Digitalization in the Real-World, Part 1
At our recent customer conference Blue Yonder ICON, we heard first-hand the chronic and new challenges supply chain, logistics, and commerce executives are facing and their strategies and implementations to realize the next visions. This is Part 1 of a multiple part series to explore their stories (Read Part 2).
The extreme volatility of the last two years, which continues today, has starkly demonstrated the need for supply chain and logistics professionals to monitor real-time conditions across the extended end-to-end value chain, recognize and broadly communicate any changes, and respond immediately in a synchronized, orchestrated manner. The bad news is that older technology solutions and outdated workflows, based on manual handoffs and organizational siloes, no longer support the necessary level of speed and collaboration required by the current environment.
Supply Chain Solutions That Help Fulfill Your Potential
There is good news, however. A new generation of advanced solutions, enabled by artificial intelligence (AI) and machine learning (ML), has created new supply chain models and new work processes that are purpose-built for today’s extreme uncertainty. These intelligent, strategy-driven solutions help the entire end-to-end value chain enact a fast, coordinated response not only across functions but also across multiple trading partners.
These advanced solutions support real-time monitoring and the ingestion of incredible volumes of real-time supply chain data, which allows logistics teams and other stakeholders to see disruptions at the earliest possible opportunity. Just as important, they connect the end-to-end value chain digitally, so all partners can participate in a shared response. Supported by best-in-class optimization engines that exceed human cognition, they consider every possible response to the disruption, weigh trade-offs and multiple priorities, and — often autonomously — execute the right strategic response across warehouses, fleets and other logistics assets.
Real-time, end-to-end connectivity is the key to truly mitigating disruptions and ensuring that the response is both strategic and profitable. It creates visibility, transparency and accountability across functions and trading partners. The supply chain and logistics teams are not left to struggle alone to mitigate disruptions, but instead act as part of a unified effort to achieve the best possible service and cost outcome for all trading partners.
This might sound too good to be true, especially to companies still using outdated tools and manual processes. And it’s a far cry from the panicked, on-the fly decisions many logistics professionals were making in 2020 and 2021 — which, unfortunately, were not always profitable. But I can assure you that every day the world’s leading logistics teams are relying on advanced AI- and ML-enabled solutions to maximize both service levels and profit margins, even in the face of the most extreme volatility.
I’ve seen firsthand the very different levels of success companies have achieved over the last two years, which is largely based on the ability of their technology solutions and work processes to combat extreme uncertainty in market demand, available resources and external conditions.
Digitalization Through the Eyes of Our Customers
Today’s supply chain and logistics teams are operating in an environment characterized by uncertainty on three fronts:
- Customers’ needs and expectations are constantly changing.
- The available talent pool of drivers, warehouse associates and other employees is small, which creates staffing volatility.
- Their operating conditions are extremely challenging and unpredictable, from skyrocketing fuel costs and tariffs to blocked shipping lanes and ongoing geo-political conflict.
Minute by minute, logistics operations are asking themselves: What do customers want? Do I have the resources to meet their needs? And can I do so profitably and sustainably?
At this year’s Blue Yonder ICON, many companies shared their own experiences with digitalization and end-to-end connectivity. Whatever their industry, and no matter their unique logistics model, these businesses have achieved some truly impressive results under some incredibly tough conditions.
Many manufacturers, retailers, and third-party logistics providers are benefitting from digitized logistics and supply chain. With nearly $21.3 billion in revenues, Bayer Crop Science distributes agricultural products to customers around the world. Johnny Ivanyi, Global Head of Distribution Operation, discussed at ICON how the company is using Blue Yonder’s advanced TMS to achieve real-time inventory visibility for both warehousing and shipment tracking across its extended carrier network [watch the video here]. Advanced analytics help Bayer Crop Science identify exceptions, make fact-based decisions and respond rapidly. Across the supply chain, increased connectivity with partners is helping to build trust and strengthen relationships. Automation and greater process efficiency are improving reliability, customer service levels, sustainability, and cost-to-serve.
Automated bidding events, improved load planning, route optimization, and other transportation enhancements support higher service at a lower cost, with a reduced environmental impact. Across 65 countries, Bayer Crop Science is standardizing its processes and adopting best practices. The company is targeting a number of benefits as a result of its digital logistics initiative, including a 3% annual savings in its transportation spend.
Greater Resilience: The Real Value of Connectivity
After two years — and counting — of supply chain volatility, it’s clear that disruption is here to stay. Increasingly, success depends on companies’ ability to manage, and even master, ongoing exceptions and unexpected surprises. More stories will be discussed soon in this blog series. In the meantime: