An increasing number of startups are creating predictive platforms to increase the visibility of the supply chain. Why is it so important and how do such platforms work?
It is difficult to control something that is barely visible, or not visible at all. This applies, for example, to individual processes within the supply chains. Digital supply chains are the subject of intense discussion, but in practice, they are still a rarity (supply chain management has in fact changed little). Meanwhile, the pressure for visibility and speed in logistics is doing its job. Reality changes faster than before, forcing operators to handle more information.
FourKites and ClearMetal are names known only to a few in Europe so far. But this may change soon. These and similar American-based startups focus on creating solutions to increase the visibility of supply chains. Logistics professionals will increasingly need this kind of solutions.
Knowledge of the current status and the ability to act immediately and effectively in the event of possible supply disruptions have become key for competitive advantage.
By offering a thorough overview of all operations, you can ensure full control and consequently maintain full continuity of operations and correct execution of orders. The use of both own and contracted logistics services can become more efficient. By the way, there is a reduction in costs as a result of, for example, less need for buffer stocks, staff in the distribution centre or a helpline.
FourKites is a predictive supply chain visibility platform that uses, for example, a proprietary algorithm to calculate shipment arrival times. This allows customers to better plan their activities and reduce operating costs. In fact, FourKites controls the network of more than four million GPS/ELD devices, covering the activities related to the distribution of goods in the road, rail or intermodal transport. It is also used by companies providing last-mile delivery, or more broadly, parcel delivery services.
The services of FourKites are used by 20 food companies, e.g. Walmart. Over 600,000 shipments are tracked every day. The operations can be viewed in real-time and the tracking algorithm takes into account many key data such as weather forecasts and peak loads. It is on this basis that exact delivery dates can be generated, for example.
The American start-up is doing better and better in Europe. It entered this market three years ago (it cooperates with over a hundred telecommunication and telematics service providers), and now it has opened a branch in Amsterdam.
Europe is a unique opportunity, we are engaged in a hyper-local delivery model to take into account the nuances of the local logistics operations,” explained Mathew Elenjickal, founder and CEO of FourKites.
Last month FourKites presented Partner Hub a scalable solution to help carriers operate electronic logging devices (ELDs).
ELDs have become an industry standard, the need to connect with them effortlessly and in a trusted way has become a necessity,” says David Broering, President of North American Non-Asset Solutions at NFI.
So far, many users, while appreciating the accuracy of ELDs, have been worried about the security of their data.
The new solution allows them to check in detail how and to whom their data is shared (each operator retains control over their data and can disable the sharing option). FourKites, on the other hand, does not disclose any carrier’s ELD certifications to intermediaries or freight forwarders.
We track shipments, not carriers,” FourKites experts explain.
About four years ago, ClearMetal also started to gain publicity. At that time, the start-up obtained $3 million to create its own analytical predictive supply chain platform. Currently, ClearMetal is one of the most popular start-ups in the US offering this kind of service. It allows up to eight weeks’ advance forecasting using, for example, data from the carrier’s operations and information from third parties, such as weather forecasts, exchange rates and other economic events (several dozen relevant factors in total). All this data is then combined with the algorithms and updated in real-time.
According to Adam Compain, CEO and co-founder of ClearMetal, supply chains can reduce inventory, reduce transport expenses, optimize warehouse inventory in terms of logistics and distribution and improve customer service.
ClearMetal uses trusted Continuous Delivery Experience (CDX) software. The CDX platform, on the one hand, allows to provide customers with information, on the other hand, it helps to optimize global stock levels and operating costs. It also monitors individual operations, alerting if ‘exceptional’ events occur and helping to plan the distribution. Everything applies to each type of transport, and practice shows that it is particularly important for the user to plan the transport, and precisely to optimise transport times (by dynamically analysing the activities of all carriers, orders and reloading).
Timely delivery remains the key. On top of that, there is proactive customer service, with appropriate notifications and customer access to inbound shipments. A sort of bonus is the ‘release’ of cash flows, which is an obvious result of the reduction in buffer stocks and stock financing costs.
In January this year, Clear Metal opened a new office in Switzerland, in Feusisberg near Zurich.
“We took an important step by opening a second office in Europe, after London. The demand for Artificial Intelligence and platform-based supply chain solutions in industry and trade is growing. It’s all about improving transparency and data quality, streamlining strategic decision making and reducing costs,” says Thomas Kofler, Vice President Sales EMEA, ClearMetal.