Logistics made smart
When I call Sello Lehong, the head of innovation for Barloworld’s Automotive and Logistics division, it’s the beginning of April and we’re several days into the national coronavirus lockdown. We exchange pleasantries around our lockdown experiences. He tells me about visiting shops that feel like ghost towns. I tell him that I’ve just ordered groceries online and we chuckle about the expected delivery date: 8 May. My experience proves relevant in our conversation about supply chain and logistics innovation.
“The best way for groceries to be delivered is within an hour of ordering them,” Lehong says. “Why is that the case? Because if you headed to the shops right now to buy the same groceries, it would probably only take about an hour. If we want to offer a service that adds value, it has to be quicker and more efficient than what you can do yourself.”
My online grocery predicament, adds Lehong, also highlights the importance of creating logistics and supply chain operations that are context-aware’. Why would a customer order groceries today that they’re only going to need in a month’s time, he asks. Being cognisant of customer context requires that you try to understand why people are buying what they’re buying. By not anticipating that more people will be ordering food online because of the lockdown, this retailer failed to understand the context of the order and lost a sale as a result.
If we want to offer a service that adds value, it has to be quicker and more efficient than what you can do yourself.
This scenario can be remedied by cognitive supply chains, which he describes as an exciting future logistics industry trend. Highly dependent on advanced artificial intelligence and deep neural networks, cognitive supply chains can self-adjust without human intervention and can anticipate demand. “In a world of anticipatory logistics, suppliers will know that you want to place an order and they’ll anticipate, more or less, what you will be buying so that they’re prepared to handle your order before you’ve even proceeded to checkout,” he says. This demands new levels of integration and information-sharing between supply chain/logistics companies, manufacturers and retailers. You need to understand what’s happening from end-to-end in order to make predictions that will have a real impact, he continues.
Where are we headed?
Lehong says the success of any business is inextricably linked to the performance of its supply chain. Emerging technologies play a vital role in eliminating manual processes, identifying unnecessary links, improving efficiencies and reducing wasteful expenditure. But this doesn’t mean you can just throw technology at a problem. It also doesn’t mean that companies should overhaul their entire operation all at once. “It’s important to always think about the end-user. The technology needs to be so simple and natural to use that it’s no hassle adopting it.” Similarly, if you want to guarantee user adoption, the technology should make it easier for your teams to do their jobs.
Experiment, experiment and experiment again.
For example, in some cases, new technologies have been used to transform warehouses into fully automated facilities that are filled with environmentally friendly equipment and located closer to the customer. Barloworld is currently testing out the use drones in one of its warehouses to streamline stock counts. This means that workers who would usually spend hours counting stock can now focus their attention on analysing the data generated by the drones, he explains. The approach entails improving one process and monitoring the results before deploying anything more broadly, Lehong notes. “Experiment, experiment and experiment again. We aren’t in the era of talking, we are in the era of doing. But we have to do it in an informed manner. By experimenting with clear intentions and outcomes, we can quickly see if the results aren’t what we were expecting, change things up and then try again.”
Barloworld Logistics generates a huge amount of data from the telematics devices fitted to its trucks, says Lehong. But this information is only of value when used effectively. “We use this data to track driver behaviour and give competency scores on a near real-time basis. This makes it possible for fleet managers to identify problems and put the necessary training interventions in place before any unfortunate events take place.” Similarly, Barloworld’s online marketplace brings together industry data to connect demand and supply by allowing shippers and shipping companies to connect based on different preferences, from price point to specific needs.
When talking about data, having the right logistics knowhow and the necessary skills is essential, says Dr Dennis Laxton, a senior lecturer at Regenesys Business School, predicting that this will be the next big challenge for the industry. “We need people who can analyse data and find patterns,” he says. “We also need people who can use these insights to optimise processes, identify how to link information to the right technologies and who can do so with the right security procedures in place.”
Something like Covid-19 has shifted priorities for businesses and individuals across the globe. While the impact of, and the reaction to, the virus has varied from country to country, trade disruptions caused by the pandemic have had an enormous effect on the supply chain and logistics space. According to Dr Laxton, in times of disaster, the value of data, and data analytics more specifically, is highlighted. “When everything is so uncertain, you need to go back to the data. Analyse information, identify trends, make deductions and then determine actions based on what you do and don’t know. If anything, the coronavirus has shown us that our current supply chain needs to adapt to cope with situations like this.”
For Lehong, no matter what you’re doing, you always need to bring things back to the customer. “I’m not one of those people who believes that a company’s transformation or innovation efforts should start with the technology,” he says. “I think the key driver of any technology deployment should always be customer needs. Once the customer is well understood, it becomes fairly easy to match that customer with the most appropriate technology.”