Disruptive Technologies and

Physical DistributionMatheen Sait

3M EMEA Gmbh

• Disruptive Technologies –Innovative products or processes that change existing technology

• Disruptive technologies can drive innovative supply chain strategies giving a better CX, cost,agility

• Need for- Look Out, Look Around and Look In -to be the Disrupter rather then be disrupted

• Wiktionary defines ‘disrupt’ as “to improve a product or service in ways that displace an established one and surprise the market’ ‘UBERizing’ is “to modify a market or economic model by the introduction of a cheap and efficient alternative”.

Digital Disruption Drivers• Internet penetration – 50% of worlds

population is connected and growing

• Principle of Crowdsourcing – Uber, Airbnb,etc

• Rapid Rise of startups – New generation of Silicon vallies globally

• Exponential Technology -Costs are going down on key drivers- Moore`s law, Solar/Wind Energy, LIDARs, Lithium Batteries,etc

• Low growth trend and forecasts –need for exploring all potential options

• European Parliament, UK and National Government strategy on Disruptive Technology in Transportation

Market TrendsLeading to rapid disruption

Robot Prices

Digital Disruption leads to constantly increasing customer expectations

• Trend towards more online purchases

• Reduced Manufacturing and Delivery Lead Times

• Customers expect Lower Costs- for higher Technology in products and services in value stream

• Visibility in Supply chain – Highest expectation

• Interactions to be efficient in all steps of the Customer Experience-Less human touches

• Collaboration and extended services –rather then a pure product order to delivery process

• Predictive and Digital Supply chain

The Age of Servitization –Extended Value Stream Service to Customer

• Organisations are increasingly adding services to their product offerings

• Servitization with Digital technologies provides additional revenue and improved customer loyalty

• Key examples: Rolls Royce providing Power-By the Hour, Alstom managing train tracks, Phillips Lighting-as-a service, HP with Printer management, Tesla for energy as a service,Uber for Car as a service, Amazon and Toshiba for memory Chips

• Internet of things used to monitor assets, communicate and increase customer satisfaction in an extended supply chain

The Amazon Effect in Logistics Disruption

The “Amazon effect” has disrupted customer expectations about the speed and visibility of goods in transit

The Reducing Cost of Key Technologies driving faster Innovation

“What we consider super-computing today will be what our grandkids will play Angry Birds on tomorrow “

Solar Energy

Moore`s Law /

Storage

Lithium Batteries LIDARs

Cloud, LPWAN

andApps

Sensors and RFID

VR and AR

AI and Robotics

Moore`s law : Treble chip density / Data Storage 50%-every 2 yearsSensors: $3 to $ 0.5, RFID to 0.1$Li Battery: $20K to $175 per KWHSolar: $6 to 0.72 per WattLIDAR:$75K to $2K or lesserVR Headsets from +$ 1000 to $500Robotics:40% Cost Reduction

Digital Trends in Physical Distribution

• Last Mile dynamics and Same-Day Delivery

• Sensors and automatic identification

• Value Chain Uberization and Crowdsourcing

• Robotics, AI , Machine learning and automation

• Big Data and Predictive analytics

• Wearable and mobile technology

• Autonomous vehicles and drones

• Electric Vehicles and Energy Storage

• Energy: Solar energy

• Bots and 3D printing

• The Internet-of-Things (IoT)

• Blockchain

Last Mile Delivery Excellence• Amazon setting the pace

• Rising e-commerce makes increased smaller packages to deliver

• City congestions and transportation innovations

• Change in Retail Buying trends and use of prime space

• Boot delivery, college delivery, delivery by employees, Pickup,etc

• Customer expectations growing – challenging to all businesses

• Growing no. Fulfillment centres and DCs for last leg

• Multiple options to deliver

Blockchain in Transportation

• The blockchain solution is based on the Hyperledger Fabric and “will help manage the paper trail of tens of millions of shipping containers across the world by digitising the supply chain process from end-to-end, to enhance transparency and secure sharing of information among trading partners”.

• The technology is essentially an encrypted messaging system that allows supply chain partners to operate a shared ledger that records all the events in the processing and physical progress of a shipment, such as customs entries or bills of lading.

• Tested by Maersk and IBM for a container of flowers from Kenya to Rotterdam, Pineapples from Columbia and Oranges from Florida

• Huge potential to streamline supply chain. Provide visibility , ease transactions, reduce costs and lead times

Approach to Digital Disruption

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” – Niccolò Machiavelli

Do Not ignore Disruptive Technologies in Logistics!

• Harness Data as a driver (internal and external sources), IoT

• Transform data into knowledge - Data Analytics and AI

• Transform data into the physical world – Autonomous vehicles,etc

• Develop Key partnerships with Logistics Partners who lead the way

• Invest as you can in own disruption strategy

• Customer Centric strategy with increasing CX with Digital

• Investment in Data security is paramount

• Avoid one size fits all approach- Choose technology wisely

• Monitor regularly what disruptive technology will be useful

• Look out for Servitization as a Strategic process

• The Future is Here…………………………….imagine a suppply chain world in 2030………………

Thank You