Enterprises must now position themselves at the core of next-generation supply value chains and multimodal transportation ecosystems, suggests Abhijit Sengupta, Director and Head of Business (India and Southeast Asia), HERE Technologies
The blocking of the Suez Canal by Ever Given’s massive container ship in March this year shed light on some of the challenges faced within our global supply chain sector. From shipment delays and corporate losses, outdated procedures to container imbalances and regulatory bottlenecks, the six-day blockage emphasised the need for companies to rethink their supply chain models and transform existing systems by filling in gaps and investing in cutting-edge technologies. Businesses have traditionally used ‘single mode’ supply networks, which include moving items through a supply chain using only one mode of transportation.
It was most effective with linear value chains supported by local suppliers who are capable of addressing short lead times and just-in-time deliveries. However, following a tumultuous year that revealed the flaws in global supply chains, businesses have begun to doubt the versatility of this ‘one size fits all’ strategy. Business leaders today require a differentiated supply chain management strategy to succeed and thrive. And that is what makes the entry of multimodal supply chains a possibility. Multimodal supply chains, as the name suggests, refer to the interconnection of transportation modalities.
Multimodal Supply Chains
Such chains span sea, rail, road and air to produce a seamless end-to-end transport from source to last mile, all coordinated under a single carrier. To move the freight, the carrier uses its own network of subcontractors, which helps businesses diversify shipping risks while increasing operational efficiencies. One of the advantages of implementing a multimodal supply chain is cost and time savings. There is a single point of contact for supply chain management, which reduces reliance on various vendors and partners. It provides more efficient communication and collaboration, avoiding the need for numerous emails and phone calls to resolve various issues.
These could pertain to load delays, asset loss, or container damage. It also employs best green practices by encouraging businesses to use sustainable freight carriers and fuel-saving technology when transporting goods, resulting in lower carbon emissions. However, given that supply chains have a crucial role that impacts the financial performance of companies in today’s connected world, logistic companies still require end-to-end visibility for their customers. While multimodal supply chains have numerous advantages, they have their own set of disadvantages. Asset tracking in a multimodal supply chain, for example, is difficult due to foreign compliance and rules.
A logistics’ provider needs significant expertise across modes of transportation – air, water, rail, and roadways. It also further complicates things when some firms–particularly those in retail–offer customers the option to track and trace their purchases as their parcels are being delivered to them. Furthermore, the industry’s heavy reliance on analogue procedures such as data entry and storage has resulted in a fragmented supply chain ecosystem that has brought about inefficiencies, and is making digitisation challenging. As a result, businesses must prepare to employ technology tools such as location intelligence to help enhance collaboration and improve visibility so that they can anticipate and react to supply chain issues quickly.
Multimodal Visibility
In an ever-changing market where same-day delivery can make or break a firm, location technology might just be the solution to help businesses transform their entire supply chain. With location intelligence, companies will benefit from visual maps that provide end-to-end insight and transparency of shipments across complex multimodal supply chain networks. Real-time tools and APIs provide insights into traffic patterns, weather, and road and port conditions to find assets anywhere – both outdoor and indoor. Analysing traffic flows based on real-time and historical patterns will also help fleet drivers ensure safety and timely deliveries.
Location-based blockchain technology is also used to establish virtual waiting systems to secure delivery slots, track real-time demand spikes and assess the feasibility of expanding distribution centres or serving additional regions. Using a thorough simulation model of their value chains, known as digital twins, businesses can explore ‘what if’ scenarios to predict supply chain dynamics and devise a strategy for dealing with any abnormalities that may arise. Leverage and analysing data from these digital doppelgangers to create visualisations has the power to enable businesses to learn more about their inventory and modalities to re-plan, and re-route and minimise operation inefficiencies.
For instance, geo-trackers and indoor positioning offer successful warehouse management by creating floor-by-floor immersive 3D maps of factories, allowing for the most efficient inventory distribution, sorting and cross-docking procedures, among other things. It also ensures that capacities are distributed wisely among departments and that any unexpected spikes in consumer demands are met. Sensor technology based on the Internet of Things (IoT) could enable the tracing of products and employees within a warehouse or factory environment, saving valuable energy and resources that would otherwise be spent to track out a ‘lost’ resource. To build efficient first-to-last mile delivery routes, supply chain managers can tap on route various planning tools.
These include GPS software, isoline routing (the region from a given place that can be reached by driving for a certain time or distance), and customised geo-fences. This saves travel time, distance, and stop-start traffic and double back on previously travelled routes, saving money on gas and tolls. Enterprises must now position themselves at the core of next-generation supply value chains and multimodal transportation ecosystems. Multimodal supply chains infused with smart technologies will only aid organisations to address many of the logistics and supply chain challenges, as well as adapt to ever-changing industry demands. The result: gaining competitive advantage, long-term profitability and supply chain resiliency.