SCM Interview

AEB Interview: Insights on supply chain trends and developments

Geoff Taylor shares views on latest trends in supply chain management with focus on digitization and carrier synchronization.

Geoff Taylor is the General Manager of AEB (International) in the UK. Responding to questions on latest developments and challenges in supply chain management and logistics, Geoff shares valuable insights with AEB magazine readers. 

Do you see a lot of examples of inefficiencies in supply chains resulting from the lack of synchronicity between companies and parcel services or other carriers? Have you had a lot of feedback from customers on this?

Geoff Taylor: In the digital age, if the flow of information of a shipment is not right, then the shipment is likely to be delayed: be it through resulting errors in declarations, incorrect labeling, missing barcodes – to name but a few. With time cut short between supply chain transit points these days, businesses cannot afford any data synchronization issues to potentially delay anything in global supply chains. 

But more importantly, any lack of data transparency based on such synchronization issues between companies and their carriers can have a direct impact on customer satisfaction. The delivery of a product to its final recipient has always been a crucial aspect of overall customer satisfaction. 

And customers today – both in B2B and in B2C – don’t just want timely deliveries as promised, they also expect transparency over order status and delivery progress at all times. The need for speed – both in terms of deliveries and in terms of information flow – is constantly rising. 

Our customers face tremendous challenges to meet these market expectations, which is further amplified by latest e-commerce trends and increasing levels of digital customer engagement. Companies working with only one carrier or transport serve provider are no longer the norm but a rarity: to fulfill today’s market demand, most businesses work with a number of different service providers, transport partners, and carriers. 

And not only that: to get the best service and to align to best market offers, companies also switch carriers more frequently than they used to, which creates integration challenges and potential delays every time a new provider is taken on board.

Do you think that digitization has, while making the streamlining of supply chains easier in many ways, also added new complexities and a level of technological sophistication that many companies will find daunting and/or expensive?

Geoff Taylor: Digitization as such – be it smallest steps like automating previously manual standard processes or larger projects that involve external business partner integration or IoT technologies – is a daunting topic for many businesses. And despite trends and developments impacting all markets around the globe, it is also a very individual topic. Which processes to automate? Which partners to integrate? What products to align? While digitization has opened up many new opportunities, it also continues to present businesses with many questions and challenges. 

As such, digitization is a powerful enabler and a root cause of problems at the same time. Smooth running supply chains have become an important factor for the success for businesses across industries today. But specific improvement measures to increase digitization levels of company very much depend on industry sector, competition scenario, market goals, and importantly: on the individual business model. Return on investment is vital for any digitization project and for smaller solution projects in the area of transport and logistics, for example, the rule of thumb for the ROI is no more than three years.

As you say, collaboration between links in the supply chain is vital, and can only really be developed over time. Has the logistics industry been particularly bad in this regard? Why do links between the chain seem to break down, when the technology (and presumably, the will) is there to create a more seamless chain?

Geoff Taylor: Supply chain visibility, collaboration, and integration are hot topics for many years now. And despite their importance and prominence, supply chains are still not as transparent and integrated as they should and could be based on today’s available technologies. This has many aspects and perspectives, which are certainly not limited to the logistics industry. And this is where a major root of the challenge lies: supply chain integration and visibility on comprehensive level extends beyond borders or companies, industries, and countries. As such, it involves many stakeholders and decision-makers and many companies still shy away from such a comprehensive approach despite its long-term benefits. 

Can you see signs of progress in regard to greater seamless integration between customers and carriers/express service providers? Is that partly due to the improved technology available, partly due to increasing levels of competitiveness in logistics?

Geoff Taylor: The logistics service provider and freight forwarding market has always been highly competitive and subject to mergers and acquisitions. Advances in light of digitization have further launched wholly new business models that further threaten existing providers. So yes, attractive services and prices in line with latest trends are ever more important to keep a competitive edge in the industry. In addition, as the question implies, we’ve had significant technology advances that fueled digital services and capabilities. And today, ideally, the flow of information should accompany the flow of goods in real-time to meet market demand. So in theory, this should have also fueled business partner integrations across a number of business units in companies. But while we notice that overall awareness for business partner integration is increasing, many businesses still hesitate to get started. In the case of carrier integration, many businesses still assume it’s more complicated and costly than it actually is.