Logistics meets Innovation

Logistics meets Innovation - Supply Chain conference

November 15th, 2017

Vlerick Business School, Brussels, Belgium

About the conference 2017

Just as any other industry today, the transportation and logistics (T&L) industry is facing change – new market entrants, business models, customer expectations, and technologies are emerging. Managing the operations becomes more and more complex – now that the customers are demanding to get goods faster, in a more flexible manner and at low, or no delivery cost.

To face and to ride the wave of change, the T&L players must embrace collaboration. There is an apparent shift from the economies of scale to the network and sharing economies. As a result, the T&L players need to adapt their strategies accordingly.

The 3rd edition of our Logistics meets Innovation conference focused on collaboration as one of the ways to improve operational efficiency, as well as on digitization as the enabler of collaboration. The participants discussed what needs to be done to realize the idea of the Physical Internet for logistics, the importance of data and analytics for collaboration, and what potential value can the blockchain bring to the T&L industry.

About the Presentations

“The Physical Internet - Just What is This Idea”

Rod Franklin
Adjunct Professor of Logistics
Kühne Logistics University
Kühne Logistics University
During the first presentation, Prof. Rod Franklin explained what Physical Internet is and how it could work by connecting the networks of logistics companies into one global network for transporting goods across the globe. He compared it to the regular Internet, which is based on two fundamental concepts: standardized packets and a set of connections between various internets, which are handled by routers and hubs that operate the standard protocols. To make the Physical Internet a reality, one fundamental element companies have to do is figure out how to build a standardized box or a series of standardized boxes. That could transform the land-based transport the way containers transformed the maritime industry. Then it would be possible to develop the material-handling equipment and the processes to rapidly handle the switch between various carriers or modes. At the end of his presentation, Prof. Franklin also added that we are still missing the visionaries, which need to come from the logistics industry and not from academia.

“Machine Learning & AI in Transport and Logistics” Part I

Frank Salliau
Founder/Data Scientist
The next presentation was separated into two parts. First, Mr. Frank Salliau briefly explained the concept of machine learning, which is the science of getting computers to act without being explicitly programmed. He showed the real-life examples of how machine learning is used in the cases which seemed to be science-fiction just ten years ago, including such technologies as autonomous killer drones, or plane engines. Mr. Salliau also explained that machine learning and Artificial Intelligence are becoming more and more popular due to the rise of Big Data, scalable computer processing power, and the availability of programming languages to handle machine learning algorithms.

“Machine Learning & AI in Transport and Logistics” Part II

Sven Verstrepen
Head of Supply Network Innovation & Analytics
During the second part of the presentation, Mr. Sven Verstrepen demonstrated several concrete examples of how machine learning and Artificial Intelligence are currently being used in logistics and supply chain industries. He described three use cases by IBM Watson Supply Chain, ASNIA (Ahlers Supply Network Innovation & Analytics) which is dealing with horizontal collaboration and sharing capacity between different players in the logistics market, and a Transmetrics case about logistics data cleansing, forecasting of future shipping volumes and predictive network optimization. Mr. Verstrepen pointed out that one of the key challenges for machine learning in logistics is handling dirty data of low quality, and that Transmetrics has been able to solve data cleansing and enrichment for logistics companies with very impressive results.

“Leveraging Transport Data to Forecast Key Economic Indicators”

João Monteiro
Founder/Managing Director
In the third keynote presentation, Mr. João Monteiro described the LogIndex initiative – a service by Kuehne+Nagel, which predicts economic indicators based on flows of logistics to show how the economy is developing. The service is targeted primarily at financial institutions and is distributed via an online platform. Its customers can see macro-sector estimates up to 60 days in advance updated in real-time. Mr. Monteiro demonstrated the live version of the service and explained that the Global K+N Indicators (gKNi) contain massive amounts of Kuehne+Nagel data as well as the information from 50 different logistics- or trade-driven sources. He explained that K+N is trying to find the most advanced uses of data and how to take advantage of Big Data in the unique position of Logistics, so the Logindex business unit was set up almost like a playground to develop new skills and technologies, which will later be able to contribute to K+N operations of tomorrow.

“Blockchain in Supply Chain”

Paulo Rodrigues
CEO Lisbon Office
The last presentation focused on the blockchain technology and how it can be used in the supply chain. Mr. Paulo Rodrigues briefly explained how the blockchain developed in the last few years, how it eliminates the need for the 3rd trusted party and mentioned some of the other differentiating factors that blockchain brings to the market, such as privacy, consensus mechanism, programmable rules (smart contracts), increased resiliency – no single point of failure, and others. However, Mr. Rodrigues stressed on the fact that the blockchain technology is still in its very beginning. We can see news around various PoC projects, but the platforms are not yet robust. People are just starting to build applications that can address real issues, including the issues in the supply chain. Among examples, Mr. Rodrigues mentioned the cooperation between IBM and Maersk, as well as a use case for invoice discounting, where blockchain technology helped to eliminate challenges such as reconciliation issues, data synchronization, lack of visibility, fraud, and others.

The Key Takeaways

The keynotes were followed by an interactive panel discussion which provided both speakers and the audience with an opportunity to discuss additional aspects of Collaboration in Logistics. The audience was very engaged, asking great questions that helped to go even deeper into the topics conferred. During the panel discussion, the attendees learned that if we can get the critical mass interested in the Physical Internet concept, it can become a reality in Europe by as early as 2030. The panelists further deliberated about the topic of blockchain in Supply Chain and that it’s not a theory anymore. They provided additional examples of several running projects, such as Walmart using blockchain to track Chinese Pork and trace Mexican mangoes, Port of Antwerp releasing containers with blockchain technologies instead of using PIN codes, and Kuehne+Nagel sharing a shipment’s Bill of Lading via blockchain. One of the last questions raised during the panel focused on the data quality and if the machine learning techniques can help to improve it. The CEO of Transmetrics Asparuh Koev shared with the audience that this is exactly one of the aspects solved by Transmetrics, where the company manages to significantly improve poor and inconsistent logistics data by using advanced AI algorithms to cleanse and enrich the data.