With almost 6,000 visitors, 150 exhibitors and 160 speakers , ICT & Logistiek (IT and Logistics) is the Netherlands’ largest and most important logistics trade show. We had the opportunity to spend three days at the conference and speak to many logistics managers, government representatives and technology vendors in the industry. What did we learn at the event? Here are our top five takeaways.
1. The logistics space is not short of exciting technology solutions
While there is no clear leader in the software field, there is a very broad spectrum of suppliers in the logistics space: WMS vendors, TMS suppliers, consultants, etc. All of the exhibitors had compelling offerings and are heading in the same direction. Namely, enabling logistics companies to embrace a data-driven future. There is a very rich and healthy ecosystem of advisory companies, software and technology suppliers, who adhere to the same standards and enable data sharing and collaboration between their clients and their supply chain partners. But is the market ready? This brings us to the second takeaway.
2. Most logistics companies are not yet embracing new technologies
Most logistics companies we spoke with at the conference understand the importance of data and the upcoming digital transformation, but they are not moving fast enough. Solutions abound, but even the largest companies lack a clear sense of direction when it comes to adopting new technology and many have not formulated a data strategy. They know that they will have “to do something” but many of them still have no clear idea of what. A transportation executive told us that he would rather invest in hardware like new trucks and trailers, since that is something he understands, rather than in data and more advanced technology. That is worrisome. To draw an analogy: a cab driver driving the most expensive and luxurious Mercedes, does not stand a chance against an Uber driver with a Toyota Prius. There is a host of technology-driven companies that aim to disrupt logistics and transportation. Uber Freight, Convoy, Bringg & Cargomatic are just four examples. There are many more. Logistics companies that have not started thinking about a data and technology strategy might find that it will soon be too late.
Let’s consider a common issue many logistics companies are struggling with. Last-mile delivery and city distribution are two complex, cost and labor intensive distribution problems. They are not only a nuisance for the forwarder and other logistics parties involved, but also for society. Inner city roads are reaching their maximum capacity, emissions need to go down and demand for transportation is going up. There is no quick and easy solution to this. Yet, time is running out and so is the patience of regulators, other road users and municipalities. To adequately solve these problems, you require lots of processing capacity, smart software, data sharing, cooperation with competitors and meticulous planning, not to mention mathematical optimization and analytics capabilities. Only the smartest forwarders and distributors will be able to achieve this level of data handling, planning and cooperation and thus be able to go the last mile. Logistics players need to seriously consider getting in the race before they miss out.
3. There is a huge opportunity to improve collaboration in logistics
Many logistics companies act like they are stand-alone companies that are not part of an information chain or ecosystem. Therefore, they don’t have a clear view of all the other participants in their ecosystem and cannot benefit from true cooperation, like having access to data that they might need but resides in another company or a partner. They have to retrieve data by phone or by email and don’t know whether it is the latest information or the most accurate. As a result, they cannot use it to optimize their business by pooling resources, sharing cargo and joining city distribution projects. But all is not lost.
4. APIs are gaining popularity as a means to securely share data
EDI and other messaging formats still run strong in the industry and for good reasons. They are extremely reliable, robust, tested and secure. But the amount of data that can be conveyed through a message and the batch processing nature of EDI does not meet today’s need for speed. Moreover, EDI is optimized to establish one-to-one communication. Many-to-many communication, real-time collaboration and information sharing requires more than a messaging system. That’s why APIs are rapidly gaining popularity.
Like EDI, APIs enable information sharing between applications and programs in a structured and documented way. But they offer more benefits: real-time communications, machine-to-machine communication, the ability to process richer data formats and a much higher level of control over who gets access to what data and for which timespan. If you want to know more about these aspects of data sharing, you might want to check out iSHARE. iSHARE offers an agreement framework for data sharing and takes away the burden of managing identity and security agreements between many parties.
5. A data project is more than just a data project
A successfully executed data or technology project will make your organization smarter and more efficient. It will also help you maximize asset utilization. But for any data project to be successful, you have to prepare your organization and your data. Here are the must-haves:
- A vision: what kind of company do we want to be in a few years from now?
- A strategy: How are we going to achieve this?
- Alignment: what data do we need and where can we find it in the organization and ecosystem?
- Technical capabilities where and how do we store the data?
- Analytical capabilities: how do we clean, engineer, combine and analyze the data to get the information we need?
- A compliance and governance structure: who has access to the data, how do we handle a data breach and how do we organize our three lines of defense?
To become analytically mature, a company must be well-organized. Data analytics requires sound thinking, organizing, planning, assigning responsibilities, devising procedures and checking whether these procedures work in practice and should be improved (not necessarily in this order by the way). Following this approach, you also become a learning company.
There are excellent technology, software and knowledge providers in the logistics space. They all have more or less the same compass bearing. Yet logistics companies are still lagging behind. They know that they need to adapt but are not acting fast enough. Some of the most pressing questions the industry is facing can only be solved by applying analytics, data sharing and cooperation.
Where do you think the logistics industry is heading?
Did you attend the conference as well? Interested in learning more about this topic? We would love to hear your thoughts on analytics and cooperation in the logistics industry. Contact Elsbeth Bodde or Marnix Vermaas for a chat.