Global Supply Chain Council (GSCC) Live Stream

Thank you very much for joining us for the at the 3PL Value Creation Summit. We'd like to thank our speakers as well as all of you attending, as well as our sponsors Apex as well as Blue Yonder. This is the What's Next in Supply Chain Technology section, and for this section we have three individuals who are very prominent in this field, and I'm going to go ahead and let them introduce themselves before we. start off. So Richard, would you like to lead?

Hi, good morning everybody. I'm Richard Ryan, based in Singapore. I work for Blue Yonder. I'm part of the 3PL industry strategy team. And yeah, thank you very much to have us, Frank.

You bet. Richard, if you could just do that— what, you were cut off, so your mic was on mute. So if you just do that over again real quick.

Yeah, so Richard Ryan, based in Singapore, working for Blue Yonder. I'm part of the 3PL industry strategy team, so we work with some of our global 3PLs around the region. Thank you very much for having us.

Terrific. Thank you, Richard. Ferhat?

Yep. Hi, thanks, Frank. So I'm Ferhat Ismail, based out of Singapore. I work for Toll Group based in Singapore. I head up their customer engagement, customer solutions teams, as well as in charge of digital transformation for Asia, looking at new technologies and so forth. Yep, and thanks very much for having us, Frank.

Great.

And Wolfgang?

Yeah, my name is Wolfgang Lehmacher. I'm in supply chain for some decades, supply chain logistics and transport. I'm a board member on corporate boards and I'm an investor in multiple startups. I'm an operating partner at Anker Group and I'm very happy to be here.

Great.

Well, thank you very much. I appreciate everybody coming. And just to kick it off, the one topic that is on everybody's mind right at the moment, and I thought I'd go around the table and just ask you to give your views of how some of the broader opportunities and challenges you're experiencing in your respective areas over the last 4 months as we've gone through this rather unprecedented event globally, just to give us a view, just to get us started on how you're looking at your world as we've adjusted to this. So, Farhad, do you want to start?

Yeah, sure. So I think one of the key things that I've seen, and it's kind of, it's more of a logical evolution, is people are not so protective of their data anymore, right? When I'm Let me put some context on that. So there's a bigger focus on platforms, things like making sure that the information that you want to be out there in terms of, you know, that runs your business is actually accessible by people who want to use that business and, you know, participate in the supply chain, right? Things like rate quotations, instant rate quotations. MSC just launched their one last week. So we've had this major shift towards platforms, online platforms, and having this proliferation of data. It's just that the— that there's— it's taken some time for the rest of the industry to catch up. So we've had this focus on putting it out there, but I think it takes a little more time for the people who are consuming this data to be aware of it and kind of, you know, catch up and make this sharing of information a little more organic. So that's one of the key opportunities that I see, the whole proliferation of platforms and people actually looking at, can I digitize this part of my business? They're actually looking at that. You know, like there's always this joke, right, that goes around, what made your company transform, you know, what enabled digital transformation in your company? And people are like, you know, is it the CIO or what? But the final answer is COVID-19, right? There's a big shift towards people actively looking at, can I digitize or digitalize this part of my business? So that has kind of brought along this whole focus on, can I expose data relating to how I need to run my business so that people who are in the chain can use that? And yeah, and it makes the industry a little more closer towards having that, the data that allows you to track where you are in your supply chain a bit better. So I think that's one of the key things. On the flip side though, what I've seen is that people who do have this focus, they're focusing a lot on the front end. So they're focusing a lot on fronting up this data, but they've kind of neglected a little of the back end. So there's always this term, right? You know, you have this show horse and you have the workhorse, right? The show horse is there for you to, you know, make sure it's it looks pretty, runs fast and stuff. But you need to have the workhorse in the back, you know, digging the plow in the field and stuff. So I think that that opportunity comes with that challenges as well, make sure that the correct investment is there in terms of backing up the platforms, the data that you want to put out there with a solid backend.

Okay, good.

Good.

That, that increased visibility has got to be quite a cultural change coming Especially in places like the forwarding community, etc., etc., that usually holds that data pretty close to their chest, right?

Definitely, definitely. Yeah.

Richard? Yeah, I think we see a couple of things. First, short-term remote work works. We've done full projects remotely. We would travel for a 1-hour meeting in India. That's gone, and I think it's gone for good. I think people now understand that you can do much more work remote. Good or bad. There's also a lot of, as companies restart, they have to figure out where is their supply chain. A lot of supply chain is in containers and ports and trucks. In some countries, it's not that easy to track all of that. So visibility, which you say, Frank, is becoming the number one word, is visibility. Okay, but also there's some simple things which, like having masks. Now if you have one warehouse and you need to have masks, that's okay. But if you have 1,000 warehouses and you need masks for every employee, 3 shifts, and well, now you have a problem. You need to have masks, you need to have cleaning, social distance. We see automation now coming in extremely heavy. It's the only way to do somewhat social distance. And so we see all the investment now as we see the switch on that we talk to our customers is visibility and flexibility. Okay, and how can they redesign their supply chain? We talked a little bit before the session, if you're building something in another country because it's a dollar cheaper, but you're going through a port, another port means another point of disruption. So now people have to look at the physical or logistic disruption point, but also the political disruption points. A trade route may be closed not because there's an issue, but because there's socioeconomic, governmental problems, and then suddenly you see a trade route close, and you have to have your business ready for that.

Well, I think particularly in Southeast Asia, if you just look at ASEAN and look at the diversity of how a lot of these countries are handling this, it's really a virtual minefield, if you will, to try to navigate a regional strategy, right? It's crazy.

And some countries— I'm sorry. No, just going to finalize. Some countries like Hong Kong, Singapore, even in the maximum part of the lockdown, the ports were working, e-commerce was working, you could still buy your goods. In other countries, ports got congested, ports got closed, and that has a much more serious impact on the supply chain. Sorry, Wolfgang.

Right, right, exactly.

Wolfgang?

Yeah, I would like to reiterate I would like to reemphasize the last point. I hear a lot about the supply chain is disrupted, the supply chain doesn't work, the supply chain has set up in a, in a maybe unfortunate way. I'm totally with Richard. It's in fact the government decisions which have disrupted us to a large extent. It is the lack of global coordination which has created major challenges. It's the lack of standards for essential workforce. We have 200,000 seafarers on ships that cannot go home because we are just not able over weeks, if not months, to sort this out. I think that that's something we have to keep in mind. And I want to say that I'm so impressed by the great supply chain people who have solved many of these issues. And in terms of my experiences in the businesses I'm involved, um, we had to have heard e-commerce. E-commerce is of course the main driver now of economic growth. And I'm involved in a last-mile delivery company. I'm the chairman of the board of directors, and we had to deal with 20% monthly growth while the economy story is usually a bit more bleak. I have to say that that business benefited. We are well on plan. Then I'm involved in a bundle of startups, mainly tech startups, and there is clearly a pickup in terms of order bookings. The challenge is a bit around getting on a supplier list now. So large companies don't add new suppliers, which is a bit of a challenge products. But if you're on the supplier list and you're supplying, for example, visibility capabilities, we saw a doubling of bookings in one of our businesses. Another business I'm involved in is a platform business, the matchmaking platform for truckers. It's small and mid-sized truckers connecting with smaller shippers. And we saw an enormous increase on the supply side because all these Truckers, believe it or not, in the past days they many thought that okay these old-fashioned dinosaurs but but they see the opportunity in digital and they want to be part of these marketplaces and platforms. I mean, so a significant surge there and on the demand side it's going also very well. So overall, I think the ones who are in the tech. And this is the TAG panel, are more on the sunny side of the tragic event which we are facing.

And I think we're seeing a lot of indications of what you're talking about. And I think one of the areas that we were interested in is, you know, generally in times like this when we have a lot of uncertainty, and obviously we're halfway through this, We hope as much as halfway through it, but we're definitely not at the end. And generally in times like this, people generally tend to hold back on their investment in large-ticket items like technology and like robotics and technology on the ground and facilities, et cetera, et cetera. Are you— are the 3 of you sort of seeing that pullback, that wait and see, or are you seeing this really as a catalyst for even more investment? Are you seeing people out there looking to push more money into the space rather than waiting to see what's going to happen as we come out of it. Farhad, what do you think?

Well, if you— I think a lot of that depends on how digitally native your organization is. I think the more traditional 3PLs, their investment technology over the last couple of years has kind of lagged the more digitally native providers, right? So, uh, we see a bigger focus on bottom-line-focused technologies, things like automation, RPA, which can give you, uh, the kind of benefits in a quicker turnaround time, right? So people are re-looking at these kind of technologies as, you know, how can I bring them right now? Because I've— okay, my CapEx has been slashed by 25%. And fundamentally, the decision-making happens at the top, but the execution happens below that. So you have the people who are below that who have to make do with, you know, the kind of CapEx and the budgets that they have, and those realistically have gotten cut, right? So once, let's say you have a certain niche focus that your company wants to adhere to, then you would focus on your investments on that. So But, but right now the environment is not very conducive for that kind of rash decision-making, I would say. I think most of the people, like what Wolfgang was saying, right, there is— or rather, I think Richard was saying— there's a rejigging of the supply chain, but people are not committing. They're not committing to that. They're still very much of a look-and-see attitude. So that's why we've seen the spot market shoot up, right? We look at air freight and even ocean freight, the spot market is growing through the roof. And the next week is falling off. So there's such a peak and a trough of this whole market. And you realize that people are not really going back to the spot market for the first time, I think, in ever so long, actually had 1/3 of the overall volume in June, if I'm not mistaken. So that's quite a revelation, right? So when you have that kind of uncertainty, where do you invest? How does your technology invest? You wouldn't look at 3 years, 5 years down the line. You would look at more the here and now. So we see that focus coming, but we also see companies which are a little more digitally native, you know, they have a little more, they have a little more of a stack that they've developed. They are using this opportunity to kind of make sure people know that, you know, guys, we are, we are in, we are, you know, we have this kind of API connectivities. We have, we are a bit further down the line in terms of not relying so much on the human aspect of things, right? We may not, we may not have the, the, you know, the standards in place. We may not have the large-scale infrastructure investments that, that, that some of the bigger companies might want, but we are nimble, right? So that's a bit of a toss-up. So that's where I'm seeing, but there's a lot of focus on bottom-line technology.

Well, you bring up a really good point, especially in terms of CapEx budgets as we're starting to— we've probably only a couple more months until we start going into budget season. So, you know, it is going to be interesting if companies, especially larger companies like Toll and others, are going to be looking at, do we bite the bullet and make these investments now, or do we hold back and do we look at it on more of a broader term? Richard, how are you seeing that?

Yeah, so we're seeing some of the— okay, so some of the 3PLs are are jumping the gun and going out and making investments. Different investments. Visibility, it's a clear one. And visibility requires a lot when you're talking road, ocean, road, ocean, air. We're talking total visibility end-to-end. So it's really, it's not only just visibility of last mile or primary freight or secondary freight. So that's one area we see investments happening already. Robotics is another one. Not automation, more robotics. Why do I say this? Because automation typically in a warehouse, AS/RS or conveyors, requires long-term infrastructure. These new robots that follow the picker, they don't require infrastructure, so they can be deployed very fast. So these 2 elements tell me that investments is coming, but no project can be more than 4 months. There's no more 2-year project, 3-year project. You go to an executive today with a 2-year project line, he throws you out of the room. Okay, people want to see stuff that has, you know, 4 months, 6 months tops return on investment and productivity. The last area we see a lot of investment now is last mile. I think one of the things COVID showed us, there is some broken around last mile, around multiple vendors, multiple technologies. Every city in Asia you deal with a different last mile provider. So we see these changes happening and we do see the investments coming, Frank. But again, Nothing more than I would say 6 months is now a very long term for any deployment.

Wolfgang, how about yourself?

I agree clearly with Ferhat and Richard regarding that you cannot— there is no overall answer. It depends on the company. Where there is clearly a drive to do something is in visibility, is in improving planning, is running the business in a different way, at least in the more progressive companies. So what I mean is not using the old corporate mindset, we have to, let's now freeze everything, we freeze travel is anyway out, but training, and we know it all, right? It is about how can we do that smarter and how can we run the business smarter, what do we need need for that. Another point I want to make is regarding the tunnel. Frank, you said we are in the middle of the tunnel. I think we are out of the tunnel. We are out of the COVID-19 outbreak phase. COVID-19 is the new normal. I think we have to say goodbye to the idea, oh, in 6 months everything is good. I just got a WhatsApp this morning, oh, when we are out of the woods in 6 weeks. I can only say, who knows, we can be in the woods for the next 6 years, right? So that means we have to, have to think long term, even if we don't want it. And I had just a discussion with a client yesterday who has engaged, in fact, 3 larger consultant firms to work on very different long-term projects to improve his customer interface, CRM tools, back office processes, major investment. And we were discussing about setting up an incubator, an accelerator for them so that they can drive very specific areas in the existing operations, but also possibly set up a parallel operation because we have seen the shortcomings during COVID-19 of our previous business models. So this is a moment for the innovators to build alternative business models and find ways to work themselves through this.

Right.

And we see, for example, one of 3PLs already doing trucking from China to Europe. Train from China to Europe is becoming more common. I mean, air flight, as Farhad said, air Air cargo went up through the roofs. There's issues with ships sailing. So, you know, opens a new door. Will these new doors be temporary or not? Only time will tell us. But I also think certain industries, principally the ocean, which has been run by rules that are hundreds of years old, traditional lanes, traditional vessels sail every Monday, you know, that's all being disrupted. And I think there's a lot of opportunities there. And I think companies will be doing the investment, Frank.

Yeah, so, so Richard, interesting that you mentioned rail. So in my previous organization, I did the Belt and Road setup for, for, for them to run the business from China to Europe, right? So I did the whole setup of lanes, uh, the, the business case, the order management, everything, right? So at that time, and that was like 3 years ago, we were struggling to gain traction because we were getting good amount of traction with companies who are a little more— had a little more expensive cargo, like, you know, Huaweis and so on, right? They would, they would use the rail corridor for their— this thing, because it made a little more sense in terms of security and traceability and stuff like that. And what we did notice was these major backlogs at the European side for ports, like in the rail terminals, like in Poland and things like that. they did not have the infrastructure in place to kind of handle the volume that was coming out. So there is a lot of hype around that, but when you actually look at the physical infrastructure, you realize that there are certain limitations to this, the amount of rail volume that you can then carry. And that's not something that can scale up in very short term. But definitely in terms of a mode, yeah, that's one of the key things we're going to focus on.

Yeah, I mean, every crisis brings creativity and that brings opportunities.

Right, right. No, without a doubt. But, you know, you actually, you were thinking along the same lines as I was, Farhad, about the Belt and Road, because that's going to be an area that is clearly open to an alternative distribution pattern that we'd normally had traditionally out of, particularly out of Asia. And so as that's sort of already been in place and you've had an opportunity to work on it, very, very closely. From a technology standpoint, has the technology caught up with the design of what the Belt and Road is trying to do on the ground in terms of linking ports and linking rail and linking these other distribution patterns? Is the technology able at this point by most of the— by many of the participants able to actually take use of it? Or is it still very much still a traditional, traditional market?

Interesting that you, that you say that, because even 2 years ago, the technology was in place, right? We had these IoT devices, you know, you can go to China, you can get a, get a supplier to give you a black box, you plug it on the container, and you can track it. And you have these fantastic dashboards that give you exactly where it is, right? But when you look at the overall end-to-end, you realize some of these sensors go black.

Right.

Why? Some of the countries in the middle don't allow this. It's a security risk. So they ask, do you have something? They pluck it out of the container, right? So we had an 80% rate whereby— sorry, 20% rate whereby we would have these sensors go black. And you would still continue to do it because it gives the customer a certain amount of visibility. But the regulatory environment was the thing holding it back, right? The environment. The China side had a lot of things in place in terms of declarations. You know, you could move the train with and do declarations subsequently. You could have bring the container into the rail dock and do declarations once it's inside there. They had everything set up, but the regulatory environment of the intermediary countries all the way up to Europe, right? That was a little there is a little more to be done. I think, and but I am hopeful that this would kind of move that marker along because. we are in an environment whereby you can't rely on this physical humans doing this checking and stuff less, so it has to be a lot more automated now.

Yeah, anybody else?

The Belt and Road is that it is not only transportation, it's also a data road. And there is the Digital Silk Road, which is massive in terms of internet cable, satellites, what the Chinese have brought up. So I think from a technology point of view, and I think that's what is what Ferhat is saying, we have made a major progress with the Belt and Road. What is lacking, and that's very normal, is is the governance framework. So the companies have to get to to terms and to grips with with what has been built, and that usually takes time. That should be a If I said it already, I think 5 years ago, it should be one customs union. If you want to make it really efficient, you have one customs union from China to Europe. That would solve a lot.

Well, that would be convenient. I would doubt that that's probably on the horizon in the short term.

Richard? Well, look, I think, as I said, I see companies doing the investment. I think there's no choice now. I think it's very clear that not everybody will survive COVID. I think the ones that are flexible, the ones that are doing the investment, will come out stronger. And unfortunately, I think there are some companies that we see that are just waiting for it to go back. You know, let's dial back 6 months and pretend it didn't happen. And I believe these companies will suffer a lot. On the 3PL side, I think there's huge opportunities, not only because of COVID but there are other changes geopolitically that means the supply chain is being redesigned in the region, and that always brings opportunity. Okay, we come from a very complex supply chain where we build stuff just because it was a dollar cheaper in that country, then we move it to pack in another country because it was a dollar cheaper there, uh, without taking consideration ports. customs issues with, you know, I mean, right now India is blocking the Chinese apps. Some Chinese containers are blocked. I'm not taking a side here. I'm just saying that you need to now think about that when you do your supply chain. And if you're adding another country, it cannot be just because it's cheaper, because that could really bring you down. You know, you really need to understand, you know, you need to look at that supply chain. And I think For medium and large companies, you need technology for that. It's not something you can do in an Excel spreadsheet.

Right.

No, I couldn't agree more. Moving away just a little bit from the enterprise side, which we've been talking about quite a bit, in terms of the— obviously, especially with current conditions, e-commerce and consumer patterns have been very volatile and changing quite a bit across the board. When we're talking about last mile, which you mentioned before, Richard, How is that really starting to affect, particularly from a platform perspective, as you were referring to, Farhad, how is that impacting what you're seeing in the market in terms of both fielding these applications but also the investment in them? Wolfgang, do you have a thought about that?

Yeah, I think that I touched already upon it, that e-commerce is the major a major, let's say, I think almost winner of the COVID-19 because digitization has accelerated. I usually say now what I expected at the beginning of the year to happen in the next 5, in the first 5 to 6 months of the year, that happened sometimes even in 5 to 6 days. That if we have any idea that whole populations could work on Zoom, right? So there was an enormous push, and that will have an impact on e-commerce as well because we do this from home. So I see a major shift in the space of e-commerce with the rising importance of our homes. Our homes become the central place of the economy. We are doing banking from home. We can visit doctors from home. We're shopping from home, et cetera, et cetera. And then the logistics has to follow that, right? But also, to put a little bit of a different, let's say, twist to it, only 30% of the US population can work from home. There's still the issue that we have to have people in factories. That's about 350 million people worldwide that you have to deploy devices. Sometimes you have to send people. So it's not all that can digitize everything. Last mile, last mile is the most complex topic in the whole e-commerce story, as we know. And there is no silver bullet. And the solutions which are out there, I think they're good. We have much better communication with the clients. We have locker system. We have boxes in front of our houses. We have drop-off points. We have it all. It's more about, and Richard may be able to talk about that, but it's pulling it together under more effective platforms and have more visibility on what is happening and maybe faster interface interchanges. So I see the e-commerce dashing ahead and the investments will follow. If you look into the startup space and where money is going, there's definitely a lot of money going into AI at the moment. But e-commerce, last mile deliveries is still a very attractive field to deploy capital. So I don't see a change in that there, and it's a prosperous field.

Farhad, is Toll looking at this with new eyes as they've watched the input of the pandemic and what it's been doing, and particularly in the region? Companies like yourself, are they looking at changing or expanding their approach to that segment? Or not.

Yeah, so Frank, so one other thing which I neglected to mention when I introduced myself is that I'm also the vice president of the supply chain chapter for the Singapore Computer Society. So we do a lot of industry work, upliftment, organize things, knowledge sharing, networking sessions, you know, try to uplift the Singaporean population in terms of supply chain skills, right? So, and we do a lot of collaboration with different companies, and some of them are startups. We get them to come and present. We try to create a platform where people can, you know, the supply chain industry gets overall uplifted, right? So when I take Toll in conjunction with what the overall picture that I'm seeing, right, you see, you see e-commerce taking a step towards retail. What do I mean by this? So you have these platforms that have come up, which are almost mimicking some things that we do in retail. So they are connected to the marketplaces, the Lazadas, the Amazons, the Shopees, you know, all these platforms that we have. But they also have the management of your marketing strategy, your orders, your pricing, your costing, everything inside. So you have these platforms and they have come up quite with a lot of funding, a lot of investment from startups whereby they allow you to manage your even bigger companies. Like it can be, it can be the big players like Unilever and the P&Gs to kind of run their e-commerce on these marketplaces almost akin to retail. Flash promotions, you know, dynamic cost pricing, dynamic pricing change, you know, broadcasts. Things like this. So they— these— and what they do is they not just do the plumbing, they also do the— they're trying to do the physical stuff now. So these people are taking a step away from just being platform providers, but partnering with physical warehouses, physical last-mile companies, and kind of doing the physical aspect of it. So they're kind of encroaching on the traditional 3PL space, and they are finding niche markets. For example, people, bigger companies who wanted to try out e-commerce for a bit, you know, see how, how it goes, and then move before they make a bigger commitment in terms of, you know, do I have to have my own storefront and things like that. Because you'll be surprised, you would think a lot of the bigger guys would have the e-commerce strategy set up, but you, you would actually be surprised, right? So there are this— the rise of these kind of people is allowing the, the platform to be king. And I think people who can marry the platform with the physical a real threat to the real traditional 3PLs. So, but it's good, right? It's all the more competition, the better, as long as, you know, it's positive for the entire industry.

As long as you're not on the wrong side of it, right?

Yeah.

And on the other side, profitability becomes important. And the way physically a lot of companies do e-commerce is still very inefficient. Joking, was a warehouse manager, he says he picks a niche or he picks a pallet the same way. Basically, it's costing the same amount of money to him to pick a pallet or to pick an each. That's completely not sustainable. When e-commerce was an add-on to the business, that's okay. But as e-commerce becomes more dominant, the backend has to be efficient and they have to start making money on e-commerce. There was a wave of we don't need to make money. Well, I think one of the things that COVID is showing you, well, you actually do have to make money.

Exactly.

You have to operate profitably.

You cannot sustainably, You know, if you're doing something which is physical movement and you're losing money, the more you sell, the more money you lose. So I think there's a lot of innovation there, Frank, on the backend of how to deal with this e-commerce, how to do picking, how to do put away. Do you ship it to a DC or do you do e-commerce straight from factories? There's a lot of studies going on right now with technology to where is the best way of doing this. And I believe you're gonna see over the next 2 years a lot of investment on technology exactly to fulfill that space to do this efficiently.

Well, and to that point, we've got a question from one of the attendees that asks, is it advisable to have a separate platform for warehousing and inventory management, vehicle tracking, and data analytics, or is there a platform that has all 3? I mean, that's been a struggle for a long time to get that everything in one box.

Yeah, I don't know, I don't know if any— anybody that does everything in one box or at least does it well. What we're seeing now are, are platforms that are like control towers that sit on top of these applications and they do the linkage, they connect all the different platforms. So when you're looking at the, at the screen or the app, you don't, you don't know what's a WMS, what's an ERP, What's the transportation? Everything is fed into that. That's becoming very popular on that. The other thing we tell our customers, don't try to solve the problems of the world. A lot of visibility, a lot of our customers, they want to solve 50 problems at once. Impossible. Choose what's your biggest problem, work on that, and go from there. Principally, if you're a medium-sized company, you cannot do this all at once. It's a journey and you need to do step by step and you need to pick up what's the most important step for you.

On the other hand, when it comes to visibility, people are looking, and Richard, you said that they are looking for end-to-end visibility. So, and that should be what you described at a certain space, should that data be aggregated whether it comes from from sensors, telematics, or community systems, whatever. It should be aggregated at a certain level and analyzed at a certain level and produce the products the customer needs to run its business in a better way.

Yeah.

And we need to learn to live with the technology that exists today. If you're doing trucking in the US, yeah, there's GPS and there's structured trucks. If you're doing trucking in Brazil, well, you may not have that information. You just have to live with that. The systems have to adapt for that.

Right.

I think, yeah, I think Richard hit the nail right on the head. So that whole aggregation of information is key, but you need to focus on what's the problem and you need to know what exactly am I trying to solve, right? So I know Blue Yonder have their Illuminate tool. I was privy to one of their things. It gives you that end-to-end visibility, but another way that people are looking at it, and this is quite a new technology is that people have evolved from the whole data warehouse concept. Previously, people used to have come up with these data lakes whereby they aggregate their data into a single space and they do their reporting and stuff like that, right? They— this data lake projects are complex and quite big, right? If you don't have your data, if you don't understand it well, it can take a long time, right? So there's the same way that the, you know, people have evolved into a faster method of doing things. You can see Things like data virtualization have come up whereby you don't have a lake, right? You instead, you access your systems in methods whereby it makes sense to answer the question that you want to answer, right? Don't have to overlay all of the systems. What question do you want to answer? Which systems do you need to answer those questions? How do you get by with the minimal amount of data that you need to aggregate to answer that question? Data virtualization, that's what it has evolved into. So You have these tools that are doing it, but fundamentally, you still need to understand what do you want to answer, how much time do you want to spend on that.

Yeah, that was what I meant when I said you have to derive from the data the products you need, right? And these products are solutions for certain problems. Totally with you.

Yeah, yeah. We had one other question. which I think we've covered a little bit, but it is interesting if you're sitting here in the middle of all of this and you're trying to figure out where to go. One of our attendees asked, what is your suggestion to small and medium enterprises with having a revenue of around $500 million going forward in terms of digitalization and automation? I mean, where, if you were sitting here looking at this entire landscape and you were you were in the medium range of the market. Where do you start?

I would say do a plan, do a long-term plan, and start with the basics. And what you do, do it well. Don't buy the cheapest application which was built on top of a Haka center that it's— you're only buying it because it's cheap, right? You know, buy good applications, buy applications that solve your problem, not necessarily expensive. Have a plan, but start with the basics. If you don't have a good warehousing system, if you don't have good accuracy, if you don't have good transportation systems, whatever you build on top of that will fail. You need to have very basic— and I'm talking warehousing, but it could be transportation systems— the base of your pyramid has to be solid. And once you have a solid base, as you build your Lego blocks— and if you're a medium company, you will build them slower That's okay. If you're a bigger company, you can invest more, but you will have solid blocks. You don't have to go back and redo it. There's nothing worse than 5 years after you did a warehouse management program, you have to go back and reimplement it again because it's not giving the information you wanted. So that's my only point. Go step by step and do solid investments.

And there are better uses for a hawker center than buying technology, that, that's for sure. Fair enough.

My take on it, adding to Richard's points, is that don't look for the 100% fit. You will never get it, right? Focus on the 80/20, right? If you're good with the 80, go for it. If you're not big enough whereby you can force people to bend to your will, go with 80/20, right? And if you— one thing is the tool and the technology, but the other thing is the methodology. Be very clear on how you want to approach it. Do you want to go large scale, 2 to 3 year project waterfall method? If that's your way that your organization is set up, go for it, right? If you're good at it. If you're not, decide on something and be very clear that if you're going to fail, you're going to fail very fast, right? If something proves to be wrong, that it's wrong very, very fast so that you can recover from that and you can make your adjustments. So you know whether you made the correct decision in terms of technology spend and so on. you are clear on your ethos, whether you are going to do it the traditional conservative long drawn-out requirements, everything phased and waterfall it all the way through, or you're going to pick something, you're going to go as we go, you know, evaluate as we go along. But if you're going to fail, you fail very fast.

Right, right. And Volkan?

Yeah, very quickly because a lot has been said. It's driven by the business plan. So I'm a strong believer that the business plan drives the strategy. So A lot of companies have that plan. They have to review the plan in light of digitization. That's one point. The second point, that's more what Ferhat said. There are low-hanging fruits. There is new technology out which helps you to manage better your ramp or to pick better. And these are very simple things, easy to implement. And then there is that middle piece, which is the big which is in fact around visibility and data. There will be no survival, I believe, 3 to 5 years down the road, or no easy survival, without having data about the business. And building that data should be an important part of the reflection.

Yeah, and also take your time to understand the problem. 90% of the time people come to us with a problem, it's actually a symptom, not the problem. Really dig down and understand what is impacting your business and what impacts your success. And you will see that your first impression is a symptom, it's not the root cause. And if you keep attacking symptoms, you will never get well.

And I'd just add on top of that sustainability as well, to make sure that your business model is sustainable. sustainable using whatever decision you make going forward, right?

And we didn't mention this, but as you're rethinking your supply chain, global sustainability, environment should be part of your equation.

Absolutely.

But what I— Richard, what that triggered in my mind and what I see again and again is that companies go and look for technology and This is the wrong way to do it. They have to be aware what their issues are and then find the technology to solve it. But most companies really go out and look for technology, visibility technology, but maybe visibility is not their problem at that point, right? Planning tools, et cetera, et cetera. So yeah, that's— Maybe the hardest thing to do is to understand what are my issues. And considering that some of these people are 25, 50 years in that business and manage it pretty well, so to have that ability to understand where there may be unknown unknowns are justifies also sometimes an external expert view.

Excellent.

Well, we're, we're almost out of time. Before we go, I want to make sure that we give you guys an opportunity. We wanted to ask if you, if you could give us where— and to use Wolfgang's approach, not the post-pandemic, but our new normal. What are some of the— what are the 3 areas where you have concerns and 3 areas that you see are going to be opportunities? for people in the market as we sort of enter into this new phase?

Wolfgang?

Yeah, my concerns are more on the side we have discussed, which is governments and the lack of alignment. This is a bit of a concern, and of course, if we look into technology, there is a bit of a concern regarding the China-US tech tensions. If I put it into our context, and that would lead to frictions in the market, difficulties with standards, etc. That's a concern. Then I have a concern around the mid-sized and small companies. They need definitely help. A lot of them need help. Help from their larger clients, help from the governments. And luckily, a lot of larger companies know they are only as good as their suppliers and their ecosystem. But these are areas of concerns for me. Opportunities are clearly e-commerce, and with that, everything which is tech and supports digitization. So digitization at large is probably the thing to do. And I believe that COVID-19 has brought to the attention that there is no way around, under, or above digitization. You have to go through that. And the third is something, my last point, which in fact Richard touched upon. There is an enormous opportunity for sustainability It depends on the countries and the cultural context, but in some places there is really the awareness and the thinking has moved that we have to rethink not only our supply chains but the way we have structured our economies and our lives. And I hope that that will continue, but the indications are good and And that will bring up a lot of new opportunities for businesses and jobs.

Berhad, real quickly.

Okay, so following from what Wolfgang was saying, I think I completely agree. Those are very key concerns, right? I think, and things that support those concerns and that has me personally quite scared is that what Richard mentions, people thinking that COVID is a one-off, right? And, you know, we just get beyond this and we are good, so we can go back to our old ways of doing things. So my main concern is that people look at this as an isolated incident, think that, okay, I'll just wait it out and, uh, hopefully things will go back again. And they don't digitize their business, they don't focus on anything like, you know, how do I get myself in the— you know, how do I live with the new normal, right? So that, that's a real concern, and we And we see a lot of people either due to lack of ability or lack of foresight, they are doing this. And that is essentially corporate suicide because it's not going to be easy. It's going to be very difficult for them. There'll be these people who make that conscious decision to actually digitize and they will be able to be a lot more resilient in this future supply chain. And the other thing which is a little more of a nitty-gritty is that people not taking the time to do their business continuity planning, right? We've seen a big focus and shift. A lot of management consultants right now are doing their bread and butter is business continuity planning, right? So they're looking at how do I put together BCP plan, how do I run my operations, and, and, and, and that's, that's a big part of, of the engagement right now. Some people don't have the resources to engage these big companies do that for them. But BCP doesn't have to be a big, big thing. It can be as simple as, do you have a simple SOP that, you know, allows you to fall back on certain manual operations? You have to do it as per what is correct for your business and do it in the right scale. It doesn't have to be big, right? It can be medium-sized. It can be a simple thing as a document, right? So I think that's That's key. People should not take that lightly and they should focus a lot on that. I think the other concern is that the dynamism of the market, the focus away from contract rates into spot rates, into shifting supply chains. If people don't really, you know, take use of this and simply rely on the existing contracts, they'll find that the contracts are not fulfilled. And, and big companies will just walk away from that because there's the penalties are negligible, right? It's, it's mostly, I don't hit this threshold, my rate is slightly lower, I'm okay with that, right? Yeah, that's right. That's something that's of concern as well. Um, I think the top 3 opportunities that I see— am I, am I jumping the gun to talk about the opportunities?

No, no, go ahead. That's what we want to do.

All right, so, so I think following on from that, people who can adapt to a more dynamic price market, whose systems are geared towards being involved with platforms, being involved with automated feeds, being integrated with these systems, and are able to adapt to the dynamic nature of the market will do well. I think people also who are able to aggregate data, you know, there's— I think there's a big opportunity for startups be aggregators, things like the Kayaks of, you know, if there's a Kayak-like company, right? Something that aggregates the data for you across multiple players in the supply chain and presents to you data that, that, that, that is usable for your business. That's another key opportunity as well. And I think the, the, the nuts and bolts focus on digital workforce, people who can actively look at their organization and price contracts, price opportunities, commercial negotiations based on logic, right? What I mean by that is they're able to say, okay, for to bid on this, I need X number of people and X number of bots. That's a very mature automated organization. I've seen organizations that can do that. They actually go into contracts with formulas, right? So it's much easier for them to say, okay, this is how much it's going to cost me to run per kg, to store per kg, to run this amount of volume of freight, right? They have actual algorithms and mathematical formulas allows them to bid on that so that the focus is on digital workforce. And if you can take that and make it such that your sales and marketing teams can use that for their negotiations, and these are mathematical formulas, you are very mature in your digital workforce So that allows you to move a lot faster and be a little lot more nimble in your commercial contract. Yeah.

Richard, we're running out of runway here, so—

Resilience, resilience, flexibility, think the environment as you're doing this. And my last quote would be, if you've been looking to change your WMS or TMS systems for the last 5 years, Just do it. There's no time for waiting. Don't delay a decision another year or two. We see companies that delay, delay, delay. No, there's no more time. Just go out and do it and think flexible. If your systems are not flexible, if you're not resilient, you're, you're going to have problems. Thank you, Frank.

Couldn't agree more, guys. Thank you very, very much for your time and for your insights. And I believe the next step is to go into the Into the lounge afterwards, and it's a great discussion. I very much appreciate it. Thank you for. Thank you, Frank. Thank you, Frank.

Bye.

Right.

See you again.