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Digital Supply Chain Greater Upside Than Auto or e-trucks Trucks?

One truck manufacturer exec says the digital supply chain will be the next big breakthrough in trucking productivity –  even more so than electric or autonomous trucks.

Speaking to suppliers at the Heavy Duty Manufacturers Association Breakfast and Briefing at the inaugural North American Commercial Vehicle Show, Persio Lisboa, executive vice president and COO of Navistar International, predicted that data and analytics will drive advances in trucking industry productivity while imposing increasingly stringent design requirements for truck and component reliability.

As reported by Heavy Duty Trucking,  Lisboa  said customers’ expectation are radically different today than even just five years ago, with “48 hour delivery starting to sound like a terribly long time.”

However, he said, this incredibly fast and efficient delivery system has a very inefficient back end. For every truckload of products that hit the front door of a customer, there are four other equivalent loads taking place to manage returns, transfers between PDCs, etc., he said – “an efficient system maintained by an inefficient supply chain.”

And who is paying for those inefficiencies? It’s not the end consumer, he said, and it’s not Amazon. Which means those in the supply chain are likely footing the bill.

Those inefficiencies are hardly news to fleets. As one customer told Navistar, “We don’t need more drivers, we need more time driving.” Large carriers typically report that drivers are only actually driving about 6.5 hours out of their 11 hours of available driving time. The rest is wasted on things like waiting to load and unload.

“The only answer that makes any sense is we need to find a way how to get our supply chains delivering a breakthrough in productivity.”

A digital supply chain, he said, could provide that breakthrough.

From HDT:

By 2025, Lisboa said, electrification and automation are projected to provide some $79 billion in savings. In contrast, he said, a digital supply chain could save $157 billion, with operational improvements, reduction in driver turnover and improvement in driver performance, but most importantly, in the network, optimizing driver utilization, cutting deadhead miles, eliminating unplanned downtime, and optimizing trailer capacity.

“When we add together the impact of these three megatrends – electric, autonomous and digital supply chain – the industry has the opportunity, over the next few years alone, to capture a 30 percent improvement in efficiency, and consequently lower operating costs,” Lisboa said.

“We don’t think that can happen without a network of connected vehicles,” he said. “We believe that’s the backbone of the digital supply chain.”

One challenge there, though, is that close to 70% of trucks on the road today don’t even have a telematics device, he said.

The world of connected vehicles offers greatly increased availability of data, which can enable digital load matching, as well as a much more accurate level of prognostics for truck maintenance issues.

As an example, he cited Navistar’s use of data from its OnCommand Connection remote diagnostics system to provide detailed guidance on maintenance and truck specifications to all customers, even those purchasing just a single truck.

Analysis of big data from connected vehicles can tell truck makers almost precisely what to expect from a certain component or group of components, and can even point toward specific vehicles in the population that may be exposed to a certain issue, with a high degree of confidence.

“The companies who supply the network of connected vehicles and take advantage of the big data generated by them, will be one step ahead of the others,” Lisboa said.

Lisboa warned the suppliers in the audience that if they don’t get out in front, they may be left behind, much as companies such as Blockbuster and Kodak were by the digital revolution.

“It can happen to all of us,” he said, noting that Bill Gates in 1994 said, “It’s important that [internet] expectations aren’t cranked too high. The total number of users is still very small.”

“My first advice to all of us is to really get paranoid about the fact that disruption is going to happen.”

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