A supply chain community that can cure shipper pain points

Photo: © Anyaberkut

When the Ever Given blocked the Suez Canal, the race was on to find the solution to refloating the vessel. Innovation for solving this disruption involved the use of a digger and a lot of tug muscle.

Supply chains are similar to what one joker called the ‘Never Given’, referring to the fact that much of the cargo was lost, this type of event requires innovative techniques to find a solution.

Disruption on a global scale, through the pandemic, war in Ukraine and climate change, requires what was once called ‘blue sky thinking’. Digitalisation and collaboration fall into the category of innovation, but they are not the end solution.

Digitalisation and collaboration can effectively address the pain points in our modern world. We see a strong link between these two components and enormous potential for collaboration and digitalisation for economic and societal value (CDES).

CDES systems are symbiotic and self-reinforcing: digitalisation requires collaboration, while intellectual, social and environmental capital is a prerequisite for generating profits. Collaboration will drive growing returns.

Creating a Virtual Watch Tower (VWT) community, an online community that communicates all along the supply chain, through a diverse group of players, can solve the visibility issues.

A group of leading companies from Sweden and Singapore which joined forces with the Research Institutes of Sweden and the Institute of High Performance Computing (IHPC)/Agency for Science, Technology and Research, are developing VWTs and will test a networked array of systems designed to better manage supply chain risks and disruptions.

As a first step, the project identified the challenges faced by cargo owners, the so-called shipper pain-points, which would detect where the cargo owner-driven and port-centric VWT network solutions lay.

The pain points
The overarching struggle noted by cargo owners in numerous conversations and working sessions is the lack of visibility, particularly when disruptions emerge – the Ever Given effect.

With disruptions managed properly, cargo owners can benefit from significant cost savings while also increasing customer satisfaction, which together will drive top-line and bottom-line growth. The benefits include avoiding paying for expensive emergency air transport, freed capital and more precise emissions data to achieve compliance and differentiation.

Society also gains through reduced emissions, resulting in improved health for its citizens.

At the core of the solution sits visibility brought about by digital means, which is a pre-requisite for managing the disturbances and disruptions which frequently occur across global supply chain networks. A main cause is the lack of collaboration, a fact the industry has been discussing for a long time.

Each player optimises their own operations, but it’s hard to do anything differently when you lack visibility.

Knowledge is a wonderful thing; it can translate into better decision-making through an improved understanding of the circumstances in which issues have arisen, allowing for better recommendations and solutions. Collaborative solutions will lead to better execution of viable recovery options, orchestrated at opportune locations such as the various ports of call along a ship’s service rotation.

Empowering a supply chain community through collaboration and digitalisation is precisely what motivated the creation of the VWT.

An open systems solution
The VWT is a hybrid human-machine solution. A cyborg of sorts. The community is built around intelligent digital “middleware” that connects VWTs of different member organisations. The network of systems strengthens the ability of all members to better manage risks and disruptions across supply chain networks.

By working together, humans and machines can achieve greater intelligence via access to a combined data lake and the analytical power of the members of the VWT. Consolidated computer power and community power improves assessments and outcomes.

The VWT project was conceived as a decentralised and neutrally-led initiative journeying towards increased collaboration and digitalisation for economic and societal value.

Collaboration and digitalisation are key components to manage our volatile, uncertain, complex and ambiguous times. But the idea goes further. The CDES concept helps us to address our economic concerns and also to tackle global challenges like climate change and pollution of the oceans.

Standing together we are stronger than standing alone – particularly true in a fragmented self-organising system like global supply chains where the outcome of the whole depends on the performance of the weakest link.

So, the next time your ship blocks the Suez Canal, the VWT will ease the pain points with more than one available solution. Perhaps that ship will be the Ever Forgiven.

The full executive summary is can be accessed here

Mikael Lind, Research Institutes of Sweden (RISE) and Chalmers University of Technology, Wolfgang Lehmacher, Anchor Group, Xiuju Fu, Institute of High Performance Computing, Agency for Science Technology and Research (A*STAR/IHPC), Kenneth Lind, RISE, Xiao Feng Yin, A*STAR/IHPC, Mattias Bolinder, Ericsson, Berit Hagerstrand-Avall, Stora Enso, Shad Hallam, Green Cargo, Axel Stenhammar, Wallenius-SOL, and Jimmy Suroto, PSA International contributed to the development of this executive summary