In the second instalment of a two-part interview, Inna Kuznetsova (IK), President and Chief Operating Officer of the recently acquired INTTRA, has spoken to Port Technology about the future of supply chain logistics.
In this piece, Kuznetsova discusses the key challenges facing the industry today, and how standardization could build towards a more intelligent supply chain.
Read the first part of Port Technology's exclusive interview with Inna Kuznetsova on INTTRA's takeover by E2open
PTI: What other challenges are facing businesses operating within the logistics and supply chain sector?
IK: I think that companies working in the supply chain have a few different issues, and one of those is access to information.
Legacy systems and manual processes have exacerbated the fragmentation of supply chain management.
Even in shipping, it is not unusual for a container to go through the hands of five or six companies on its way from manufacturing to the destination.
These companies will have different levels of digitalisation, different standards, and may not be able to exchange data in an efficient manner.
This may account for so-called black holes, where you can see the container move through certain stages before disappearing and re-emerging later at the customer's door.
I think when you start envisioning the future, these issues create a problem. An intelligent supply chain is predictive, flexible and reactive to changes, but building such a system requires several steps.
You have to all your processes digitalised, and then your data sources have to be collected and working with each other. Once you have that connectivity, you can apply a variety of machine learning tools to start creating an intelligent supply chain.
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Today we are seeing the market reach a tipping point for digitalisation, with over half of our customers performing their routine processes digitally, as well digitalising their supply chain.
The main challenge then relates to connecting data. A lack of standards gets in the way of cooperation, such as containers with IoT tags travelling on the ship of a different carrier not being able to communicate with its server.
Certain standards for digital bills of lading, IoT and communication between devices would also help the entire shipping community to advance.
PTI: What kind of standards need to be established?
IK: The most important thing to look for is the neutrality of standards: they need to be developed by the industry for the industry.
It is vital for a variety of companies to work together and decide what is best for the community, not a single carrier or IT company trying to dictate the market.
The areas that require standardization are related to data access again. Bills of lading, for instance, present a big issue today, since every carrier has a different method for this.
Standardization was a key topic of discussion at this year's Smart Ports and Supply Chain Technologies Conference: read Port Technology's Day Two Review
Another area is electronic access to contractual prices, which requires a certain level of standardisation. It is important to remember that standardisation is not the same as transparency, and we should still allow for individual carriers and shippers to strike a contract that benefits themselves.
Being able to access rates electronically without manual input, while allowing carriers to preserve their unique way of pricing services, is another one of the main challenges facing the industry today.
PTI: Is there a dilemma in the industry between openness and security?
IK: There are lots of areas that require standardisation, and this includes security.
There is much discussion about blockchain pilots, but none have been scaled significantly. Part of the reason for this is security and identity management.
When you talk about blockchain-based bitcoin projects, you can maintain the anonymity of the payer. In the logistics world though, you have to know the customer and carry out checks.
Inna Kuznetsova discusses how ocean shipping can prepare for the future by evolving cybersecurity in a recent Port Technology technical paper
In terms of who decides whether someone is allowed on the network, and who provides permission for data access, this is a really important question that the shipping world needs to answer.
Blockchain solutions with relatively easy access may open the floodgates, but could also create additional challenges.
The big challenge for IT systems is ensuring ease of access as well as maintaining proper security controls.
PTI: What technologies will be implemented to develop data analytics and machine learning?
IK: We need to collect the data from a variety of different systems to make a difference. There is access to operational data only, or financial data only, for those who make decisions, but we can only optimize a big system at the expense of sub-systems.
You can optimize financial performance or operational performance, but in some cases, you have to choose one or the other.
For example, you can attempt to achieve the shortest retention demurrage time, or the cheapest retention demurrage time, depending on how you want to direct your resources and what you wish to optimize.
Another ambition is to connect financial and operational data on the same system, as well as data from supply chain businesses and manufacturers.
Everyone needs to plan today for the requirements of shipping tomorrow, in order to make the entire supply chain more efficient.
Inna Kuznetsova is President and Chief Operating Officer of INTTRA, leading sales, service delivery, marketing, strategic alliances, product management, IT infrastructure and software development.