James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP?s Supply Chain Quarterly and a staff writer for DC Velocity.
As companies seek that critical edge in logistics and supply chain management, you might think they'd be intensely focused on what the competition is doing. But that's not necessarily the case. Instead of looking outward, many are looking inward, scrutinizing their own operations for waste, areas of weakness, and so forth. And in many cases, that means they're making supply chain analytics—the process of examining and optimizing internal operations—a part of the routine, like freight bill audits or inventory cycle counting.
That's a marked change from past practice. It used to be that when companies employed analytical software, it was on a project basis to address a specific problem. "For a long time, firms have done one-off analytical studies," says Mike Watson of IBM. "Now, these firms realize that there are big benefits to using analytics and optimization on an ongoing basis."
Also known as "business intelligence" solutions, supply chain analytics programs basically monitor and measure supply chain activities from shipping to storage, from production to inventory. The applications use special algorithms to spot problems and then look for the underlying cause. By scrutinizing millions of pieces of data, the software can quickly decipher what's going on throughout the supply chain and detect minute changes that could portend trouble later on.
Leading companies are employing this type of software to gain sharper insight into their logistics operations. "Companies are increasingly looking at operational analytics—supply chain analytics, in particular—as a way to understand how their supply chains are really operating, what they cost, and how effective they are," says John Hagerty, a Gartner Inc. analyst who follows this market.
As for how companies are using these solutions, Hagerty says first and foremost, they're employing analytical software to get a better understanding of the factors driving their supply chain costs. In addition, they're using analytics to measure supply chain effectiveness, such as customer satisfaction with delivery performance. Once they see the results, they can zero in on the areas most in need of improvement.
Analytics are also being applied to get a better handle on demand—what a company needs to manufacture and what it needs to have in stock in the distribution center. "Analytics is being used much more aggressively to take external data, like customer demand, and translate it into a profitable response," says Hagerty.
But supply chain analytical software has the potential to do more than just prescribe a course of action. In the future, software experts say, these applications will be able to predict future developments so that companies can start making advance preparations. For example, Watson says, an auto parts store might use analytical software to look at the age of cars in its service territory to give it a better idea of what parts it will need to have in stock.
Companies could also use this type of software in their contingency planning. So-called "predictive" analytics can help managers assess future risks—like a product shortage or a jump in oil prices—and evaluate alternative responses. The advantages are obvious: Instead of being captive to events in times of crisis, a company would be ready with a detailed action plan to keep its operations running smoothly. For instance, if the price of diesel fuel were to soar, the company might start shifting shipments from truck to intermodal once prices hit a certain threshold or trigger point.
Given today's volatile environment, where an earthquake in Japan can lead to parts shortages in Southern California, companies have found there's a lot to be gained by regularly analyzing their operations and making data-driven decisions. "By running optimization once a month to create better supply chain plans," Watson says, "firms can continually drive down costs and make better decisions."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.