranes, vehicles).
2. Type of info: gate-in / gate-out / loaded / unloaded status.
3. Type of interaction: descriptive.

• Authorities, Institutions & Consultants: 

1. Sources: regulations, indexes, market intelligence.
2. Type of info: red tape requirements, costs, TT.
3. Type of interaction: predictive.

For obvious reasons, useful analytics are available when all this data is gathered and processed. The on-going establishment of 5G devices and platforms represents low-cost and real-time possibilities for things to be connected. Platforms using Artificial Intelligence and Machine Learning for data analytics are able to process historical data, find patterns and return prescriptive information to stakeholders. IoT devices bring precise location and qualitative inputs. 

When put together with a process-optimization and real-time availability focus, hyperconnected networks of logistics are created.  Companies with the ability to track down every single box shipped out of their facilities (along the supply chain areas previously shown) are noticing the following opportunities:

• Visibility is reachable and accurate.
• Resources are correctly measured (and, eventually, correctly used).
• Automated planning of current shipments is done prescriptively.
• Staff organization is adapted to real needs, improving cost management and staff’s quality of work.
• Delays in previous phases executed by other stakeholders but affecting future loading are included in planning corrections.
• Smart fulfillment procedures in warehouses are easy to implement.
• Sales, Marketing and Pricing execution is proactive based on suggested scenarios.