Are shippers behind the 'digital' curve?

William B. Cassidy, Senior Editor | Dec 07, 2015 5:07PM EST

The logistics industry is on the edge of a digital revolution that could radically transform shipping, and Greg Smith fears shippers and transport operators aren’t ready.

Those who don’t plan now and adapt quickly could find themselves falling far behind competitors, he warned, whether shippers, carriers or logistics intermediaries.

“We are at a critical point in the juncture of this journey, this technology revolution,” Smith, an enterprise consultant with decades of supply chain experience, said during a JOC.com webcast.

New technologies, from machine-to-machine communications and the Internet of Things to the “shared” economy, are emerging that could make shipping and supply chains more efficient.

Shippers, logistics operators and carriers are collecting unprecedented amounts of data, and recognize that the ability to effectively analyze that “Big Data” is critical to their success.

But Big Data isn’t necessarily “smart” data, and many companies are still saddled with “dumb” or “disconnected” supply chain or distribution processes, the legacy of past decades.

“We already have the data, but we need to start using it,” said Smith, who works for Indian software and technology company Tech Mahindra. “So far, we’re laggards in that area.”

In a recent survey, Smith said, 97 percent of shippers agreed improved data-based decision making is essential to their future success. However, only 22 percent of the companies surveyed had Big Data or business analytics initiatives in the works, he said.

That suggests much of the work in data-driven business analytics in logistics and transportation is being done by larger companies with deep pockets and access to technology.

“Margins are tight in this business, and it’s hard to convince management to invest money in analyzing data,” Smith said. “Yet everybody agrees that’s how we’re going to improve.”

And although supply chain visibility has been the Holy Grail of logistics for years, “only 9 percent said they have complete visibility into their supply chains,” Smith said.

Of that number, Smith suspects few shippers have true end-to-end supply chain visibility. “Visibility from raw materials sourcing to the end consumer, almost nobody has that,” he said.

“If you had true end-to-end visibility, you’d have benefits for other people in that supply chain and they’d have benefits for you,” he said. “That’s the big promise of the digital logistics era.”

Businesses can and should take small steps toward Big Data, Smith said in the Dec. 2 webcast, sponsored by SMC3. The webcast touched on topics Smith will discuss at SMC3’s 2016 Jumpstart conference, which will be held in Atlanta Jan. 18-20.

Large scale business analytics projects require integration of internal data stored in separate departmental “silos” or integration with the data systems of a second or third party, he said.

However, “You don’t have to wait until you’ve got an integrated enterprise-wide system.”

Integrating disparate silos of data and different systems, even just within a company, is often a major challenge, but open software platforms are making that an easier task.

We need to put that data on a common footing so we can analyze it and convert it into information,” Smith said. “We then can relate one thing to another and redefine problems, transform information into knowledge, and then into action. This is our challenge.”