TAPA IN A CHANGING WORLD
The world, however, can change very quickly, potentially in the time it takes to compose a Twitter message if you’re a world leader.
The thinking behind TAPA’s 20th Anniversary Global Conference was to step beyond the current day-to-day world of security and to look at changes happening around us that have the potential to not only change the way we do business but which will also present both opportunities and threats for supply chain security in the future. This begs the question, so when is the future? Is it tomorrow, next week, next month, next year, 5 or 10 years away?
One of the speakers brought in to challenge the way we think about the future was Nik Gowing, author of ‘Thinking the unthinkable’, described as a ‘new imperative for leadership in the digital age’. His message was loud and clear; the world can change in an instant. It’s not just business that’s hard to predict, it’s our changing society and our personal security too. Global leaders are facing an unprecedented level of disruption and many are floundering.
His views were echoed by Dr James Bellini, a self-styled ‘historian of the future’ who spends a great deal of his time evaluating key trends and strategic challenges facing current and future business into the 2020s. He said: “Over the next five to ten years we will see more disruptive technological change than we saw in the whole of the twentieth century. This will have a transformative impact on supply chains. This pattern of disruption will continue into the more distant future as further waves of innovation create whole new industries and change the rules for logistics and supply chain management.
“Some disruptive technologies will be already known to us but are now entering an important new phase of maturity: mobile-cloud devices, robotics, the Internet of Things, 3D printing, Big Data, autonomous vehicles, the emergence of ‘smart’ hyper-connectivity … and so on.
Others will be innovations currently out of sight beyond the horizon that will have significant impact in different economic sectors. Their combined effect will transform every aspect of daily life: working practices, re-shaped business models, a manufacturing sector shaped by the impact of ‘Industry 4.0’ (the current trend of automation and data exchange in manufacturing technologies) consumer habits, smarter homes and neighbourhoods, even the act of innovation itself. And, of course, logistics and supply chains will enter a new age.”
The biggest innovator of supply chain change, however, won’t be technology, it will be customers, say Amazon, and it’s hard to disagree. 20 years ago when Amazon started out, long deliveries were the norm. In those days it was perfectly acceptable to ship in 4-5 days – but Amazon and others have come a long way since then. In December 2014, Amazon launched its Prime Now service in Manhattan with a commitment of a one-hour delivery. Today the service operates in over 100 cities worldwide. Why? Because that’s what their customers want.
Jeff Bozos, Amazon’s founder, says it best of all when talking about innovation: “Start with the customer and work backwards.”
Eb Mukhtar, Amazon Europe’s Director of EU Transportation and Logistics Services, gave delegates in London an insight into one of the next big supply chain innovations; drones, with a video showing Amazon’s Prime Air service. “It looks like science fiction, but it’s real. One day, seeing drones delivering Amazon packages will be as normal as seeing mail trucks on the road. We have already proven it works,” he said. It’s all about embracing the possible and challenging the seemingly impossible if that’s what customers want.
Eb Mukhtar stated: “We wouldn’t be successful if we weren’t willing to fail. To invent, you have to experiment. Most large organisations embrace the idea of invention, but are not willing to suffer the string of failed experiments to get there. Big winners pay for so many experiments.”
DHL is another company not afraid to experiment. Nor is it ignoring supply chain security solutions that already exist. DHL remains strongly committed to TAPA’s Security Standards with some 370 global sites already TAPA FSR certified.
At DHL, the age of the digital supply chain is already here. It’s a smart move. McKinsey is on record as stating ‘The biggest future revenue and profit impact of digitalisation is set to occur through the digitalisation of Supply’ while Cisco Consulting believes $1.9 trillion of value is at stake through the deployment of Internet of Things (IoT) use cases in the supply chain and logistics industry.
These are indicators fuelling work and creative thinking at DHL’s Innovation Center where projects include:
· The connected warehouse
· Augmented reality solution vision picking, which produces an average 15% productivity gain, improved picking accuracy, greater customer satisfaction, and requires 50% less training time
· Aerial oversight with drones
· A family of CO2-neutral Streetscooter vehicles
· Robotics for autonomous identification and mobile piece picking
· The use of smart locks and deliveries to car trunks
Scott Allison, President – Life Sciences & Healthcare Sector, DHL Customer Solutions & Innovation, highlighted how technology – often becoming available at lower cost – is changing what companies can do and offers ‘a huge opportunity to grow new revenue streams and business models.’ The fact that the Federal Drug Administration in the U.S. has already approved the first 3D printed drug is just one indication of what’s possible.
Discussing robotics and automation, he said the dropping cost of automation is unlocking a wealth of new opportunities. The possibilities for the use of robotics were best explained by Prof. dr. Pieter Jonker, full professor in Cognitive Robotics at the Delft University of Technology and CEO of RobotRobotsCompany in the Netherlands. For anyone confused by the complexities of robotics and what it is going to take before we see robots fulfilling a range of supply chain functions, Prof. Jonker provided a simple insight into what makes an autonomous robot:
It can move (walk, drive, fly, sail, dive)
It can manipulate (reach, grasp, inspect)
Where am I on the map of my world?
Who are “the others” and what are they doing?
What is my task and how am I doing?
What/whom do I need for my task (leverage)?
Like so many other topics discussed by speakers and panelists at the London conference, listening to Prof. Jonker speak provided another reminder that the changes many feel are still years away are actually proven, becoming increasingly advanced and sophisticated, and are going to change our working and private lives sooner than we think.
Some of this disruption will be warmly embraced by companies constantly looking to lower operating costs although artificial intelligence, in particular, will not be without its risks. However, the potential for automated warehouses and autonomous vehicles will, in the fullness of time, go a long way towards solving issues such as recruiting a flexible workforce to meet seasonal peaks or driver shortages.
It is, arguably, all a part of ‘thinking the unthinkable’ – as Nik Gowing would say - and being prepared for all eventualities. Pat Flynn-Cherenzia, Senior Director, Global Logistics and Fulfillment at Microsoft, presented two supply chain disruption case studies that looked at the much-publicised ransomware attack on Maersk Group and the bankruptcy of Hanjin Shipping and the ensuing response.
She concluded by offering this advice to companies regarding the key questions they should be asking themselves as part of their plan to deal with a disruption event:
· How do you stay informed and aware of the latest and greatest issues impacting the logistics industry?
· How do you know the right time to disengage?
· What is the current/general industry sentiment?
· What sort of network, infrastructure and sources do you need to develop in order for your supply chain to be informative and predictive?
· Is your supplier base proactively dependable and situationally aware?
· What are the possible scenarios where disruptions might occur?
· What is your recovery plan for every possible disruption event?
· How much risk is appropriate for your business?
· What are your trade-offs (cost/reliability/ops executive?)
· How do you evaluate and quantify risk in your supply chain?
· How do you ensure your supply chain is resilient against, and responsive to, disruptions?
Crisis Management & Situational Partnerships
· Is your existing supplier base able to ‘deliver the goods’ in times of need?
· Do they have the wherewithal/clout to ‘move mountains’ for you?
· Who are the stakeholders to engage with?
· Would you be (de)prioritised by your suppliers when crisis hits
· How do you leverage your supply base and stakeholder network to drive supply chain action to ensure an efficient disruption resolution?
It’s a lot to think about. So what is TAPA’s role in helping members gain a greater understanding of so many new challenges, opportunities and threats and their impact on the security of global supply chains?
Jason Breakwell, TAPA EMEA PR Lead, and Conference Lead, Rein de Vries, both played key roles in setting the agenda for the London conference and for the choice of speakers. So, did it work and what happens now?
“We invited a range of outside speakers to present fresh and different subjects because our goal was to broaden our members’ outlook and to challenge our industry to adapt and develop. We wanted every delegate to take home new information and I felt we achieved our goal. I think for the future it is important that TAPA provides a forum that goes beyond our conventional boundaries. We are fortunate to have a very diverse membership and I’m sure they will provide numerous opportunities for us to pursue. I think the topics we discussed in London have made us all realise that some of these changes are happening even faster than we think but it is also clear that legislation and regulation is not keeping pace. This is one of the areas where TAPA needs to invest more time to acquire more expertise and knowledge of the impacts of future technologies, and ensure our security programmes adapt accordingly to protect our members’ supply chains.
“In London, the sheer size of the event made break-out sessions difficult but we will certainly be including these at our next conference in Warsaw, which will enable us to cover a wide range of subjects again. I would urge our members to get involved in break-outs and speak up, and please keep recommending interesting speakers and themes to the TAPA conference team.”
His views are shared by Rein de Vries, who added: “The world is changing so fast around us, it’s making people nervous. We have to continue to listen to our members, understand the issues that are important to them, and use our conferences and other communications channels to supply the information they want. Our London conference was a continuation of that process and the feedback from the majority of delegates was good. They appreciated the opportunity to hear from a broader range of speakers who are experts in different fields.”
TAPA members can download presentations from the London conference in the password-protected ‘Information’ section of the EMEA website. If you wish to propose topics or speakers for the Association’s next conference in Warsaw in April, please contact info@ tapaemea.org