Remember when we took supply chains for granted? Then came the pandemic. The frenzied run on toilet paper. The giant container ship blocking the Suez Canal. The flotilla of ships waiting to unload off the port of Long Beach. The on-going shortage of long-haul truck drivers. Well, you get the idea.
Some logistics and supply chain managers say that conditions would be even worse if these functions weren’t supported by emerging technology that is transforming logistics management.
The technology is all about data. Big data.
Logistics and supply chain managers these days are harnessing massive amounts of data: collecting it, tracking it, analyzing it and then using it to make better business decisions. And just how big is this big data we’re talking about when it comes to logistics and supply chains?
One local example is Essentia Health. As Brian Zuck, Essentia’s vice president of supply chain, said in a recent interview with BusinessNorth, he can track more than “20 million individual products on our shelves on any given day.”
For the Duluth-based, regional healthcare system, which serves Minnesota, Wisconsin and North Dakota and includes more than 14,000 employees at 14 hospitals and 71 clinics, that 20 million can mean anything from orthopedic and spinal implants to trash can liners and copy paper. In other words, “Just about anything that can be used in the daily operation within a healthcare setting,” Zuck said. Clinics and hospitals are supplied – and replenished – from two Essentia warehouses, one in Duluth, one in Fargo.
Zuck – and his peers who work on the supply chain side of logistics in a variety of industries – along with those who work on the shipping and freight side of logistics, are leveraging technology like never before, said Daniel Rust, associate professor of transportation and logistics in the School of Business and Economics at the University of Wisconsin-Superior.
“Technology is an increasingly vital aspect of transportation and logistics,” Rust said. “Logistics management is in the midst of a technological revolution … It’s all about the data. How to capture it, leverage it, use it to your full advantage.”
Managing the chain at Essentia
Supply chain management has made a shift from “boots on the ground to boots behind the desk at a computer,” said Essentia’s Zuck.
Robotic process automation (RPA), which involves, among other tasks, robots going through the warehouse aisles and filling supply orders; radio frequency identification (RFID) tags; better overall package tracking; and more automation generally at the warehouse, are just a few examples of the use of technology at those distribution points. This means there are fewer “boots” at the warehouse and more “boots” in the office, Zuck said. Indeed, in the last three years, Essentia has added about 25 employees to supply chain management positions who are dedicated to analytics and software-related work.
Artificial intelligence (AI) is playing a role on both of those fronts – at the warehouse and at the office. AI supports the RPA systems at the warehouse, of course, but, at the office, it also is beginning to “crack into how we predict the future” regarding needed supplies and inventory, Zuck said.
Remember those 20 million items Zuck said he keeps track of on any given day? “That’s really difficult for one person to go through a spreadsheet” of that size, so you “need a bot or AI” to do that work. Collecting and synthesizing all of that data, with the help of AI, allows Essentia’s supply chain managers to create so-called predictive data, or predictive analytics, to show them what will be needed in the coming days and months.
Just how key is this tech? Consider the pandemic, Zuck said. “If I think about my inventory levels prior to the pandemic, what I thought would have been a 30- or 60-day supply, once the pandemic hit, that could have been a two-day supply. All of the numbers in the past were no good for the pandemic. So that’s why we really have to look to the future to be more predictive and use these predictive analytics.”
Rust of UWS agreed. “The goal is to get to predictive logistics. In other words, you’ll be able to anticipate what will be needed and where it will be needed.” He cited Amazon’s use of this technology as an example. “They are pre-positioning products in certain markets before anyone orders anything. The products are all ready to go, so it enables much faster delivery time.”
Essentia, of course, isn’t the only organization deploying these supply chain and logistics folks. As Rust pointed out, the logistics field is one of the fastest growing labor markets in the country. The U.S. Bureau of Labor and Statistics recently reported that employment for logisticians is projected to grow 30% from 2020 to 2030, much faster than for all other occupations. Plus, logistics professionals work in nearly every industry.
The Future of freight
On the trucking side, technology has been “quite a game changer,” especially telematics in trucks, Rust said. “The truck is now basically one big moving computer.” So, with the help of internet connectivity, global positioning systems, cloud-based storage capabilities, on-board cameras and a variety of sensors everywhere on the truck, a logistics manager back at the office can keep track of a vast list of items. What is the truck’s location? Does the truck need maintenance? Is the trailer empty or full? If it’s a refrigerated truck, is the temperature too warm or too cold? How’s the fuel economy?
Once again, it involves the collection and management of data, Rust said. “It is an eco-system of sensors and data creation, and it’s used in all forms of transportation and shipping: trucking, air, rail, inter-modal, maritime, in warehouses and at ports.”
Vern Bryce, general manager of Superior-based Dave Evans Transports, said he especially likes how the trucks’ telematics can be connected with his company’s dispatching program, so the trucks can be tied back to a logistics hub. The logistics software can then “provide a trail of events … when we dispatch a driver. When the load goes on to the driver and truck. Then the pay can be set up behind the scenes … it’s usually paid by the mile … then it tracks while the driver is hauling it, then when the load is delivered. Then that all goes to the billing department, which takes care of billing the customer and paying the driver, and it continues on to bill collections if necessary.”
Truck maintenance is yet another way data supports logistics, Bryce said. Replacing a part? “Like brakes, for example. We do brakes probably every three or four years, so when you go to do the brakes again you can look up all of the part numbers. It’s a huge time saver.” Bringing in and deploying the technology was a challenge. “But now that people can see what all of this data collection can do, they like it.”
Ultimately, the use of technology and data is vital. Carl Svendsen, chief strategy officer for Superior-based Halvor Lines, may have summed it up best. “It’s a fire hose of data … data from (truck) cameras, speed data, position data from the trucks, drivers’ hours of service, live market trends, and so on … our ability to capture and interpret that data and make good business decisions based on the numbers is one of the keys to our business.”
