From accurate predictions of ETA to tracking supply chain uncertainties, DB Schenker has strategically invested in IT to steer through this pandemic globally while reclaiming growth.
This article was originally published on ETCIO.
This pandemic has forced the world to move towards a digitally enabled normalcy, which is different from various aspects, one of which is the logistics sector, which continues to seek new opportunities, and innovations amid Covid-19. DB Schenker, a global logistics and supply chain company has now focused on building data driven business models after facing supply chain shocks and noticing a few companies getting collapsed from global failures.
In an interview with ETCIO, Joachim Schaut, VP- Intercontinental Supply Chain, DB Schenker talks about adopting this normalcy as an opportunity to build a digital value generator for the business.
As a global supply chain player, what role does technology play in your operations?
Technology is one aspect, but you need to combine it with procedures, processes, and also with the people applying it. It is crucial to get the value out of it as a pure technology play will not make it in the end. At DB Schenker, we have various technologies implemented and under development. The call for a logistics service provider is for sure the transport management system, our TMS.
We have IoT platforms, but we are also partnering with leaders in certain technology areas, like Infor and other IT vendors for the extended technology support. With Infor technology support, we have managed to reclaim business growth and innovate for our customers. Within my understanding, It is not a matter of having one software piece or one technology piece but a matter of combining multiple things together to create an end-to-end solution. This includes IoT, predictive ETA for customers, traditional ETI, API technology to connect with partners, AIS for ocean freight vessels and a lot of things which we are putting together actively in order to shape an end-to-end solution for our customer.
We have a system called purchase order management where we use technology and platforms to integrate with all supply chain partners. With ocean freight carriers, other providers, suppliers of our customers and different departments in our customers, we bring everything on one platform to have a single version of the truth and an end to end visibility, not only for the transportation, but for the whole purchase order and down to product or SKU level, so that we have visibility customized to what the customer wants to see. We are also managing inventories, on time performance so that we have a quality improvement of the supply chain, but at the lowest possible costs.
How are you utilizing the capability of data and extending its value to other technologies such as IoT, etc?
We are using data insights from various sources such as purchase orders, ETA, buying patterns, and more. Then this data is used to improve container fill rates and utilize the right ports. We are also using big data analysis to reduce minimum order quantities in our customers supply chain in order to speed up the supply chain from a speed perspective, but at the same time, lower the inventory levels to free up some cash on our customer side.
Another use case lies within our IoT strategy where we are leveraging different parts – one is available solutions in the market, like the AIS data from the carriers to basically follow the GPS signal of a vessel and integrate these data into our visibility solutions. There are also smart boxes available on our side where we have a whole product suite to measure shocks, measure temperature for high sensitive goods and so on. We use this IoT technology to get a more in-depth tracking experience for our customer and to be able to monitor different data than what we could do without IoT in the past.
What are the challenges you faced while managing the company’s supply chain globally during the initial hit of Covid-19?
First of all the Covid-19 came as a shock, an uncertain happening which forced us to take difficult decisions. We also witnessed several failures and situations where other companies in this sector collapsed. This pandemic has shown us the need to invest in technologies which can support remote monitoring of supply chain and digital operations. It all started with postponing our ongoing projects which further led to a situation where we struggled to manage costs, liquidity, business value while maintaining continuity in the supply chain.
Not only from the hardware side but even a lot of algorithms have their issues when it comes to such shocks which occur from one day to another. Many algorithms didn’t work but our strategy of coning local IT and a partner ecosystem has supported in dealing with such uncertain failures.
The time has been challenging for us in multiple ways, but we have now adapted to the digital way of working. But I have realised that now is the time to invest in technology without considering the economic shakedown or any other ROI factors, because the cost of not having the right technology can cause serious business loss.
How are you going to plan your investments in IT to make your business future-proof?
We are now going on a lean agile and flexible approach towards investing in technology and strategy. Our focus is clearly on digital innovation and new use cases which can help in making the business future proof. Investing in data driven technologies, predictive and analysis based operations, IoT and other technologies will be our priority. Another big aspect is that all the supply chain shifts are not only due to COVID-19 but also due to governmental regulation in India, China, U.S. and also Brexit in Europe, and so on. This will result in supply chain shifts from one country to another where we as a global logistics service provider, need to be agile enough to cope with the shift. So going forward we digital will be our core strategy.
Image via Economic Times CIO