Evolving distribution: Smarter product tracking and tracing
Developing technologies are coalescing to take the guess work out of supply chains and provide a constant, real-time and accurate overview of where goods are at each stage
The dark corners of supply chains might not stay that way for much longer. A growing field of technologies are coming together to shine a light into the hardest to reach recesses and may soon be illuminating supply chains from end-to-end.
Radio Frequency Identification (RFID) tags, the Internet of Things (IoT), increased communication network coverage, Application Programming Interfaces (APIs), blockchain, and edge and cloud computing are cutting down the gaps in between different segments of the supply chain bit-by-bit.
Reuters Events: Supply Chain spoke to two globe-spanning organisations whose unique roles have given them a position to try out these technologies in-the-field and are trying to build the smart product tracking networks of the future.
Sitting at the dock of the bay, monitoring global trade roll away
If you wanted to sit at the crossroads of supply chains and look at how global goods are moving, then you would be hard placed to find two companies more suited to that than Maersk and CHEP.
The former is a shipping giant that reaches across the world, with its more than 700 owned and chartered ships accounting for over 6 million Twenty-Foot Equivalents(TEUs), which represents a huge chunk of the 24 million available globally. CHEP for its part quietly greases the wheels of global logistics, providing more than 300 million platforms, such as pallets, containers and trays, that carry everything we rely on as consumers.
It's a matter of capturing the data and sending it to the relevant party. It is something that we are already doing in a way and are further scaling up, so that we can really bring the relevant data towards the customer wherever the container may be
This gives them a unique position to provide insights into the way global trade is developing and to aid parties along supply chains with tracking movements and responding to issues. Indeed, both have made adding this capability core to their business goals and central to their future offerings to the logistics and transportation industries.
“Our greater strategy is our ‘integrator vision’, as we call it,” says Daniel Mast, Senior Platform Product Owner, SCM Platform, for A.P. Moller-Maersk, “where we really want to integrate our ocean and our land-side businesses, and to bring them much closer together. That, of course, involves our assets, because that's another advantage we have in a way, the fact that we have all those physical assets ourselves. The containers are ours, but the vessels are also ours…. so it's a matter of capturing the data and sending it to the relevant party. It is something that we are already doing in a way and are further scaling up, so that we can really bring the relevant data towards the customer wherever the container may be.”
We have 300 million assets around the world in 55 countries. The biggest brands trust our products to be moved on them. Therefore, we are in a unique position
They are looking to do this through a series of recently-launched products, such as NeoNav, which plots demand data onto transport availability, Maersk Flow, which tracks goods across the complete supply chain, and Tradelens, which is a multi-company effort to provide a trade platform underpinned by blockchain technology.
Steve Nebeker is President at BXB Digital, part of Brambles, a major supply chain logistics provider that through their position as a provider of pallets and transportation solutions with their CHEP brand, allows BXB Digital to then turn those movements into meaningful data. The parent organisation forms an “Invisible backbone to the global supply chain. We have 300 million assets around the world in 55 countries. The biggest brands trust our products to be moved on them. Therefore, we are in a unique position,” says Nebeker.
He feels that they are “Starting to unlock significant value to businesses by having ability to digitise, and to gain visibility to the products, as they move through their supply chain.”
The key technologies transforming tracing
The reason that both companies are relatively early in the journey of providing this kind of visibility and have recently launched a suite of products, is that we are only now seeing technologies really coalesce to provide a solid foundation for tracking across complete supply chains.
These technologies broadly fall into two categories: Those that enable information to flow reliably and those that capture it in a meaningful way.
Combining those that are proven, such as APIs and cloud computing, with those that are currently maturing, such as RFID and 5G, is what is now giving supply chain operators the power to finally clear the information gap and get real visibility of goods in transit, across more than just the latter stages.
You will have some supply chains that are very predictable and what's required in those environments will be more gate programs
For Maersk and Mast, the priority is “First of all, of course, ensuring that the technology landscape platforms that we have are becoming much more API-driven.” APIs are the critical intermediaries that allow different systems to talk to each other and share that all-important information. Therefore, they are “a very important thing for us, so that we can provide our customers with … real time messages and events, so that they know where the container sits and where the cargo is as soon as we get the message from a vessel or from a port terminal that the container has arrived” for “whoever needs it.”
“This is very much an event-driven approach,” that for a “large part is still kind of more traditional, transactional way of doing so it's just that you have data points, somewhere along the journey, and you send that to anybody who needs it.”
After this, technologies that have been “Gradually maturing and becoming bigger” can be used to actively track within the journey, rather than simply offering notifications at key points, most notably the Internet of Things and connectivity capacity.
Nebeker sees exactly the same thing happening - “You will have some supply chains that are very predictable and what's required in those environments will be more gate programs, so that I can see how product is moved, what stage is at, where it's in progress, when can I anticipate is going to be arriving at this place because it has passed certain gates, but I don't necessarily need to know where the product is….. Then there are other supply chains more like ours, where our product can flow freely inside of our markets, and therefore, in order to control it, in order to see it, you're relying on reported data, inferred data, based on the points where you can see.”
Now, the capability is opening up to deploy a “Much more high-powered autonomous device sitting on top of the platform, where it can gather intelligence and communicate that, regardless of where it is,” says Nebeker. “So, what we are now able to do is take these movements which are previously unsee-able, and make them see-able.”
Overcoming the challenge of scale
However, this kind of tracking is not going to be easy to deploy, and will require specific use-cases for the next few years.
For example, Maersk are starting with their reefer containers, giving them GPS-equipped sensors for two reasons. This is because they provide one of the best business cases, as “Most of the time, there's more time-critical and climate-critical products in there, which of course require better tracking and better understanding of the environment in which the products are, and also have guarantees that they are within certain thresholds or below certain temperatures.”
Reefer containers already have power sources [and] … they already have more maintenance in a way, so it's easier to equip additional technology to these to these containers
An obvious example of when this is critical is in the current vaccine distribution. In cases like this “You need to have good tracking and IoT devices,” points out Mast.
The other side of the business case for starting here is “Purely … a logical choice because, of course, reefer containers already have power sources [and] … they already have more maintenance in a way, so it's easier to equip additional technology to these containers.”
Even here, there are challenges, such as getting the data from ship-to-shore using satellite communications and making sure that containers sensors can still communicate deep in stacks on ship decks, as well as the cost component.
Today with many companies is you will have certain parts of the supply chain when you gain OK visibility and the rest of it goes blank and you just don't see it. This is something we hear from many customers
“If you have a couple of hundred thousand containers in your business, and you do need to be a bit careful with your business case,” warns Mast. “If it's just, I don't know, attaching a central package, which is perhaps $10 or $20 each, well times 200,000, or 300,000 is still a big number you're looking at. So here we are applying a bit of … a demand-driven approach based on customers, the type of industries, the type of goods that are being shipped.”
However, there is another approach that both are deploying and investigating, which is to deploy the tracking on only a segment of the transport load and then infer outwards.
Removing the guesswork
Currently, there are big gaps in supply chain visibility, which leads to a lot of guess work about what’s really going on in those unseen parts.
“Today with many companies you will have certain parts of the supply chain when you gain OK visibility, and the rest of it goes blank and you just don't see it. This is something we hear from many customers,” observes Nebeker. “Therefore, what they’re having to do is infer or impute what has happened in between the points of visibility, which tends to be quite different parts of the supply chain and there's many, many things that could have happened. So, they build a hypothesis by trying to triangulate the data they have, and say, ‘Okay, I believe that this is what's happening, therefore, I'm going to build my processes based on that.’” This naturally leads to errors and often major misalignments in expectation and on-the-ground reality.
Now I know what is happening, because I've taken action by what I have observed, as opposed to what I inferred
This will change in the near future, though sensors remain expensive relative to total volumes of moving goods, even a single sensor that “Represents 20 pallets,” will still give a complete impression of that journey and that data becomes stronger as the cycle repeats. Then “it's no longer inferred. Now I know what is happening, because I've taken action by what I have observed, as opposed to what I inferred,” says Nebeker.
Leverage is everything at that point
“What you want is the value of having one device be representative for as many pallets as you can, and therefore you can leverage the high value autonomous-seeing to track as many products that are moving concurrently as possible, especially as they break down,” explains Nebeker. “Leverage is everything at that point,” he adds.
Engaging in continuous and detailed tracking of products through entire supply chains gives numerous advantages alongside the obvious visibility, the number of one of which in Nebeker’s opinion is “Waste elimination.”
What you don't want to do is spend the technology to do things that you've always done, but just a little bit better. What you want to do is spend the technology to do things that you couldn't have done before
He warns that “What you don't want to do is spend the technology to do things that you've always done, but just a little bit better. What you want to do is spend the technology to do things that you couldn't have done before.” Although it is “Tempting for a lot of companies [to use] it purely for efficiencies: ‘Now, I can eliminate that activity because I can automate that,’ or ‘this used to take me two minutes, now it takes me one minute 50 seconds’. I think, in my view, that that's kind of underplaying what this brings you. You're gaining things that are possible that were not possible before. By having this visibility, by eliminating waste, by taking whole processes out that are unnecessary, by redirecting your flows to do what was intended,” by reducing inventory waste, and by taking out inefficient trips you can fundamentally change your supply chain’s efficiency.
The long-term tech outlook
We are only just scratching the surface, believes Nebeker. “As we get into this, I think we'll discover more areas for where it's going to bring value.”
Mast is of a similar opinion and expects the real change to start coming “five to ten years,” in the future, where “we'll see probably a proliferation of these types of devices, when prices go down.”
Mast thinks a critical point will be when the mass rollout of 5G, which he sees as a "key enabler" technology, meets “The release of cheap, abundant sensors, and different types of sensors.” This will “spark a myriad of opportunities.”
These two combined, if you ask me, is where you also really get the real strength of both of them, because on the one side, you have the physical flow of goods, which are tracked with sensors, and on the other side, you have the digital flow of goods, which are powered by the ledger, the blockchain
The next step beyond that is the combination of “IoT and tracking and ledger technology like blockchain.”
Mast feels “These two technologies also blend deep…. These two combined, if you ask me, is where you also really get the real strength of both of them, because on the one side, you have the physical flow of goods, which are tracked with sensors, and on the other side, you have the digital flow of goods, which are powered by the ledger, the blockchain. If you can bring these two worlds much closer together without having all kinds of steps in between, with ERP systems and mainframes and spreadsheets and macros to calculate, because that’s all errors you are introducing,” then this could be a revolutionary step. Moving beyond this to a world that operates “From sensor directly onto the blockchain,” is huge, he thinks, as “then you create that layer of trust and that would really be a massive step forward.”