For better or worse, the past two years have shined a spotlight on the global supply chain. While both awareness of supply chain complexities and appreciation for essential supply chain workers like drivers and technicians has never been higher amongst the general public, with that awareness comes a slate of concerns and issues with product and labor shortages, long delays at ports, extreme weather events and health risks.
These issues have been taken seriously, and supply chain stakeholders around the world are working tirelessly to address them and find ways to adapt to these circumstances in order to prevent them from happening again. New technologies and new ways of thinking are critical for unlocking efficiencies, optimizing operations, and keeping the global supply chain moving.
Hear from Dan Popkin, sector vice president, connected supply chain for Trimble Transportation, about how the events of 2020 and 2021 are poised to inform and impact the supply chain in 2022 and beyond.
Tell us more about your background at Trimble and what you and the team are working on. What part of your job are you most passionate about?
This is my 21st year with Trimble – I spent the last 20 years with the Trimble MAPS team – formerly known as ALK Technologies. In the last 15 months, I’ve taken on a new role leading the Enterprise division, where we are focused on building out our connected supply chain platform and ecosystem.
Part of my responsibility in this new role is building a transportation industry cloud platform in which different stakeholders – carriers, shippers, intermediaries, drivers -- can interact. The reason why we’re doing this is because we feel there’s a disconnect in the supply chain that is creating inefficiencies throughout the industry. When stakeholders don’t have access to optimal information at the optimal time, they’re not able to make the most informed decision.
Our short-term goal is to make the lives of drivers, technicians, back office staff, shippers, and really everyone throughout the supply chain easier, every day. The long-term goal is to build a platform that enables closer collaboration to reduce things like empty miles, address the driver shortage by optimizing utilization, and many other concerns that are driving inefficiencies across the entire supply chain.
I really love the people I work with and enjoy the opportunity to work closely with our customers to implement solutions that deliver value, address their core business problems and that help them innovate. That is really what motivates me every day at Trimble.
What’s been driving retail and e-commerce trends this year?
There are several factors that are leading the evolution of e-commerce right now. Consumer demand is increasing across the board in pretty much every vertical, and with Generation Z growing into adulthood with their spending power, they have particularly embraced e-commerce as a platform.
In addition to this, as a society we have become an “I want it now” culture, meaning we’re no longer willing to wait for our online orders – we want them to arrive as quickly as possible, and as cheaply as possible. This is, in turn, putting a lot of pressure on e-tailers (and retailers!) to deliver fast and at a low cost. Consumers have also come to expect free shipped returns, creating a reverse logistics challenge for many companies.
With the COVID-19 pandemic creating frenzied buying cycles, retailers have also been forced to embrace new and innovative hybrid distribution methods for meeting shoppers where they’re at – online ordering, curbside or in-store pickup, personal shopping services, and using retail spaces as distribution hubs.
At the same time, labor shortages caused by the pandemic are also creating challenges throughout the supply chain, whether that’s in-store employees, truck drivers, port associates, rail workers, maintenance technicians, manufacturing positions and more. Companies of all sizes in every industry have been forced to find new ways to keep up with demand, even when they may not have enough employees, whether that’s new forms of automation, reducing their product offerings, extending ship times and more.
The supply chain has always been a dynamic environment, but these past two years have really created the perfect storm of challenges. The good news is that there are almost always opportunities for growth and improvement within these challenges.
Are those trends something that are just here for the moment, or are they here to stay? Why?
There are some trends that certainly aren’t going anywhere, like the rise of e-commerce. But I think we’d all like concerns about the pandemic to come to an end, safely, which would help alleviate some of the health- and labor-related pressures within the supply chain.
I think we are in a little bit of a retail bubble right now, but freight demand should continue to stay strong for quite a long time as retailers restock following peak season.
Even before the pandemic, manufacturing was already starting to get closer to the consumer – what I mean by that is that there was already a trend toward bringing products to distribution centers closer to where orders were being placed, so that shipping times would be faster, ultimately providing better service. I think that will continue to drive forward.
Construction is also a very hot demand right now, with the construction of millions of new homes and housing units coming to fruition over the next many years.
Supply chain issues typically sort themselves out in the long run, but I think there is some time ahead of us, yet, before there are any significant improvements to current challenges. I am hopeful that by the end of next year we will see some improvement.
How are those trends affecting the transportation & logistics industry? Is it a net positive or a difficult challenge?
These trends bring both positive opportunities and negative challenges to the transportation and logistics industry. One thing that’s clear to me is that the “pendulum” of transportation will continue, as it always has, between shippers and carriers. That’s why it’s so vital that both parties have tools and systems – ideally, a platform – that can adjust to the constant, dynamic nature of the marketplace.
The capacity crunch certainly is a challenge – Class 8 trucks are in high demand, as are the parts that are necessary to keep them running. On the one hand, there’s no getting around that as a major challenge to the industry – but on the other hand, that’s an opportunity for manufacturers, or even maintenance technicians.
The transition from “just in time” to “just in case” warehousing does create an opportunity for carriers, since it means that there will continue to be freight that needs to be moved between warehouses.
Regardless, each challenge that arises is an opportunity to differentiate yourself from the competition, or do things better than before. Technology can certainly help create a stronger business and stronger response.
There is a lot of angst about product shortages, longer delivery wait times, and more. Is that deserved, and how do you think these current supply chain issues will impact freight movement for the holiday season and into 2022?
The angst is real. Internationally, this holiday season is one of the most difficult in recent history. A lot of difficult decisions are being made with manufacturers and shippers about the breadth of product that will be available to consumers this year – do they continue trying to offer a wide variety of products at lower volumes, or streamline production to focus on a smaller number of products in higher volumes?
The short answer is, for better or worse, that consumers will likely not have as much choice and variety as they have become accustomed to – their preferred retailer or e-tailer may be sold out of an item, with no way to get it back in stock or shipped out in time for the holidays. Or a manufacturer may decide to discontinue an item that is inefficient to produce, or highly labor intensive, or simply not profitable enough to justify the investment.
We’ll have to see what happens as a result, but my suspicion is that the accompanying reverse logistics cycle will be stronger than ever before. Many consumers may “settle” for a product that they ultimately decide they don’t want to keep, increasing the number of returns made in early Q1 2022.
How can technology help alleviate some of these challenges, both in the current operating environment and beyond?
Visibility is essential to helping all supply chain stakeholders understand the status and location of freight, giving the “control tower” visibility into shipments. It’s important, but it’s also not enough on its own.
Load matching – the ability to help match carrier capacity to shipper needs – is also extremely helpful in addressing some of the current supply chain challenges. Many carriers may have recently experienced disruptions to their typical operations and have capacity to fill – why not help them connect with a shipper who needs their freight moved? These technologies can help create opportunities.
There is also a huge need for technology in general that can analyze the massive amounts of data that is coming out of the supply chain from many disparate sources. Being able to more dynamically adjust operations closer to real time based on new data and analysis coming in will ultimately allow the supply chain to become more flexible and adaptable, creating efficiencies and positively affecting the bottom line.
For instance, we are taking a deep dive into dynamic contract procurement through a new collaboration with Procter & Gamble to see how we can help customers adjust to changes in market conditions to ensure that shippers have access to the right carriers to move freight, and carriers can access great freight opportunities.
How does Trimble's Enterprise business (and solutions) fit into Trimble's connected supply chain strategy and what are some ways you’re working towards delivering on this vision?
Trimble is focused on developing transportation technology that is intended to close the information and timing gap in the supply chain, and accommodate its continuous evolution. The connected supply chain vision is all about collaboration, connecting entities that drive efficiency and allow seamless partnerships.
Today, our systems allow stakeholders to connect with technology vendors and integration partners to increase the efficiency of their own operations.
Tomorrow, stakeholders will be able to collaborate with each other to further increase the efficiency of their own operations.
The day after tomorrow, we envision solutions that will enable collaborative, industry-wide optimization.
We want to take the industry to a point where decisions can be made, not just in a siloed environment of each company’s networks and distribution centers but take it to a broader level to bring in carriers, shippers, warehouses, rail, ports, air and sea. The cloud helps connect those stakeholders no matter where they are in the world.
There is a lot of work ahead of us to break down those siloes, but the goal is bringing everyone closer together, aggregating data and connecting workflows.
Curious to know how technology can help you navigate the complexities of the transportation supply chain? Contact us today to find out how our wide range of solutions can empower you to reach new levels of performance and connectivity.