Maersk and IBM joint venture to apply blockchain to global supply chains

Logistics company and container shipping giant A.P. Moller – Maersk and technology company IBM have announced their intent to establish a joint venture to provide efficient and secure methods for conducting global trade using blockchain technology.
The new company is to be built on open standards, offering a global trade digitisation platform designed for use in the movement of goods across borders and trading zones to provide more transparency and simplicity.
A distributed ledger technology, blockchain establishes a shared, unalterable record of all transactions that take place within a network and then enables permissioned parties access to trusted data in real time.
Maersk and IBM will use blockchain technology to power the new platform, as well as employ other cloud-based open source technologies including artificial intelligence (AI), Internet of Things (IoT) and analytics to help companies move and track goods digitally across international borders.
“This new company marks a milestone in our strategic efforts to drive the digitisation of global trade,” said Vincent Clerc, Chief Commercial Officer, Maersk, and future Chairman of the board of the new joint venture. “The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit.
“By joining our knowledge of trade with IBM’s capabilities in blockchain and enterprise technology, we are confident this new company can make a real difference in shaping the future of global trade.”
Bridget van Kralingen, Senior Vice President, IBM Global Industries, Solutions and Blockchain, added: “The major advances IBM has made in blockchain have shown that the technology can foster new business models and play an important role in how the world works by building smarter businesses.
“Our joint venture with Maersk means we can now speed adoption of this exciting technology with the millions of organisations who play vital roles in one of the most complex and important networks in the world, the global supply chain. We believe blockchain will now emerge in this market as the leading way companies seize new untapped economic opportunities.”
IBM and Maersk began a collaboration in June 2016 to build new blockchain- and cloud-based technologies. Since then, several companies have piloted the platform, including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands and the US Customs and Border Protection.
The joint venture will now enable IBM and Maersk to commercialise and scale their solutions to a broader group of global corporations. General Motors and Procter and Gamble and Agility Logistics have already reportedly expressed their interest.
 
 

Australian courier service Zoom2U strengthens Uber-style approach

Australian courier service Zoom2U has acquired Freight Match, an Australia-wide online service that matches transport operators with customers wanting to move goods.
Through the new addition, Zoom2U customers will have an alternative delivery option for interstate shipping, employing road freight carriers and air freight operators to deliver larger items such as pallets, building materials and shipping containers.
For interstate deliveries, goods can essentially ‘hitch a ride’ with vehicles that are already traveling to the required destination.
Steve Orenstein, CEO, Zoom2U, said the Freight Match acquisition would enable the company to apply the same online booking and smart delivery tracking features introduced with Zoom2U to the freight delivery industry.
“Much like courier delivery, freight transportation is an area that can be optimised significantly,” he said. “The problem is that existing services use the same technology systems that were used ten years ago, making delivery jobs unnecessarily complicated.
“Bringing Freight Match into the fold gives us an opportunity to upgrade its capabilities and offer a much better experience for customers. The reality is that Australians have become used to tracking their taxis and food on a map in real-time, and there’s no reason why they can’t do the same for package deliveries.”
Freight Match has a network of more than 2,000 transport operators in Australia, offering them a consistent source of new income by tapping into spare capacity without having to chase clients or fuss around with paperwork and payments.
Zoom2U recently celebrated its third year of operation in Australia, in which time it has secured major deals with DHL and Big Commerce, and gone from 250 parcel deliveries a day to more than 35,000 a month. It now has a network of more than 500 couriers around the country, and has raised $3 million in funding to date.
“Zoom2U has carved out a sizeable niche in Australia for customers who need a reliable courier for VIP, three-hour, same-day or after-hour service,” said Orenstein.
“We’ve had customers use Zoom2U for everything from getting spare keys sent over when they’ve locked themselves out of the house to express couriering a forgotten passport to the airport.
“With the impending local launch of Amazon, online retailers need to be looking at how they can overhaul their delivery infrastructure to match Amazon’s immediacy and breadth of shipping options. The recent acquisition of Freight Match means Zoom2U is well-placed to become the alternative delivery system of choice in Australia.”

UC Logistics launches compliance app for freight operators

Perth-based UC Logistics has launched a new transport platform to enable heavy-haulage providers to meet Australia’s strict compliance standards.
The online business-to-business platform, iFR8, allows clients to receive and compare quotes and book freight movements with ‘premium’ Australian transport providers, and gives drivers constant reminders of their Chain of Responsibility obligations.
Urszula Kelly, Founder and Managing Director, UC Logistics, said the company launched the transport platform after hearing concerns that those already in the marketplace had been launched by companies taking no responsibility for ensuring their service providers, putting their goods at risk of loss, damage or delay by operators unaware of their legal obligations when receiving and transporting goods.
Kelly said several companies contacted UC Logistics Australia about their worries, asking them to come on board with their apps.
“When we asked how they ensure their providers comply with the law, they didn’t have an answer,” she said. “This prompted us to develop our own platform – iFR8, which is distinctly different from the others.
“We engage only premium quality heavy haulage providers who are accredited, adequately insured, qualified and extensively experienced in their field.
“We take safety and compliance very seriously and spend a significant amount of time on screening operators that want to work with us.”
The platform offers one contact point for all logistics requirements, regardless of whether the job takes one provider or many, so clients no longer need to speak to numerous suppliers to manage multiple quotes and jobs.
In addition, it provides a digital paper trail of all freight movements through a web portal and mobile app.
Kelly noted that some of the smallest companies provide the best service at the best rates, adding that iFR8 allows them to compete on a level playing field.
“iFR8 offers equal opportunity for all providers – regardless of how small their fleet,” she said.
“We welcome collaborations with suppliers of the highest quality, who meet our strict prequalification requirements and who have a proven record of providing ‘beyond expectations’ customer service.
“There are many ‘wannabe’ transport businesses out there at the minute, this is why it makes perfect sense to promote suppliers that are passionate about the safety and passionate about the transport industry in general – we are excited about collaborating with them.”

Found in translation – Exporting the Australian logistics mindset

This article first appeared in the February/March 2017 issue of Logistics & Materials Handling.
Three Australian logistics veterans have been tasked with rethinking Japan’s supply chain strategy, mixing the traditional and the modern to achieve unprecedented growth.
Even when you’re the biggest name in your market, that’s no reason to rest on your laurels. While Coca-Cola is the market leader for beverages in Japan, there are five other major players vying for a share of the action. Market pricing has been declining steadily over the past 16 years, putting a squeeze on margins and forcing beverage suppliers to stay vigilant to remain relevant. According to Bruce Herbert, Chief Supply Chain Officer at Coca-Cola East Japan (CCEJ), consolidation and diversification have been key strategies for many in the industry. “Coke in Japan is not just carbonated drinks, over half our volume is sugar-free teas, coffee and water,” he says. “A very strong innovation and new product pipeline has to be filled every year from our own plants and a network of contract packers.”
Covering over half of Japan and serving a population of 60 million, Coca-Cola distributor CCEJ is in a constant state of metamorphosis, always looking for ways to increase efficiency and cut costs. The US$6 billion ($8.2 billion) bottler was originally formed in 2013 through the merging of four smaller bottlers and has since absorbed a fifth one. It will soon merge with Japan’s next biggest beverage distributor – Coca-Cola West – and cover some 90 per cent of the market. Set to take place in 2017, the merger will increase the company’s value to US$10 billion ($13.7 billion) and increase its assets from eight factories to 17, 250 sales warehouses from 150, and 800,000 vending machines from 400,000 and 3,500 daily semi-trailer loads shifted per day from 2,000.
CCEJ recruited supply chain experts from around the world, including Bruce, to come to Japan and lend their expertise and, as a result, has been hugely successful in cutting costs and increasing profit. Bruce is joined by two other Australian supply chain experts, cherry-picked for their knowledge of the beverage and retail industries with decades of experience working with supply chains in Australia, Asia and Africa – Edward Walters, now Senior Executive Officer, Planning, Logistics & Distribution at CCEJ; and Distribution Transformation Manager, David Sim.
The Japanese market has presented a challenge, thanks to the country’s complex traditional business etiquette, though Bruce found its workforce’s strong work ethic and customer service to be worthy of admiration. “In Australia we take for granted that change and improvement are part of working life,” he says. “Especially at [Coca-Cola’s Australian-based bottler, ed.] Amatil, where supply chain transformation has been progressing since the mid-90s and many world-leading initiatives were started. Coming to a business which was effectively five small Japanese businesses just three years ago, I have realised just how far ahead some of those things we were doing in Australia were.
“In one way we have a big advantage of having lived in what will be ‘the future state’ for the supply chain here. Of course, there are many things to be learnt from the Japan model as well, but knowing that changes needed here have worked elsewhere gives us a big head start.
“I respect the Japanese working style. My Japanese colleagues are extremely hardworking and focused on detail, in a way that most Australians would find very challenging. Workers regularly work very late in the office, never hesitate to stay back or work over weekends and don’t give up on a problem. So much so that Government and companies are focused on encouraging people to relax more and take more time off, take more holidays etc. – this is definitely not a problem in Australia.”
The Japanese approach to life in general, including even how seemingly ‘logical’ issues are approached is quite different to the West, according to Bruce. “Not better or worse, but different,” he adds. “Whilst basic human reactions and motivations are the same, the way they express themselves is different. Relationships are much more important and sensitive here, as is loyalty to the business or community. All of these things translate into business culture and relationships.”
In some aspects, Australia’s logistics sector could benefit from observing the Japanese workplace, says Bruce. In particular, he believes that the value placed on quality and customer service in Japan would do wonders for Australian business. “Japan is surely the most quality-focused country on earth, and customer service is seen as an extension of quality,” he says. “Near enough is not good enough, perfection is sought after and worked towards at every level. It is deeply ingrained into everyday life – I don’t think we would ever have to ‘train’ for customer service as it is intrinsically understood. This often leads to failures by multi-national companies who don’t understand what Japanese consumers and customers expect. Likewise: quality. Australian businesses may be more ‘lean’ but often do so at the cost of customer service and quality.”
CCEJ looked at successful logistics strategies in use around the developed world when searching for ideas to rejuvenate their own approach and, according to Bruce, flexibility and a laid-back Australian style have been instrumental in ‘cracking the code’ for the company’s logistics strategy. “I think openness to different ideas has been key,” he shares.
“I experienced some changes put in place here earlier by some of our colleagues from the US, but many of them did not work as they were simply ‘cut and pasted’ ideas from the US. Aussies may be proud of their country, but they usually don’t expect that they have all the answers.”
Edward likens the challenge of solving CCEJ’s issues to the task of unravelling a badly tangled set of Christmas lights – difficult to unravel without breaking a light and stopping the business. “We discovered that, over many years on the quest to providing high service and quality, network efficiency at CCEJ had been eroded severely,” Bruce adds. “This had happened steadily and high transport, warehouse and other costs had been accepted as ‘normal’. As there was little benchmarking of supply chain costs outside Japan, and since the costs were not easily ‘visible’, they had not been tackled by investment or progressive change either and a gap grew between global practice and Japan Coca-Cola practice.”
In order to ‘crack the code’, Bruce shares that two major changes needed to be introduced. “First was a painful implementation of a new SAP ERP system which replaced multiple legacy systems and gave central visibility to live data,” he says. “Second was more instinctive – we cut inventory by about 20 per cent – a very brave move in Japan – and thereby decongested the network, eliminating double handling, waiting times, extra transport and product write-off.”
A third big change, which is currently in progress, involves moving inventory upstream, closing small sales centres and cross-docking others, together with possible investment in new warehouses at plants and picking automation. CCEJ is already seeing positive results from the change, with over 25 billion JPY ($290 million) supply chain savings both from manufacturing and logistics/distribution improvement since its inception in 2013.“This year, heavy transport cost is down 20 per cent and write-offs are down 50 per cent,” Bruce shares. “So we are already almost halfway to the long-term cost reduction goal after just one year.” The 2017 merger of Coca-Cola East Japan and Coca-Cola West is expected to create opportunities for further savings.
Bruce attributes his team’s success to a combination of factors, from slow and cautious implementation of changes to constant re-evaluation of direction. “We didn’t approach this as a ‘project’,” he says. “We tackled this as a management challenge – to implement changes, monitor them closely and adjust as we went along. In that way the original ‘plans’ were gradually changed – with successes amplified and failures dropped quickly. Good real-time data access and manipulation was crucial here.
“Thanks to methodical and detailed execution of strategies by our team here, the changes we made to inventory levels, planning processes, truck routing, pallet configurations etc. were executed without impacting customers or quality. This meant that the costs we saved were not lost in upset customers or lost sales, but could flow directly to the bottom line.
“We discovered a clear and costly link between inventory levels and transport costs, which had never been uncovered before. I’d like to say we found this by a big analytical study, but actually it only became clear by trial and error – which is why an army of experts and analysts had failed to find it before.”
CCEJ now encourages its employees to make suggestions for improvement of processes, and implements over 100,000 small innovation ideas per year on ways to improve quality, safety, service and cost.
The notoriously rigid traditional Japanese business culture presented a particular challenge for the CCEJ supply chain team, Bruce explains, though they were still able to achieve “massive change and results” thanks to their measured approach. “Resistance to change remains a constant both within the business and with customers and some suppliers,” he says.
“This is largely due to the extremely high standards set by customers and consumers and fear of making big mistakes. We were able to overcome this by making many small progressive changes, and avoiding – for the most part – big bang or sudden, unplanned change.”
Bruce believes that if applied in Australia, his team’s strategy could result in similarly positive outcomes. “The approach we have taken here has been based on numerics and data combined with good management routines, not just ‘hardware’,” he shares. “It can therefore be applied anywhere, to any problems.”
The CCEJ supply chain team have developed their own version of the revered – though oft-misunderstood – ‘Kaizen’ (kai: change, zen: good) business philosophy whereby big changes can be achieved through small, continuous improvements in all aspects of business. They are confident this method could be applied with success in any business environment. Bruce adds, “All I know is that after 35 years in this game there has never been a change as big and fast as what this team has achieved here in Japan this year.”

DB Schenker, DPWA and Hamburg Sud join forces for blockchain trial

One of the largest and most comprehensive trials of blockchain technology for global supply chains has successfully ended with a new Australian-developed blockchain security architecture from TBSx3 which has the potential to raise global supply chain security to a military grade.
The TBSx3 system uses military-grade 44-alphanumeric-character security cryptography, compared to the six-digit public cryptography which up until now has been commonly used.
The new TBSx3 benchmark was successfully used on an 8,100km global road-and-sea supply chain stretching from the wine-growing Coonawarra region of rural South Australia to the port of Qingdao in north-eastern China, which ended this week.
Partners included DP World Australia, DB Schenker, Hamburg Sud and Australian wine producer IUS, which exports seven product lines into the rapidly growing Chinese wine market.
KPMG advised TBSx3 on the trial and verified the custodial handovers for the integrity of the product on the 8,100km land-and-sea journey. Furthermore, KPMG simulated the customer at the end of the trial by receiving, validating the product and checking if the system could potentially detect duplicates.
Ron Koehler, CEO, DB Schenker Australia and New Zealand, said, “In a globalised world, the safety and security of supply chains for the medicines you buy, the food you eat, the parts that are used for your cars and the planes you fly in cannot be taken for granted.
“Supply chain security affects everyone – consumers, companies, communities.
The Hon. Arthur Sinodinos, Minister for Industry, Innovation and Science, added, “Blockchain is an exciting technology with great potential for Australian businesses and SMEs. It promises to reduce costs, create new market opportunities and transform industries.
“Importantly the technology provides a new opportunity for Australian exporters and their customers to verify the authenticity of their products, protecting the reputations and brands of both Australia and Australian business.”
The successful completion of the trial between Australia and China is the first of a planned series with multiple partners which will “simultaneously test the robustness of TBSx3 blockchain technology for every custodial link in global supply chains and also verification protocols for both bulk product and individual items for retailers and consumers at the end of the chain,” according to TBSx3’s Chairman, Anthony Bertini.
“In terms of the numbers of partners simultaneously involved and the challenges posed for resolution of integration with multiple existing proprietary security systems we believe this can be developed to become a new security benchmark.”

DB Schenker wins freight forwarding and customs clearance contract

DB Schenker has announced that it has been awarded a contract to provide international freight forwarding and customs clearance services to Chevron Australia.
The three-year contract covers freight logistics movements as well as customs clearance requirements for Chevron’s interests in Western Australia.
To support the contract, DB Schenker will utilise its global network of oil and gas offices. The operations team in Perth will be supported by the DB Schenker iTeams software solution that allows for full visibility and tracking through all stages of the logistics cycle.
“We are proud to continue our relationship with Chevron. With our dedicated people around the world we have a strong record of operating safely and efficiently even on the most remote sites,” said Frank Vogel, Director Projects/Oil & Gas, AU/NZ. “The contract will support our goal to become the market leader in the industry by 2020.”

Australian rail industry supports global marking standard

The Australasian Railway Association (ARA) and GS1 Australia have announced that the ARA Board recently confirmed its support for the adoption of GS1 open global standards for identifying and marking (barcoding and/or tagging) components used across the Australian rail industry.
The decision by the ARA Board has been driven by the industry-wide Parts and Components Identification Project in rail that commenced in 2015, followed by the launch of the new Implementation Guideline for the Effective Management of Inventory in the Australian Rail Industry at AusRAIL 2016. The Australian Rail Industry is now being called to respond to a Call to Action to standardise the way materials are identified.
Danny Broad, CEO, Australasian Railway Association, said the announcement by the ARA Board to support the adoption of common standards is a significant milestone for Australia’s rail industry.
“We invite the Australian rail industry to join us in embracing a Call to Action to reduce costs, improve safety, reliability and quality using GS1 standards. The adoption of GS1 standards will provide a common framework to support the current challenge of managing efficient Maintenance Repair and Overhaul (MRO) processes,” Broad said.
The objective of the Call to Action initiative is to implement GS1 standards across the Australian Rail Industry by 1 January 2019. This initiative is important from the perspective of quality assurance traceability and cost savings, the ARA and GS1 said in a joint statement, adding that the implementation of GS1 standards across the Australian rail industry is a critical foundation for the subsequent phase of full-lifecycle tracking of components from acquisition to disposal – essential for the effective implementation of ISO55000 Asset Management Standards.
Maria Palazzolo, Executive Director and CEO at GS1 Australia, said, “A level of effort will be required for the implementation of these standards as many rail operators, suppliers, manufacturers and contractors are at various stages of barcoding their products, with some rail organisations already well advanced and actively working with their suppliers.”
Bonnie Ryan, Senior Manager – Trade, Transport & Heavy Industry, GS1 Australia added, “Calling on industry players to work with us gives the Australian rail industry a unique opportunity to collaborate with a standardised approach for consistently identifying and marking components and assets.”

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