Kevin Krükis is the Managing Director NIC-Place, a neutral data intermediator that was acquired by supply chain visibility giant FourKites in 2022.
In this Trans.INFO interview, he explains the key role that data can play in forming a resilient supply chain.
Natalia Jakubowska, Trans.iNFO: First off Kevin, how would you define “resilience”? What do you understand by the term in a supply chain context?
A resilient supply chain is defined by its ability to withstand disruptions and limit the effects of those disruptions. At FourKites, we provide visibility to precisely track the current location of goods and predict disruptions to derive actionable recommendations.
Why did the topic of supply chain resilience really only come into focus during the pandemic? Various disruptions to the supply chain have always existed. Had the issue been underestimated by companies?
This is due to several reasons and factors. On one hand, digitalisation has become increasingly important in recent years. A few years ago, the level of digitalisation was nowhere near what it is today, and the power of data has increased accordingly.
On the other hand, the pandemic is a prime example of why monitoring supply chains is crucial. At that time, supermarket shelves were empty, and goods were unavailable. The Suez Canal incident has also emphasised the vulnerability of supply chains. Society has recognised that supply chains can be affected by a wide variety of factors.
Given the increasing complexity and disruptions in our supply chains, it is no longer enough to know where products are in transit. Shippers must anticipate and mitigate the impact of disruptions and delays, whether due to inclement weather, port closures, overloaded distribution centers, or other factors.
Have companies become more resilient since then, or are they only resilient in theory?
I would say that companies have definitely paid more attention to the issue. There is still room for improvement in some companies, especially in practice. Many companies continue to operate in data silos, without considering the supply chain as a whole. For example, telematics data is often integrated into the company without being linked across departments, missing the connection to the warehouse or inventory. There is still much optimisation needed for a consistent supply chain.
One of the key benefits of sharing supply chain data across systems and teams is that companies can gain insights, identify disruptions before they occur, streamline operations, and improve customer experiences.
And why is it that supply chains are not viewed holistically? In terms of thinking?
Good question. I think this has historical background. I will explain using an example of a classic transport route.
When goods are transported by road with a trailer or by rail with a wagon, a specific department in the company handles this. However, this only covers part of the supply chain. Another department of the company deals with CO2 issues or warehouse management systems. The systems are gradually started up in parallel, and ultimately, companies notice breaks in the holistic system.
So how should companies properly approach the issue of resilience?
First, identify the pain points in the company. Where is there room for improvement? Visibility starts with data.
It’s challenging to make informed decisions when you don’t know where things are in your organisation or their status. The first step towards true transparency is to gather all the data points available within your network. This can include truck and trailer telematics, temperature and location measurements, port and terminal status updates, and other sources. Data sources vary depending on the industry and company.
Once you have the data, you can start turning it into actionable insights. These include estimated time of arrival (ETA), congestion and delay rates, and real-time temperature warnings. Simplify the workload by reducing time-consuming manual processes such as telephone or email to save resources and money.
Analyse possible digitalisation processes: What systems are there in the company? Are these already connected to each other? Finally, look at the sources from which the data comes – from OMS, TMS, or warehouse management systems – to link them consistently.
What challenges do companies still face when they want to strengthen resilience?
In addition to identifying vulnerabilities, companies should focus strongly on the project scope to ensure solutions are implemented as intended.
Theory and practice often diverge, leading to unforeseen technical difficulties. Keeping an eye on the project scope prevents the divergence of objectives and reality.
Are 100% resilient supply chains possible, or is this just a building of ideas?
100% resilient supply chains are wishful thinking. A maximum resilience level of 90% is realistic. This is a very good value. System landscapes and the logistics market itself are very fragmented, making 100% resilience not possible.
We already mentioned the corona pandemic and the Suez Canal incident at the beginning of the conversation. Can insights and data be extrapolated from such events to protect against similar events in the future?
Yes, of course. Natural disasters or pandemics are serious events but can accelerate certain logistics processes. Monitoring supply chains in real time and making predictions about events help avoid unfavorable positions, such as empty shelves in supermarkets. Our company also noticed increased demand for visibility and transparency during the Corona pandemic.
If we’ve learned anything over the last three years, it’s that the transportation industry is constantly changing. Weather, wars, political situations, and changing economic conditions are just a few of the many situations that affect our supply chains. It’s impossible to predict what comes next, but leaders can take steps to ensure their supply chains remain resilient when faced with the next volatile situation.
Is the demand for visibility still there, or was the pandemic period growth just temporary hype?
No, the demand still exists and has been consistently high since the Corona pandemic. The majority of companies intensively deal with the topics of supply chains and forecasts. Many also take practical steps, seeking a solution provider like FourKites, to cover the supply chain holistically and provide transparency for the company’s needs and customer requirements.
You just mentioned the topic of forecasts. What can forecasting tools do and what can they not do? Where are the limits? For example, if a pandemic occurs, can you predict how long it will last?
Natural disasters and pandemics are challenging to predict. Let me explain this with an example. If the forecast relates to the transport of goods and incorporates real-time data, such as weather, traffic data, and historical data, it can accurately predict arrival times.
Prof. Dr. Werner Gleißner, Dipl. Wirtsch.-Ing. from the FutureValue Group AG, claimed in a 2020 post that the Corona crisis was not really a black swan but rather an extreme risk that was entirely predictable. As I said, predicting a pandemic is difficult. It may be possible to plan certain scenarios based on existing data and derive forecasts, but making a precise prediction is challenging.
Are there different forecasting methods? What does such a forecasting process look like in practice?
A real-time transportation visibility solution can tell you where your shipment is currently located, and the AI built into this solution can provide a highly accurate arrival time. The best real-time transportation solutions must be connected to warehousing, inventory, fulfillment, and order management.
How do you ensure that this data is high quality?
There are several ways. On one hand, we rely on our own network and historical data. If we drive the same route from A to B repeatedly and receive data 200,000 times, the algorithm will naturally improve.
We work with real-time data and live data from GPS and telematics systems or data from our partners, which we integrate. Thousands of carriers are connected to our system, providing billions of sensor points worldwide that also impact shipping and aviation.
To ensure the validity of this data, we use strict validation processes.
How will digital supply chains develop in the future? How will supply chain forecasting and resilience be evaluated?
I believe two topics will play a role: networking and data.
There will be an overarching supply chain in the future. Companies will break down data silos, working across departments and the entire company. This will create connections and interfaces between systems. Additionally, companies will focus more on generating added value from data.