The Continuous Journey of Kaizening Amidst Turbulent Market Conditions

The acronym “VUCA” has been used a lot recently to describe our current world. VUCA stands for Volatility - Uncertainty - Complexity – Ambiguity, so you can understand why its use has grown a lot lately. Many of the included topics impact supply chain and logistics immensely, such as the conflict in Ukraine, the trade wars, labor shortages, union contract negotiations, environmental concerns, and cybersecurity. Of course, the pandemic and lockdowns are still real threats to our business and way of life but there is light at the end of the tunnel for us logisticians. The barrage of media-driven tech acronyms (RPA, API, OCR, and more) was explored, understood (to some extent), and funded by c-suites who sought solutions to new and old digitalization roadblocks.

Uncertainty is not good for business, and with unknowns on both sides of the supply and demand curves, companies will be left with overstocked inventory or too much demand and not enough logistics to 1cope. Traditional business senses are not enough anymore. This is leading consumers to shoulder additional costs and massive inefficiencies everywhere, but also again silver-lining for logistics companies as doors as the barrage of uncertainty catalysts kept coming from 2019 to mid-2022 forced manufacturers and trading companies to expand transportation budget and look beyond decades-old practices.

Digital Supply Chain Target Visible and Tangible in 2022?

From the shoes on your feet to the device you are reading this on, these goods are being transported around the world by an often-invisible global network of logisticians. The cataclysmic dominos of The U.S. - China trade war, Covid, the Suez Canal incident, and capacity crunch/price escalation are all marker events to the tipping point of 4IR adoption and technological innovation of “significant behavioral transitions from one kind of activity to another”. Since starting this study on logistics technology innovation in China in 2017, there has been a massive change in nearly every tangentially associated industry that logistics is relied upon. As global events continue to put pressure on the public and private logistics network, where are we at the tail end of the pandemic?

The figure below shows an illustration of a thesis we have been exploring, which is to see if we have reached the point of practicality and recognition that digital is the new norm as we transition from a pre-COVID-19 world to a post-COVID-19.

Klaus Schwab succinctly anticipated that “The pandemic and its aftermath have shown that we have not invested enough in the right type of innovation that could make our societies more inclusive, sustainable, and resilient”. The key word here is “investment”. 

The lack of financial investment, in this humble practitioner’s eyes, in strategies to inspire more solution-building intrepid investigators in the model of Malcolm McLean will be the root of future catastrophes.

Lastly, as a perfect metaphor for how “stuck” this industry is and the embodiment of my new acronym (WWMMD- what would Malcom McLean do), was when the 20,000 TEU capacity containership the Ever Given got stuck for five days in the Suez Canal1. A single disruption like this caused shockwaves throughout the global supply chain and reportedly caused $10 billion in damages every day it continued2. The lack of inter-organizational connectivity and data-driven analysis during and after Ever Given got stuck continuously demonstrated that the industry is bloated with oversized, slow-moving giants and ready for nimble experts who leverage modern technology and pragmatically attack real problems.

Notable Recent Events

• Logistics Unicorn FourKites acquired the SAP challenger Haven (comical) to later find out that: “Our analysis has revealed that Haven modules are one of our highly unprofitable product lines.” CEO Elenjickal said in an email. “It is costing us almost $50/container to serve the documentation module and we are not seeing willingness by BCO’s to pay anywhere close to covering the costs. With that said, we are sunsetting the Haven booking and documentation modules this year”.

• TradeLens, a Maersk-IBM collaboration (best in class) throws in the towel: “TradeLens was founded on a bold vision for global supply chain digitization as an open and neutral industry platform. This vision is centered on the ability to enable true information sharing and collaboration across a highly fragmented industry globally. Unfortunately, such a level of cooperation and support has not been possible to achieve now and A.P. Moller - Maersk (Maersk) and IBM have announced the discontinuation of the TradeLens platform.”

• Southwest fails and tech is the scapegoat: “While most carriers were plagued by winter storms over the holiday weekend, only Southwest was forced to cancel a majority of its trips, pointing to systemic scheduling issues that have plagued the airline for years.” What a joke, scheduling issues in 2022? Get out an excel sheet and have a war room – don’t rely on the toxic standards of airline schedules as they are about as intuitive as the corporate policies that don’t let their customer service people give logical assessments on go/no-go and default to their scripts.

In short, we are experiencing disruptions that are not only here to stay but are going to be increasingly more unpredictable. For logistics veterans, these recent challenges are nothing new. However, we saw a large influx in interest in this space and then a rapid decline. There were a few fish dinners served, but too few learned how to fish.

"The cataclysmic dominos of The U.S. - China trade war, Covid, the Suez Canal incident, and capacity crunch/price escalation are all marker events to the tipping point of 4IR adoption and technological innovation"

NNR’s Drive for a Frictionless Customer Experience

NNR operates with the word OMOTENASHI as our root, which was brought to a global stage by the 2020 Tokyo Olympics. By thinking from the client’s point of view, making sure every aspect of the experience connects smoothly, and treating every interaction with respect, we aim to make the full business cycle as frictionless as possible.

To achieve this, we have launched NNR Connect, a state-of-the-art client portal for all business needs. Its amazing connectivity across the logistics experience highlights our commitment to continuously serve the customer better and save them time, energy, and mind.

In addition, we gathered more than a dozen industry experts and connected professionals and published one of the first books on this exact topic. Aptly titled The Digital Transformation of Logistics: Demystifying Impacts of the Fourth Industrial Revolution, we outline many more industry examples and technological impacts, as well as how they would change the world, your world, moving into the future. The book is out now through our publishers Wiley and Amazon!