Why the COVID-19 pandemic is forcing the global supply chain to digitize

IoT sensors are changing the way goods are shipped and tracked.

Why the COVID-19 pandemic is forcing the global supply chain to digitize

TechRepublic's Karen Roby and Glenn Jones of Blume Global discussed how the COVID-19 pandemic has changed the global supply chain. The following is an edited transcript of their conversation.

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Glenn Jones: The markets in China are opening back up, the manufacturing in China, and so they're starting to build goods, laptops, desktops, mobile phones, and where that would've normally come across the ocean, and the ocean carriers would've been carrying the cargo, a lot of that, especially personal protection equipment, is being shipped via air to get it back into the US and European markets as quickly as possible. A lot of that's got to be enabled, and a lot of changes are happening. The digital world is really helping to enable that change, very quickly, and enable the air cargo to happen.

Karen Roby: This is an industry that up until now has been heavily reliant on paper.

Glenn Jones: The freight market has always been paper. I mean, FedEx is the exception, because you can sign on glass, but that entire market operates with a thing called a bill of lading, and those things are signed as a proof of delivery, and a lot of times, they're carried back to the office, and they're scanned, and then that allows the trucking company, or the ocean carrier, or air freight forwarder, to get invoiced. And so, with everybody working remote now, it's awful hard to go into an office and scan things, and so, the newer technologies enable electronic signatures, enable taking pictures with OCR, to be able to provide that kind of information back, so that they can get closure on the shipment, and closure on the invoicing. It's very important to transition into a digital environment, and this has been a big push. We're seeing a lot of RFPs coming in right now, for companies needing this kind of capability very quickly.

Karen Roby: So much tech is at play. Glenn, talk about the Internet of Things (IoT) devices being used, the sensors etc.

Glenn Jones: IoT devices, and the sensor devices, have become very important in the supply chain these days. Certainly, the trucking companies and even the ocean carriers have a way to track digitally, through fleet management, or other types of IoT devices, but we're starting to see more and more of the companies putting sensors on containers, not just the trucks. So now, you can actually track it--the container or the cargo inside the container--because they'll put IoT sensors on the actual cargo. And now, you can get the health of that cargo. If it's a reefer and you're shipping fish, then you will see, what is the temperature? How much did it vary? Did it stay within tolerance? And you can get alerts. If, for example, it's going across the ocean, and you see that the fish was spoiled, there's nothing you can do about that, but you can put cargo on an aircraft, and ship it over that way, to try to make up for whatever may have been lost, via the ocean.

We're seeing a lot more. Two years ago, we were seeing a lot of prototypes. But the price point for these sensors was too high at that point. So, they weren't able to be mass laid out across all the industry. But now, the price point has come down, the sensors are more available, there's different ways to arrange these kinds of sensors, so we're seeing a lot of that type of technology being deployed today. We pull that into our platform, and we process it, and we provide different ways to look at that kind of information, and make sure that the health of the cargo is good, and that the cargo really did make it to its destination.

Karen Roby: E-commerce has really changed the way the supply chain works. Expand on that a bit.

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Glenn Jones: We call it the Amazon effect, who's really driving a lot of digitization. In the international freight world, it's no longer good to plan 37 days in advance that I need hammers in Home Depot in Atlanta. And, you now have to be much more agile, and much more dynamic. And so, the newer technologies enable you to make more decisions on the fly. We say, you can make new decisions at every note.

I'll continue to use my example of hammers. Whenever the hammers land in the port of Los Angeles, you can now make another decision. We had a hurricane, maybe in Texas, along the coast, Corpus Christi, or something, and the hammers were originally destined for Atlanta. We can not only switch and make that destination Corpus Christi, but we can also airfreight it if we need to. The ability to digitize, and the ability to change these kinds of transportations on the fly are very important to meeting [needs]. And, certainly it applies to COVID-19, and trying to get PPE to the right place in a timely manner. Ventilators, the same thing.

Karen Roby: If you're looking six months to a year down the road, how does that change how you all go about your business, in terms of consulting, and the global supply chain in general, how does that change things?

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Glenn Jones: We were already very much enabled to work remotely. Everybody has a laptop, and we were global. We have development centers in India, we have development centers, and we're kind of spread out. So, it wasn't huge for us. We've learned how to do whiteboarding and things like that, on the board. And that's really important: The communication channels, and the tools used for communication, where we would have gone on a whiteboard before, we no longer do that, we do that, actually, online.

I think now that we've done that, we're growing fairly quickly, and we're actually considering, OK, let's not really extend our office space and add a whole new floor, instead, let's have a remote workforce, and have areas where we can come into the office and make decisions, but then we can go back to our homes, and actually do the work. And so, it changed the lifestyle. I think a lot of companies are coming to this same conclusion, that they can, now that they've experienced and they've enabled their workforce to work remotely, it'll literally change the office spaces, and how office spaces are used, and where, actually, people do most of the work.

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Karen Roby: Wrapping up here, Glenn, with the folks that you guys work with, in, obviously, such an international presence, what would you say a year from now, 18 months from now? How do you think things will be different, than they are right at this moment?

Glenn Jones: For our customers' perspective, the transition to digital will be significant. I mean, this has been a huge rallying call to say, and like I said, RFPs are coming out, so the world will be much more digital at that time, the supply chain world. I don't mean just logistics, but logistics is kind of foundational to a lot of the other supply chain mechanisms. And, having things digital will make a lot of efficiencies, it will reduce costs, it will allow other companies to compete against Amazon, for example, in the Amazon effect, because they will be able to make much more dynamic decisions.

We say Amazon's vertically integrated, they actually lease their own vessels now. They lease their own airplanes. And so, they can do that kind of stuff, but it will help other companies stay on par with Amazon, without having to have all of those resources. I know that there's a lot of investment by the freight forwarders, and the ocean carriers, and the air cargo carriers, to really enable those kinds of things to happen. FedEx is, UPS is

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TechRepublic's Karen Roby and Glenn Jones of Blume Global discussed how the COVID-19 pandemic has changed the global supply chain.

Image: Mackenzie Burke