6 Ways Mobility is Shaping the Supply Chain
Mobile technologies are certainly changing how we track freight outside of the four walls, putting “real-time” logistics management within the grasp of many savvy shippers. However, our analysts content that we have more work to do in the areas of investment and integration into existing operations.
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As mobile technologies continue to make their mark both inside and outside of the four walls of the warehouse and distribution center (DC), 2017 appears to be the year when the latter comes into especially clear focus. From real-time goods tracking to routing assistance to the Internet of Things (IoT), “cutting the wires” in the area that lies between the warehouse yard and the customer’s front door is gaining ground as shippers grapple with fast order fulfillment, smaller order sizes, and ever- evolving customer expectations.
In return for their tech investments, shippers are gaining benefits like shortened lead times, improved supply chain visibility, error reductions, optimized transportation networks and better inventory management. Combined, these advantages are helping companies work smarter and more efficiently in today’s fast-paced business world.
“The days when drivers used radios or onboard terminals to communicate their moves (i.e., pickups, drop offs, adjustments) back to home base are fading quickly,” says Bob Hood, a principal at the consulting firm Capgemini. “Today, all of that data is continuously fed into dynamic optimization engines that not only help create the most efficient routes, but also give the shipper insight into vehicle and driver performance.”
Mobile technologies are also helping companies improve communication within their transportation networks and more accurately measure the productivity and efficiency within those networks. “Mobility is really creating an entirely new paradigm for vehicle communications,” says Hood, “and adding new levels of sophistication to the area that lies outside of the four walls of the warehouse.”
6 key mobility trends
Focused on improving processes, cutting costs, and gaining efficiencies, a growing number of shippers have set their sights on the area outside of the four walls. And much like what’s happening within the world’s DCs and warehouses—where “cutting the wires” remains a top-of-mind imperative—mobile technologies are playing a key role in this transition.
Here are six ways mobility is shaping the supply chain:
1.) Increasingly sophisticated—and sometimes costly—vehicle communications: There was a time when the only contact a driver had with home base was after an action took place (e.g., a load drop off) or when there was a problem. Today, shippers communicate with their drivers in real-time while also paying closer attention to vehicle operations, routing and scheduling, and other key performance indicators (KPIs).
In most cases, mobility is the key driver behind these advancements. Hood says that he recently worked with a customer that implemented a real-time, intra-day optimization tool that enables same-day pickup and delivery for its fleet. Concurrently, the firm upgraded its onboard computing capability—a move that led to enhanced transportation optimization across several dozen locations.
“They’ve upgraded equipment in both the truck and in the cabin and are now training drivers on its use,” says Hood, who admits that while the initial cost for such a transition is high, the long-term benefits will be substantial. “When you start talking about onboard computers and the software that supports them—plus the integration across the supply chain—the costs can be fairly significant.”
2.)There’s a trucking app for that: By 2015, Frost & Sullivan says that the size of the mobile trucking app market will hit $35.4 billion. Mobile apps are being launched, targeting the trucking sector almost constantly, the research firm states. “With the launch of Uber Freight, the competition in the trucking app space has only heated up, pressing the incumbents to innovate and move fast,” say Frost & Sullivan analysts, noting that just about 30 of the more than 100 currently available trucking apps in North America will still be around in 2020.
The analyst firm also contends that mobile-based freight mobility will be the biggest disrupter transforming the North American transportation industry. “On-demand freight mobility apps will bring in high asset utilization among smaller fleets; help reduce logistics costs for shippers due to lower brokerage fees; ease capacity crunch, reduce empty return miles that are currently about 20 billion miles; and also help reduce emissions,” added Frost & Sullivan analysts.
3.) It’s not just for the big guys anymore: David Krebs, president of enterprise mobility and connected devices at VDC Research, remembers a time when fleet mobility solutions were reserved for larger entities that could afford them. As tech has advanced and become more mainstream and affordable, so have fleet mobility solutions.
Whether a company wants proof of delivery, fleet management, workforce management, or resource management solutions, most are fully accessible to a wide range of shippers. “Mobility is becoming that much more accessible for any sized logistics operation or shipper,” says Krebs. “As technology penetration continues to improve overall, adoption will likely increase exponentially.”
4.) Mobility helps pinpoint performance and productivity gaps: Knowing where everything is at any given time (i.e., “visibility”) is the Holy Grail for every logistics manager, and mobility is putting that goal within their reach. Armed with accurate information, shippers can quickly identify and mitigate performance gaps, improve their agility, address inventory problems, and make other business-critical moves.
“It may sound obvious, but visibility and inventory accuracy remain big challenges for many organizations,” says Krebs. “In the retail supply chain, in particular, mobile technology is playing an important role in transportation optimization, load planning, load management and other related functions.”
5.) More data means more mobile technology to generate and support it: “There’s a lot of hype around IoT and sensors in the supply chain right now,” says Simon Ellis, practice director at IDC Manufacturing Insights, “particularly when it comes to deploying sensors in the field to interact with mobile devices.” Shippers who handle perishable goods and refrigerated goods, for instance, are using sensors to detect trailer temperatures, dead batteries, and other problems that would impact their cargos.
“Using sensors—and the data that they generate—shippers can hopefully make better business decisions,” says Ellis. “This is just one trend that’s making the use cases for IoT and mobile deployments more valuable as a whole.” With more real-time information available, the opportunity to “consume the insights from the analytics on that data” increases exponentially, he adds. “As data becomes more common and more available, the need for more mobile technology in the field is also expanding.”
6.) Customers want more information and data—and they want it now: Customers’ expectations for real-time shipment data that’s available at their fingertips without having to pick up the phone or make email contact is growing.
“They want to be able to do it quickly online, and that requires some level of mobile technology,” says Ellis. “This is another trend that continues to raise the bar on the mobile front, where shippers have to be able to provide this level of insight.”
To get there, Ellis says that all links in the supply chain must be instrumented—including human resources. “In the case of people, instrumentation means a smartphone or a mobile device,” he says. “This is yet another driver of the mobile movement outside of the warehouse.”
Locking it down
Even as shippers push toward real-time, end-to-end supply chain visibility, there are a few barriers holding back mobile adoption outside of the four walls of the warehouse and DC. Krebs says that one particularly difficult challenge is worker safety, along with the fact that mobile devices and applications can be rather distracting.
To overcome this issue, Krebs says that more vendors are delving deeper into application design and ensuring that drivers keep their eyes on the road—and not on their devices. “There are ways to ‘lock it down,’ so to speak,” says Krebs, “and make sure that the use of technology doesn’t lead to accidents.”
The many different legacy systems that shippers rely on to run their businesses also get in the way of the fully mobile supply chain. “Just because a shipper wants to be able to do something doesn’t necessarily mean it’s going to be feasible using today’s existing infrastructure,” Krebs points out. “Legacy systems and the more intuitive, modern solutions don’t always go hand-in-hand.”
Despite these and other challenges, Hood and Vernon say the real-time supply chain management ideal is coming within the grasp of today’s shippers. However, there’s still more work to do in this area.
“In certain ways, we’re already there,” says Vernon, who points to applications that track trailers, utilize GPS positioning, and take temperature measurements as three examples of this. “But as far as the whole ecosystem being connected, we’re still very much in the beginning stages.”
And it’s not for lack of equipment, Vernon notes, but more on shippers’ reluctance to invest in and integrate the technology into their operations. “Some companies have gone in very quickly, like the ones that are using remote sensing on their trailers and loads, while others have been holding back,” says Vernon. “At this point, adoption rates really hinge on carriers and shippers making the decision to make the move into this phase.”
Bridget McCrea is a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996 and has covered all aspects of the industry for Logistics Management and Supply Chain Management Review. She can be reached at [email protected], or on Twitter @BridgetMcCrea