Above the Fold: Supply Chain Logistics News (September 20, 2019)

Congrats to all of our Logistics Leaders for T1D Cure team members who participated in last Saturday’s JDRF Ride to Cure in Saratoga Springs, NY. We all finished with smiles on our faces, and although it was cloudy and chilly, the rain held off for most of the ride. More importantly, our LL4T1DCure team played a big part in the $1.5 million raised to support JDRF’s mission of “accelerating life-changing breakthroughs to cure, prevent and treat Type 1 Diabetes and its complications.”

Here are some photos from the ride:

A big thank you to our sponsors BluJay Solutions, C.H. Robinson, Descartes Systems Group, enVista, and our families and friends who have donated to the cause.

Next up: the Death Valley, CA ride on October 19, where I will be cycling 102 miles with several teammates. I often get asked, “Why ride in Death Valley?” where the temperature was a toasty 108F just a few days ago. I’ll share my answer in a future post.

In the meantime, it was a very busy week in the world of supply chain and logistics. Here’s the news that caught my attention:

C.H. Robinson to Invest $1 Billion in Technology

Sometimes the incumbents get overshadowed by the new guys, especially in the press. It happened to Walmart with Amazon, and Microsoft with Apple, and more recently, C.H. Robinson with Uber Freight (and all the other “digital freight” startups).

How you respond as an incumbent to new competitors and industry trends is critical for maintaining success. In the case of Walmart and Microsoft, although there were some painful periods and bumps in the road, both companies are arguably as strong and influential in their respective industries today as ever before. In light of everything happening in the logistics industry today, where technology is playing a more critical role in meeting customer expectations, C.H. Robinson (a Talking Logistics sponsor) is accelerating its investments in technology and talent to remain a leader in this space. According to the company’s press release:

C.H. Robinson has committed to investing $1 billion in technology over the next five years, doubling its previous $1 billion investment in technology over the last 10 years. With more than 1,000 data scientists, engineers and developers, the company is continuing to invest in global talent in this critical area, making an already strong team even stronger.

Speaking at the Council of Supply Chain Management Professionals (CSCMP) EDGE Conference in Anaheim, California, [C.H. Robinson President and CEO Bob Biesterfeld] explained how big data and digital technologies, including artificial intelligence, machine learning and predictive analytics, are having a profound impact on the supply chain marketplace. He discussed why only those who leverage both technology and talent will compete and win on supply chain in the future.

Sometimes people get overshadowed by technology, but Biesterfeld made a point of emphasizing the importance of both: “It’s when these [technologies] are leveraged by the smartest and most relentless experts — who really understand and are committed to our customers’ business — that we create extreme value in the supply chain for our clients’ benefit.”

How important is talent when selecting a logistics service provider? We asked our Indago practitioner community earlier this year and it was the number one factor, ahead of cost and IT capabilities.

In my supply chain and logistics predictions for 2016, I predicted that the value proposition of third-party logistics providers (3PLs) will get flipped: instead of logistics services enabled by technology, it’s becoming outsourced IT and business intelligence services powered by logistics. In other words, I saw technology and business intelligence/analytics becoming larger pieces of the value proposition pie. Three years later, those slices are now worth a $1B investment.

Command Alkon Introduces CONNEX

Why is digital transformation important for the construction industry? As I highlighted last December, here are some sobering statistics about the industry:

  • According to the McKinsey Global Institute, the world will need to spend $57 trillion on infrastructure by 2030 just to keep up with GDP growth. 
  • And the Global Infrastructure Hub, a G20 initiative, estimates the world will invest about $79 trillion on infrastructure projects through 2040, although the actual need is $94 trillion — a gap of $15 trillion!
  • The heavy building materials industry has to overcome the inefficiencies that today result in large projects typically taking 20 percent longer to finish than scheduled and cost up to 80 percent more than budgeted.
  • According to a McKinsey Global Institute study, the construction industry is among the least digitized, ranking 21 out of 22 industries (only Agriculture and hunting ranked lower).
  • As reported in MarketWatch, “The global construction industry has a chronic productivity problem. Over the past 20 years, productivity has grown at only 1% annually, only around one-third the rate of the world economy and only around one-quarter of the rate in manufacturing.”

Simply put, digital transformation matters because it’s the only way the HBM industry will be able to meet — both cost-effectively and on time — the large need for infrastructure investments around the world. It also matters because federal and state agencies and competitive pressures will also demand it.

To help the construction industry move up the digital transformation maturity curve, Command Alkon (a Talking Logistics sponsor) introduced CONNEX (pronounced “connects”) this week, “a next-generation vertical cloud solution designed to increase productivity levels and create unprecedented results across project performance, schedule, workforce management, and safety.” Here are some details from the press release:

As an open industry collaboration platform for construction, CONNEX connects contractors, project owners, and jobsite inspectors with their heavy building material suppliers and haulers to accomplish more together than they would on their own. Supporting shared digital transformation goals, the platform ensures stakeholders are all working with the same trustworthy information; creating transparency and removing inefficiencies.

“In an Amazon experience world, our industry can no longer depend on five-part paper forms, phone calls and faxes, disconnected systems, and difficult to access data,” said Ed Rusch, Vice President of Marketing at Command Alkon. “We’re thrilled to help lead the journey to connect the dots across enterprises, deliver software to facilitate business-critical operations, execute frictionless transactions, reveal insights that fuel success, and eliminate risk; all while helping people and businesses grow intelligently.”

Here’s what I wrote in December 2017 after attending the Command Alkon ELEVATE 2017 conference:

Command Alkon is in a unique position to help the industry move up the supply chain maturity curve. In addition to fleet visibility, the company has other supply-chain related applications, including demand and inventory management and dispatch optimization. The missing piece, and where I believe the biggest opportunity resides, is providing a network platform for suppliers, producers, contractors, and haulers to communicate and collaborate with each other in a more efficient and scalable manner.

Simply put, Command Alkon has the opportunity to become a supply chain operating network for the heavy building materials industry, which would not only provide the company with new avenues for growth, but would also help the entire HBM ecosystem reach higher levels of supply chain performance.

With CONNEX, the company has turned that opportunity into a reality. 

And with that, have a happy weekend!

Song of the Week: “You Might Think” by The Cars