interview using digital solutions to improve transport ......transformational journey. some chemical...

InterviewUsing digital solutions to improve transport logistics in the chemical industry

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Thomas EinsiedlerChief Product Officer (CPO)Transporeon

Alexia Fenollar SolvayResearch Group LeaderRWTH Aachen University

Max HoffmannResearch AssistantRWTH Aachen University

INTERVIEW DIGITALISATION CHEMICAL INDUSTRY

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Content

USING DIGITAL SOLUTIONS TO IMPROVE TRANSPORT LOGISTICS IN THE CHEMICAL INDUSTRY ........ 3

EXPLAIN WHY YOU CONDUCTED A STUDY ON THE DIGITALISATION OF TRANSPORT LOGISTICS. WHICH TOPICS WERE YOU PARTICULARLY INTERESTED IN? ................................................................................. 4

WHICH TECHNOLOGIES DID YOU FOCUS ON? ............................................................................................................. 5

IS THIS PARTICULARLY USEFUL FOR LOGISTICS PROFESSIONALS IN THE CHEMICAL INDUSTRY? ......... 6

BASED ON THE STUDY, WHAT IS THE CURRENT STATE OF DIGITALISATION IN THE CHEMICAL INDUS-TRY COMPARED WITH OTHER INDUSTRIES? ................................................................................................................. 8

WHICH TOOLS AND PROCESSES ARE CHEMICAL COMPANIES ALREADY USING? WHICH NEW ONES SHOULD THEY ADD NEXT? ................................................................................................................................................. 10

SUPPLY CHAINS IN THE CHEMICAL INDUSTRY ARE TYPICALLY GLOBAL. DOES PROCESS IMPRO-VEMENT DEPEND ON GREATER PARTICIPATION BY ALL PARTNERS ON ONE SINGLE PLATFORM? ..... 11

ARE THERE ANY AREAS IN WHICH THE CHEMICAL INDUSTRY LEADS THE WAY? ..................................... 12

WHERE IS THE CHEMICAL INDUSTRY FALLING BEHIND? WHICH NEW DIGITAL APPROACHES SHOULD BE APPLIED? .............................................................................................................................................................................. 13


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The digitalisation of transport logistics usually takes place over time, like a transformational journey. Some chemical companies have only just started with their first steps while others have made huge progress and are now reaping the benefits of a digital connection between shippers and carriers, achieving smarter, transparent and more cost-effective movement of chemical products around the world.

To find out more, we talked about this journey with representatives from two key organizations. Transporeon, the provider of a global cloud platform for intelligent transport logistics, and Germany’s largest technical university, RWTH Aachen, joined forces to conduct a unique survey of the current and future status of digital logistics.

Using digital solutions to improve transport logistics in the chemical industry


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Thomas Einsiedler:Several key trends are currently disrupting the chemical industry. Customer needs are changing and demand can fluctuate – consumers expect more, particularly an easier customer experience, and they are looking for lower costs, product specialisation, and product and process sustainability. Outsourcing is introducing complexity; merger and acquisition activity continues to increas, and raw materials pricing is volatile. The pressure to reduce costs remains constant. Meanwhile, Chinese companies are capable of disrupting European and global

Explain why you conducted a study on the digitalisation of transport logistics.Which topics were you particularly interested in?

chemical markets with new products and innovative manufacturing processes. Our main goal with this study was to identify requirements and opportunities for the future digitalisation of transport logistics.

Alexia Fenollar Solvay:We called this study an investigation into ‘Transport Logistics 4.0’, a reference to the term ‘Industry 4.0’ which describes the fourth industrial revolution. This latest developmental stage for transport logistics promises nothing less than real-time, comprehensive connection between people and things. We wanted answers to several questions: Has the revolution in mechanical engineering and production technology (Industry 4.0) now also reached the transport logistics industry (Transport Logistics 4.0)? To what extent have IT and cloud-based platform providers entered the transport logistics sector and what are they busy doing right now? Are any new business models emerging in transport logistics? In what ways can big data be used – for example, can it be used for predictive analysis in logistics? To what extent will supply chains be automated in the future?


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Max Hoffmann:

As a research institution that focuses on data analysis and the application of machine learning in production and logistics, we focused mainly on recording the degree of digitalisation, the use of information and communication technologies, and the handling of digital logistics processes.

Thomas Einsiedler:

The study did not focus on specific technologies in the narrower sense. Rather, it measured the development status of the surveyed companies along different dimensions, from digitalisation and the ability to collaborate with customers to the automation of data-driven processes. Thanks to this approach, we have been able to create out of our study a benchmark tool that any organization can use to identify their current transport logistics digitalisation status compared with other companies.

Which technologies did you focus on?

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Alexia Fenollar Solvay:

Yes because in chemical and process engineering, it is essential to establish robust, predictable supply chains and powerful transport logistics processes. It is all about delivery reliability and planning reliability when you are transporting dangerous goods or valuable chemical products.

Is this particularly useful for logistics professionals in the chemical industry?

The chemical industry is setto benefit significantly fromTransport Logistics 4.0.


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Thomas Einsiedler:

To tackle their challenges, chemical producers and distributors need to automate their processes, achieve more dynamic transport allocation, and access the largest possible carrier network. They also require 360º visibility into shipments and the transport market to enable instant, accurate decision making. Full process visibility of operations and costs, all supported by effective risk management, is required.

The Chemical producers and distributors might also enable shareing of relevant information between all stakeholders and deploy a continuous improvement process. Focusing on what is important for their companies, their customers and the industry as a whole, then acting before issues occur could be a key potential solution.

The chemical industry has some very specific processes in regard to safety and security regulations, and digitalisation must respect these conditions.


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Thomas Einsiedler:

Internationally, the chemical industry stands in midfield – the average level of transport logistics digitalisation across all industries is 39.6% and the chemical industry scored 40.7%.

Based on the study, what is the current state of digitalisation in the chemical industry compared with other industries?

But the results reveal that companies in the chemical industry are not yet fully utilizing the potential of digital transport logistics – there is room for considerable growth to achieve 100% digitalisation.


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Paper

Chemicals

Chemicals

Building Materials

Consumer

Retail

Mechanical Engineering

Automotive

Transparency Transparency

Adaptivity Adaptivity

Digitalisation Digitalisation

Sustainability Sustainability

Cooperation Cooperation

Automation Automation

Customer Orientation

Customer Orientation

Information Usage

Information Usage

0%5%

10%15%20%25%30%35%40%45%50%

0%5%

10%15%20%25%30%35%40%45%50%

Major differences can be found in the areas of digitalisation, information usage and automation. The paper industry is lagging behind in all dimensions.


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Thomas Einsiedler:

A lot of chemical companies are using interfaces to communicate with their suppliers and carriers, but the future lies in communication and collaboration via a cloud-based platform that can integrate every party in the supply chain.

Representing a quantum leap, the tedious job of ‘shipment tracking by telephone’ has given way to transmitting event-based status information to relevant parties, enabling the shipper to proactively inform the end customer of any delivery problems or delays. However, in most cases this still requires the driver or the dispatcher or both to take action to communicate status information. The next evolutionary step in shipment tracking is real-time visibility – using digital tools to achieve constant transparency of truck location and ETA (estimated time of arrival). Automatically generated messages can be sent to all relevant parties – this will be the new standard. The technology is already available, and many customers are asking chemical companies to provide these higher levels of transport logistics service.

Which tools and processes are chemical companies already using? Which new ones should they add next?

The next big thing is to predict the future from existing data, moving away from reactive behavior to fully proactive behavior. Only a few cloud-based collaboration platforms, the very largest, will be able to provide predictive analytics and machine learning capabilities as algorithms and optimization require a critical mass of big data.


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Max Hoffmann:

Yes, because such platforms can operate in whatever language you prefer, effectively overcoming any traditional language barriers. When companies in different countries want to transmit and access transport logistics information, they can do so in their own language. This improves transparency and speeds up response times, making cooperation easier and processes safer and more reliable.

Thomas Einsiedler:

The impressive thing about a collaborative network is its enormous transparency and efficiency. All participants in the entire B2B or B2C supply chain, right up to the end customer, have transport details and status information at their fingertips. Competitors can even cooperate to their mutual advantage, for example, to make

Supply chains in the chemical industry are typically global. Does process improvement depend on greater participation by all partners on one single platform?

optimum use of freight space.

A good example of cloud-based cooperation is warehouse and terminal service operators responsible for the intermediate storage of chemical products. These service providers do not usually generate the transport order, so they rarely have transparency about truck arrival times. In practice, this leads to long waiting times, demands for demurrage, and much frustration. A leading terminal service operator recently introduced one of our digital products, Transporeon Time Slot Management, and has improved truck punctuality, reduced truck idle and waiting times, and enabled all parties to plan ahead and schedule with confidence.

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Alexia Fenollar Solvay:

One of our questions explicitly highlighted the use of predictive technologies for forecasting and forward-looking use of optimization procedures. According to our analyses, the chemical industry occupies a leading position in this area and can therefore be regarded as one of the pioneers in the use of big data and predictive analytics.

Are there any areas in which the chemical industry leads the way?


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Max Hoffmann:

Specific product tracking remains a challenge in the chemical industry; traditional logistics processes struggle with continuous production methods. Digitalisation can definitely improve things here. With greater cooperation between intra- and extra logistics processes, companies can more clearly identify production batches.

Thomas Einsiedler:

Where is the chemical industry falling behind? Which new digital approaches should be applied?

The chemical industry tends to suffer from isolated information sources. Digitalisation means that companies can bring all of their data onto a single platform, breaking down silos and enabling proactive and automatic information sharing.

Using digital time slot management achieves many valuable efficiencies. We’ve been working closely with chemical companies to customize our digital product to meet industry specific needs. For example, with Transporeon Time Slot Management you can define maximum possible simultaneous time slot bookings depending on the product. Growing security requirements are another challenge for chemical companies, and here too there are several digital solutions available. If you’d like to know more about any of these topics, please just contact our team at Transporeon.

Interested in more?Efficient time slot management improves carrier punctuality, shrinks truck wait times by 30%, and cuts costs. Explore more about how chemical companies can handle it all digital in our industry-specific infographic.

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https://www.transporeon.com/en/expertise/insights/special-content/infographic-time-slot-management-chemical-industry/?utm_source=Internal-Content&utm_campaign=ABM-Chemicals-2019&utm_term=ABM-Chemicals-2019&utm_content=Infographic-Time-Slot-Management-EN

interview using digital solutions to improve transport ......transformational journey. some chemical...

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