Challenges and innovations in logistics: insights from an industry survey
- May 27, 2024
- 8 mins
During a webinar on April 30, 2024, logistics industry leaders gathered to discuss current challenges and innovations in the sector. Moderated by Charlie Maynard of HERE Technologies, the panel included Eric Topp from AWS, Cami Zimmer from Glympse, and Cédric Hervet from Kardinal, each bringing their respective expertise to the table.
This discussion addresses crucial topics such as visibility, the adoption of new technologies, and sustainability in an ever-evolving industry. Drawing on the results of a recent survey conducted by HERE Technologies and AWS, covering responses from nearly 900 industry professionals in the United States, United Kingdom, and Germany, the panelists explored how these issues are directly impacting field operations and what the future holds for the logistics sector.
🎙️ SPEAKERS HIGHLIGHT:
- Charlie Maynard, Sr Industry Solutions Manager at HERE Technologies. A leader among map data providers, HERE Technologies is a platform powered by data from millions of vehicles.
- Eric Topp, Worldwide Solutions & Strategy, Transportation & Logistics at AWS (Amazon Web Services). Amazon Web Services is a cloud platform with more than 240 fully featured services for compute, storage, databases, networking, analytics, artificial intelligence (AI), Internet of Things (IoT), mobile, security, hybrid, media, and application development, deployment, and management.
- Cami Zimmer, Chief Business Officer of Glympse. Glympse helps brands transform their operations through location data. Their technology, deployed on over a billion devices, collects and analyzes this data to predict and visualize the position of people, products, and assets in motion.
- Cédric Hervet, co-founder and Chief Product Officer of Kardinal. Kardinal is an innovative solutions provider that supports shippers and carriers in optimizing their transportation operations: route optimization (collection and delivery), intelligent appointment scheduling API, and territory optimization for parcel delivery.
Charlie Maynard (HERE Technologies): In your opinion, what are the most striking findings of this study?
Eric Topp (AWS):
What really struck me is that 77% of respondents identified obstacles to implementing their projects. It is interesting to see how this has changed over the past few years. Everyone is dealing with past technological decisions, silos, business processes, and a lot of internal politics.
The part of the study that particularly struck me, especially in the three years post-Covid, concerns the evolution of reasons why companies were not implementing certain measures. Previously, the lack of evidence on return on investment or lack of support from management were often the reasons. Now, it is more about volatility and data.
One key point I want to highlight is that, although all organizations have data, the real challenge lies in their ability to make it actionable. The analogy I often use to illustrate this is how many organizations manage their data similar to how children tidy their room: they pile everything haphazardly into drawers, then wonder why they cannot find what they are looking for. In my opinion, the main obstacle to effectively implementing technology is therefore structuring this data to truly make progress.
Cami Zimmer (Glympse):
What catches my attention the most is visibility in the supply chain. Today, having a clear view of one’s supply chain has become essential. Several trends are converging in this area, prompting companies to prioritize improving their visibility.
The rise of advanced technologies such as generative AI, classical AI, data analytics, automation is transforming the industrial landscape. This transformation makes it challenging to practically apply these technologies across all sectors. Furthermore, the adoption of these new technologies also entails companies addressing challenges related to privacy and data security. It is interesting to note that 36% of companies are making significant progress.
Cédric Hervet (Kardinal):
What struck me, and I agree with Eric on technology adoption, is that there seems to be something similar in terms of sustainability. To begin measuring and improving your operations, having data is essential. However, it seems that some are already questioning whether it is better to continue using existing operational models with data to improve them or to create a completely different new model.
The use of data and algorithms could radically change tomorrow’s logistics compared to what it is today. Developing new models is still in its infancy. Concerning ecology, how to actually implement green logistics is not yet clear. There are many initiatives, but traditional vehicles remain the most efficient and cost-effective means of delivery. Opting for electric vehicles or cargo bikes, although more environmentally friendly, complicates operations.
It is therefore imperative to design new models. It starts with access to data, but an additional step collectively needs to be taken. We are all bringing our technology to try to improve this situation, but it will probably take a few more years to develop a completely different and truly innovative model, rather than just adding data to an old model.
Charlie Maynard (HERE Technologies): In your opinion, what are the obstacles that limit visibility in the last mile?
Cami Zimmer (Glympse):
The last mile, costly and complex, poses numerous challenges to logistics companies. At Glimpse, we have been involved for about seven years in various sectors such as food, retail, restaurants, as well as in the steel and metals industry, to help our clients overcome these challenges. We provide security support and improve the visibility of their operations, informing, for example, who is present on a site and for how long, and providing precise routes to drivers to avoid getting lost or causing accidents.
Improving data visibility benefits the logistics process and enhances the customer experience, a crucial aspect of the last mile often underestimated. This allows companies to increase their reliability.
Cédric Hervet (Kardinal):
I believe visibility is essential, especially in the last mile, not only for the end customer but also as an excellent way to track change management within industry companies. It is very difficult to change these models.
At Kardinal, our route optimization work often significantly disrupts existing processes. We offer new routes to drivers that they are not accustomed to. Having this visibility then supports drivers in adopting new practices, particularly in the last miles. Thus, visibility is not just about adding a feature to enrich information available for the end customer; it is also a valuable tool to support change management.
Charlie Maynard (HERE Technologies): Another finding from the survey reveals that companies with better visibility are often those that more widely adopt location and mapping technologies. These technologies are used to optimize routes and ensure real-time tracking. Eric, what role do these real-time data play in route planning and ensuring timely deliveries for customers?
Eric Topp (AWS):
These data are essential, especially when considering recent developments in the last mile, particularly during and after the Covid pandemic. We have seen exponential growth in online orders and the number of parcels, further complicating delivery management. About 50% of delivery costs are concentrated in the last mile and nearly 70% of customers opt for the cheapest delivery option, thus creating almost a balance between the two parties.
To grasp the crucial importance of these data, consider that 50% of customers will turn to a competitor if deliveries are not efficient. For example, customers in South America, reaching their profitability threshold, were debating between increasing their staff or integrating new technologies. While adding staff may improve productivity to a certain extent, our study and market observations show that companies with better visibility are more inclined to use mapping technologies and location services.
This necessity becomes even more apparent when considering the complexity of possible routes in our network at Amazon, equivalent to 10 to the power of 88. For comparison, the number of visible atoms in the universe is estimated to be 10 to the power of 82. This illustrates the level of complexity we are facing today.
Charlie Maynard (HERE Technologies): Cédric, how do Kardinal teams ensure minimizing disruptions within clients' organizations while accelerating the implementation of solutions?
Cédric Hervet (Kardinal):
The first step we usually take is to use models that replicate previous practices. This approach minimizes disruptions for solution users and field operators, such as drivers, to prevent them from being too destabilized by the changes. Gradually, we alleviate system constraints to make it more optimal and easier to manage.
From our experience, this does not necessarily disrupt the client’s organization; on the contrary, sometimes it can even significantly improve it. For example, we recently used our system to improve appointment scheduling for the delivery of bulky items. Previously, our e-commerce client offered 5-hour time slots that they struggled to meet, with only an 80% success rate. After implementing Kardinal technology, they were able to increase productivity by 10 to 15%, reduce time slots to 2 hours, and successfully deliver on time in almost 100% of cases. This demonstrates that disruptions in the client’s organization can actually translate into significant improvements, beneficial for both the company and its customers.
Charlie Maynard (HERE Technologies): Cami, can you tell us how Glimpse works with its clients to address their challenges, particularly in terms of technical skills?
Cami Zimmer (Glympse):
Over the past two years, we have noticed a significant change, especially because companies have had to tighten their budgets and often lack the necessary resources. As a technology-focused company, we make our expertise available to advise our clients and help them understand that they are not alone in facing these challenges. We not only offer our software solutions but also services and consulting. We have even started taking charge of integrations ourselves to help companies deploy solutions more efficiently. This approach has allowed us to develop solutions perfectly tailored to each client’s specific challenges.
Charlie Maynard (HERE Technologies): It seems that environmental issues are not yet fully integrated by supply chain professionals. Cami, why do you think that is?
Cami Zimmer (Glympse):
This result really surprised me, more than the other findings of the study. However, I think for these companies, tackling this challenge is particularly difficult. It is complex to turn goals and strategies into real and measurable changes, especially when it comes to adapting old and well-established processes. There is still a long way to go, and it cannot be accomplished overnight. It requires constant adjustments, making the task very daunting.
Charlie Maynard (HERE Technologies): Cédric, what are the main drivers of sustainable logistics that you see among your clients?
Cédric Hervet (Kardinal):
In Europe, I would say that the main driver of change in sustainable logistics comes from new regulations adopted by municipalities to limit access of thermal vehicles to city centers to reduce pollution. These vehicles are also sources of noise pollution and traffic congestion. Thus, many major cities are seeking to restrict their circulation, although deliveries in city centers are still necessary. To meet this challenge, professionals are innovating to develop new logistical models, such as deliveries at off-peak hours, early in the morning or late at night.
We also observe a strong development of pickup points (PUDOs) and automated lockers to make these deliveries more efficient. These innovations are necessary because many European cities have old infrastructure that is not well adapted to modern logistical requirements.
The study also shows differences by age of respondents, with apparently greater motivation among young people facing these challenges, probably because they are more aware. However, interest in these issues spans all age groups. Often, it is the younger generations who create new businesses to solve these last-mile challenges, which could explain why a higher rate of young people are engaged in these issues.
Charlie Maynard (HERE Technologies): Eric, what advice would you give at AWS to companies striving to develop sustainability goals?
Eric Topp (AWS):
My advice for professionals in the logistics and transportation sector is to really focus on who you are and your role. We usually advise our clients to be realistic about their goals and choices. Promises for 2040 or 2045 may seem easy to make because of their distant deadline, but the real challenge lies in the effective implementation of these promises. In sectors like route optimization, significant results and notable return on investment can be achieved quickly. This applies both operationally and in terms of acquiring new customers through improved speed and accuracy of deliveries. To me, these initiatives are particularly relevant. Finally, I recommend adopting strategies that are consistent with your operations and truly align with your business model.
Charlie Maynard (HERE Technologies): Cédric, what problems do you help your clients solve in the field of AI and Machine Learning?
Cédric Hervet (Kardinal):
We mainly focus on solving optimization problems, seeking the best combination among billions of possibilities. As Eric pointed out, there are more possible combinations than atoms in the universe, illustrating the magnitude of the task. Our goal is to develop an algorithm capable of handling this complexity, but our work goes beyond mere computing power.
We also try to create a kind of digital twin of your field operations so that our algorithm can provide operational advice as well as strategic and tactical guidance. For example, if you are considering changing your operational model, such as determining the number of electric vehicles to purchase, restricting available time slots for your customers, or calculating costs and tariffs to apply, our algorithms can assist you. These questions are complex, and our algorithms are designed to provide operational advice while helping to solve these delicate dilemmas for your business.
Charlie Maynard (HERE Technologies): Eric, what future trends do you anticipate that could enhance supply chain operational performance?
Eric Topp (AWS):
Current trends primarily focus on AI, Machine Learning, and generative AI. These technologies have the potential to radically transform our working methods. However, many of our clients, especially in the supply chain sector, still use traditional forms of AI and have not yet adopted generative AI.
For those interested in generative AI, it is crucial to understand that data management is the main challenge. The common mistake is to want to centralize all data in one place for immediate action. In reality, it is more effective to adopt a step-by-step approach, focusing on one specific area at a time.
Currently, in the supply chain, generative AI is primarily used for advanced data functions, customer service, and complex decision-making, such as route optimization. These processes often involve complex cognitive tasks. So, I recommend choosing a specific domain as a starting point for your organization to begin innovating and progressing methodically.
Charlie Maynard (HERE Technologies): Cami, how can you help lagging companies in terms of data analytics to progress?
Cami Zimmer (Glympse):
As a software development company, we are well positioned to help other companies improve decision-making through the detailed analytics we provide. At Glimpse, we offer our clients daily, weekly, and monthly reports that they can share with their data teams or integrate into their Business Intelligence (BI) platforms.
We are currently finalizing our own data warehouse and hope to soon offer deeper analytics on the data we collect. Among the data we process are key elements such as vehicle speed and distance traveled, which are essential for tracking time spent in the field. Knowing how much time drivers spend in the field is crucial, especially if you need to ensure significant safety measures; for example, if a driver seems stranded for too long and lost, it can signal a problem. We also monitor real-time delivery delays and customer feedback. These are just a few of the many aspects we manage. In 2024, we plan to maximize the potential of our data warehouse to further strengthen our analytical capabilities.
Charlie Maynard (HERE Technologies): Could you share one last recommendation that logistics players can put into practice?
Eric Topp (AWS):
My main advice is always to assess your internal processes before adopting new technologies. In other words, implementing advanced and costly technology into inefficient processes will only make those processes more expensive and still inefficient.
Cédric Hervet (Kardinal):
The analysis of the study reveals that there is still much to be done, but it is reassuring to see that the market is aware of the challenges ahead. These challenges are not only about improving customer service or sustainability but also represent a question of survival for many companies. It is positive to see that this awareness is shared by all. Although some have already attempted to bring about changes, we find that it is not always easy, profitability not always being obvious, and internal resistances being frequent, which makes the process complex. By making these tools available on the market, we observe a great willingness from all actors who strive to overcome these significant obstacles and transform the industry.
Cami Zimmer (Glympse):
This industry has seen many upheavals in recent years, which has been quite spectacular to observe. Despite some progress, the situation remains far from ideal. Today’s discussions and the data from this study have helped me clarify our priorities. Many factors still threaten the global supply chain for years to come, and many of them are beyond our control, which can be frustrating for industry professionals.
It is crucial to remember that technology, although constantly evolving and sometimes complex, can offer real solutions. As Eric and Cédric have pointed out, when technology is applied correctly and implemented with the right partners, it can be very effective. What I appreciate in this group is our common commitment to a mutually beneficial collaboration based on teamwork. We are not just looking to sell our products. At events and trade shows, people may be reluctant to interact with software vendors, but we are here to provide real assistance. Everything we do has a global impact, and our goal is to work together to create solutions that benefit everyone.
💡 Find the webinar replay hosted by HERE Technologies and AWS, as well as the results of their study.
