Control Tower as a Service; the need for logistics Industry to have a lean bottom-line
“Control Tower as a Service” launched by WebXpress, analyses the dashboard and offers business insights that help organizations make quick decisions. It provides an overarching view of all operations across the supply chain and helps the organizations to bring down the bottom line by a minimum of 20%. Control Tower helps in Monitoring, Alerting, Resolving, and Analyzing. Mr. Apurva Mankad, CEO & Founder, WebXpress shares more insights on the same.
- Tell us something about the current scenario of the logistics industry.
Logistics industry worldwide is facing unprecedented challenges as well as opportunities. On one hand, we have a spectre of recession in G7 countries, an ongoing war leading to high fuel prices. On the other hand, there is a marked shift towards technology driven digital logistics and climate-goals driven emphasis on sustainable logistics.
Logistics companies that invest in managing these trends will gain massively in coming years. For example, a company investing in EV fleet capacity will attract global capital to expand, get customers looking for green km and also reduce its cost of operations.
- What is the concept of Control Tower as a service? How does Control Tower help the logistics Industry?
What is control tower
A Control Tower is combination of technology, people and processes to monitor various operational processes against key benchmarks and take proactive action to prevent any untoward incident. Control Tower also acts as first responder to identify and address any incidents and aligns relevant teams and resources to mitigate effect of such incidents. In a nutshell- a Control Tower is
Why logistics industry needs control tower
In March 2021, Ever Given- a 220,000-ton cargo ship got stuck in Suez Canal for 6 days. The estimated loss in trade was over USD 54 billion. Given the highly synchronized nature of logistics industry, the backlog of shipments lasted months with effect across globe from China to USA.
This incident highlighted very fragile nature of supply chains and extremely thin margins of logistics industry. While an incident like Ever Given got global media attention- logistics industry grapples with thousands of small incidents every day across their network.
The very idea of Logistics Control Tower is to monitor all such possible events and ideally prevent them or take quick action to mitigate its effects.
- How can bottom-line management be a key for profit-making in logistics industry?
- Logistics is a very competitive business with wafer thin margins. With a very large number of players competing for essentially same business- it is natural for logistics companies to offer lowest possible prices. Thus, even a few events can directly impact the bottom line of logistics.
- For example, a 32 ft multi-axle vehicle from Mumbai to Delhi may cost Rs. 55,000 say with a gross profit margin of Rs. 4000. Suppose a vehicle had a breakdown and gets delayed by 4 hours and customer levies a penalty of 5% of freight- that is Rs. 3000. That is 75% of profit margin gone!!
- A control tower could have detected the delay of vehicle and alerted driver, supervisor and customer. Possibly, vehicle was quickly repaired, and delay was limited to 1 hour. In such case, penalty would be less or may be waived off by customer.
- Logistics companies face hundred of such events such as vehicle breakdown, diversions, natural calamity, delay in loading and unloading, wrong route selection, even theft and hijack of vehicle.
- A Control Tower team will monitor all such events centrally and take appropriate action to mitigate all such events.
- What are the benefits of Control Tower as a service that the companies can avail? Give some examples of WebXpress beneficiaries.
Here are some interesting use cases where control tower has helped to save costs and improve service levels.
Control Tower monitors every shipment and vehicle against defined route and expected time of delivery. GPS data from vehicle is processed to check in real time location of vehicle. Control Tower application calculated pending time of arrival and calculates any delay.
If delay is beyond tolerance, an alert is raised, and Control Tower team will contact the driver to check reason for delay. Control Tower team arranges any help needed to reduce delay, if possible.
A heat map shows Control Tower team all vehicles that are delayed, and by how much. This visually helps to keep check on all delayed vehicles and focus on most delayed vehicles first.
Reduce excess waiting time
Control Tower can monitor waiting time of a vehicle at various locations. In case, a vehicle is waiting for too long- an alert is generated. In case, a customer has held up vehicle for too long- logistics company can additionally charge for waiting time.
This can reduce the overall turn around time of vehicle and ensure revenue for logistics company.
Pre-placement of vehicles
Control Tower can predict arrival time of vehicle at destination. Thus, logistics company can know in advance when a vehicle will be free and where. They can place vehicle against this demand much before vehicle reaching destination. This will ensure immediate load for vehicle with minimum waiting time. This results in more trips for a vehicle in a months and higher revenues.
Ensure optimum vehicle performance
Vehicle sensors can relay data about various parameters such as engine temperature, driving behaviour, tyre pressure etc. Control Tower can measure the same against benchmarks. In case of any issues, Control Tower can guide vehicle to nearest maintenance facility and ensure any potential issue is fixed. This can reduce vehicle breakdowns and thus timely delivery of shipments.
Route Deviation Alerts
Control Tower can set a geo-fence of entire route for a vehicle. In case a vehicle deviates too much from its path, control tower can intervene and check the reason for the same. This can check any unnecessary additional kilo meters and avoid extra costs.
Last Mile Delivery control
For last mile delivery, control tower can check if a given delivery run is completed and all shipments delivered as per a route plan. In case of any hold up, control tower can inform customer and thus reduce any dissatisfaction or rejection of delivery.
As we can see from above, Control Tower can be very beneficial to logistics company and contribute directly to their bottom line.
- What are the trends in the logistics industry for 2022-23?
The year 2022 has seen faster adoption of sensors and devices in the world of supply chain and logistics. With rollout of 5G taking place, the enabling infrastructure to get real time massive data will be available in a widespread manner.
- Package level tracking
- Many years ago, companies such as Walmart experimented with RFID tags – but technology was expensive and much ahead of its time. Now, in 2022, package level scanning using technology such as BLE has become viable.
- Digital Twin of vehicles
- As we have seen in case of self-driving cars and high-end electric vehicles- massive data about vehicle movement is available in real time creating a digital twin. This technology will now be applied to commercial vehicles. While older models of vehicles can provide limited data, newer vehicles provide immense information.
- Video Analytics
- Technology such as Cognitive AI have become commonplace. Same will now be applied to all aspects of a warehouse. Vehicle docking, tracking of human operators, CCTV based attendance are becoming common tools across Smart Warehouses and will be deployed widely.
- EV deployment
- With increased focus on Climate change, supply chain industry is under pressure to clean up its act. Transportation accounts for 15% of Global GHG emissions- and electric vehicles are obvious answer. Electric bikes for last mile delivery, solar rooftops for warehouses, optimized truck loads to reduce emission per kg- 2022 will see many such initiatives gather pace