The Rise of Autonomous Logistics: ERP’s Role in Driverless Deliveries
In this interview, we delve into the dynamic logistics and supply chain management world, where cutting-edge ERP technology paves the way for revolutionary changes. Anton Ivanov, senior product manager at FURA, shares their wealth of knowledge and experience, offering a glimpse into the future of logistics powered by ERP systems.
Anton, explain the principle of how ERP systems transform logistics and supply chain management today. How has it arisen since you started your career there?
ERPs transformed logistics and the supply chain by streamlining documentation, implementing just-in-time deliveries, and consolidating all supplier and document data into one software program in the 1990s. I started working in logistics in 2012 and have since witnessed significant changes in ERPs. Let’s explore these changes, which are pretty drastic. ERPs have moved to cloud technology, making SaaS formats increasingly popular with ERP developers.
Integrations are also increasing, and ERPs are now deeply related to software in various industries. It is great to see the industry moving away from EDIs and toward APIs for integrations. Back in 2017, I was still using FTPs and EDIs to retrieve driver’s licence data for my company’s ERP.
Third, ERP systems have significantly improved their user interfaces and user experience. It’s now rare to find a command line in an ERP, which was there in the 2010s.
Fourth and most important, ERP solutions have increased visibility into the supply chain. We have almost real-time access to information about the shipments, all needed data is at our fingertips.
ERP technology has come a long way in recent years. Could you highlight some key achievements or innovations that have had a significant impact on logistics operations?
The Internet of Things, particularly RFID technology and telematics like GPS, has improved ERP data considerably. RFID tags provide real-time load info, increasing supply chain visibility, cutting excess inventory, and supporting data-driven decision-making.
The simplest metaphor I can bring is that you now know what’s going on with your suitcases in the airport because of RFID technology. The more complex example is the mobile app I developed at my previous tenure which allowed for automatic statuses changing in the ERP when the driver was close to the origin or destination. When the truck was close to the origin, the status changed to “Loading”, when to the destination, status was “Unloading”, there were more scenarios, but you grasped the gist I believe.
Mobile apps help ERPs stay up-to-date with current supply chain changes by letting field employees access ERPs on-the-go, updating inventory more efficiently, and offering better ERP accessibility than in the past.
Analytics improve ERPs by giving a structure to predict future supply and demand, analyze data, and make quick data-driven decisions.
Finally, it’s important to realise the potential of APIs because they enable ERPs to share anonymous data with other players. For instance, the biggest US load board, DAT, provides paid access to origin-destination pairs with rates through its API to other TMSs, ERPs, and software solutions of the like.
AI is a new fashion. How is this technology involved in business and what practical applications do you foresee in the near future?
It’s interesting that you mentioned foreseeing because it’s an area where ERP systems are good when they have AI inside, allowing ERPs to efficiently forecast supply and demand trends by thoroughly analysing historical data, making basic projections. AI-enabled ERPs can analyze previous data to identify patterns and correlations, providing precise insights into future market conditions. This helps businesses to make informed decisions and adjust to changing circumstances.
AI has widespread advantages within the ERP ecosystem, particularly in the form of AI-powered chatbots seamlessly integrated with ERPs. These chatbots work as virtual assistants, helping users in system navigation, answering users’ questions, and providing step-by-step guidance. This not only boosts the user experience but also accelerates task completion, simplifying learning curve for new ERP users.
Artificial intelligence is crucial in optimizing logistics and supply chain management routes. AI can analyze lots of information, like traffic patterns, weather conditions, and delivery limits. This lets AI find the most optimal routes for shipping. Unlike humans, AI is so speedy and accurate at this task, which means cheaper transportation and faster shipments.
I worked for one of the ‘Ubers for trucking’ companies five years ago and witnessed how effective AI can be in digital freight matching. The most challenging tasks for carrier sales specialists involved finding the closest available truck to the origin, verifying the carrier’s insurance and licenses, assessing the driver’s preferences for backhauls, and signing up the carrier. After we integrated with all the necessary databases, AI started saving time by quickly assigning carriers that were already in our database. This speed was crucial in logistics, especially for loads that required short notice. The real challenge was reaching out to new drivers who were not yet in our database; that’s where a live human steps in and does the talking. I believe that over time, even this challenge will disappear. Nowadays, DAT is successfully using digital freight matching without human involvement thanks to its extensive database of shippers, carriers, and brokers.
Lastly, AI makes the ERP more accurate and secure because of its data validation functionality. It checks data input into the ERP system throughout different company’s units and company business process steps. Mistakes are caught and fixed automatically. Suspicious or possibly illegal transactions are also identified by AI programs, safeguarding the accuracy of financial and operational data. This preemptive validation of data reduces errors, boosting the dependability of the ERP system.
In short, adding AI features to ERPs greatly improves their capability to predict things, simplify procedures, improve routes, and confirm data. This functionality allows companies to use data to make decisions, enhance efficiency, and maintain accuracy, ultimately boosting their competitiveness and success in today’s turbulent market.
Is there a blockchain presence there? Usually, customers demand everything to be transparent in the supply chains. Can you share examples of how ERP and blockchain work together to create more traceable and secure supply chains?
Blockchain was first made for digital currencies but I think the second-best area to utilize its potential is in supply chain management and logistics.
Smart contracts and ERPs are a happy marriage for sure. These contracts can automate many procurement, contract execution, billing, and payment processes, simplifying supply chain operations. Also, they can play a crucial role in vendor management by automating tasks like evaluating vendor performance and releasing payments based on predefined criteria.
One of the principal benefits of blockchain in supply chain management is its capability to facilitate cross-border transactions. By creating a single framework for international trade parties, blockchain reduces the complexity related to currency conversion, various regulatory frameworks, and many intermediaries.
Additionally, its built-in function of recording every step of a transaction in an unchangeable and transparent framework significantly enhances privacy, security, and anti-fraud measures within the supply chain. This transparency builds trust among users and quickly identifies any issues.
Blockchain has a valuable application in supply chain and logistics, providing benefits beyond its original use in digital currencies. Its ability to automate processes, simplify cross-border transactions, and increase security make it a valuable tool for today’s supply chain. This promises to enhance efficiency, lower costs, and improve overall transparency and trust throughout the whole supply chain.
Autonomous logistics, including autonomous vehicles and unmanned aerial vehicles, is already on the horizon. What role does your profile play here in the development and implementation of these technologies and what advantages can we count on?
Unmanned vehicles will change the way logistics work, but they will still deliver things to people at the end of the day. So, people need to keep an eye on their orders, and ERPs will collect all the data from drones and driverless trucks.
Employees can see all the RFID and telematics data with the ERP and get updates about their shipments on time. We can simplify inventory management by letting ERPs handle most of it. The ERP system can talk to self-driving vehicles, monitor when they take item A from warehouse B and order more item A to replace it.
Also, the combination of ERPs and self-driving vehicles can streamline a day-to-day logistics routine. ERPs get a customer order and promptly assign it to a self-driving vehicle in the vicinity. The self-driving truck delivers the order and the ERP system checks the paperwork (if it were electronic, but it currently isn’t). The system pays if everything is correct or alerts a human worker to handle any issues. These simple practices can boost truck utilization rates and profits with the same number of trucks. When the vehicle needs maintenance, the ERP system can either inform the fleet manager or schedule an appointment at the repairs shop.
In conclusion, integration between autonomous vehicles and ERPs will save much of logistics employees time to concentrate on the important and creative work requiring a human being’s attention. Developers should create triggers to escalate such things to human workers when autonomous vehicles come into play and ERP will be a good channel to get these things done.
How do ERP systems help logistics companies build sustainable supply chains and what strategies can they use to adapt to unexpected challenges?
ERPs are effective in managing crisis situations because they give decision-makers important information they need to act quickly. This information is presented in easy-to-understand graphics and can help identify problems immediately.
It’s important to remember that in the first place all the crises should be prevented under the hood of your ERP and crisis management is the last resort and is a matter of fact an exception management tool.
In a perfect world, excess inventory should not be a problem for ERPs tailored to the company’s needs that implies having built-in functionality to prevent it by using forecasts created by AI or other algorithms. Your tailored ERP can also propose or carry out resource reallocation to guarantee the delivery of the most important products and keep the key accounts happy even during crises. ERPs’ financial modules decrease the risk of suboptimal cash flows by identifying additional costs or increased cash flow in comparison to previous periods.
Here’s the framework on how we tell something is off with the figures we see in our operations. ERP pushes the data to Power BI and Power BI parses it and transforms into the graphs and gives access to the graphs by various company’s units. To identify that company is going in the right direction with the needed pace, we do the planning and feed Power BI with long- and short term plan figures. When we are slowing down, Power BI tells or screams that the projections are far from the reality and then we convene and start thinking how to fix it. This is a monthly exercise, very reflective.
ERP implementation can be a complex process for logistics companies. What common problems have you encountered and what tips can you offer to ensure a successful ERP implementation?
Using ERP on imperfect business processes won’t really work, so first you need to figure out which old processes to remove, unnecessary steps to cut, and manual tasks to automate.
The hardest part of putting an ERP system in place is getting the company’s processes in order before installing it. Usually, there are a lot of things that need fixing, so it’s important to choose which processes are the most important and prioritize them in the ERP implementation roadmap. When implementing an ERP system, it’s crucial to rank changes using frameworks such as ICE or RICE for effective execution.
Mind applicable legislation issues, especially if the ERP system is integrated into a multinational company. The biggest problem here is to balance between the lawyers’ recommendations, which are usually not quite easy to comply with, and the deadlines for the ERP implementation.
Understand which entities should integrate into which ERP modules and their dependencies. Integrations are the most critical and challenging aspect when implementing an ERP system. Once the ERP framework and database schema are set up, adjusting the analytics and reporting becomes an intriguing and challenging process that needs a committed team.
At one of my tenures, our company acquired a logistics broker in the US to launch an ‘Uber for trucking’ with our own ERP, which we wanted to integrate into the broker’s processes. When the product team analyzed the business processes that were in place, we realized that it would be pointless to integrate ERP into carrier assignment processes that needed to be streamlined, billing processes and policies that needed to be updated, and to automate the purchase order sending that needed to be re-phrased and amended. In other words, we rolled up our sleeves and changed all those and much more first and only after, initiated ERP integration.
No doubt, the issue of cybersecurity is of paramount importance for the protection of supply chain data. Could you tell us more about cybersecurity measures and best practices that logistics companies should prioritise when implementing ERP systems to protect their digital assets?
Data storage is important: either make sure your IT team regularly backs up your database or use a reliable provider like Amazon Web Services where everything is taken care of. Regulations and requirements go together with storage standards, so make sure you comply or hire a specialist to ensure compliance.
However, it’s crucial to train people on hardware and software standards once they’re in place. First, people should know how to respond to a data breach and how to prevent one through measures like password policies and not sharing personal account credentials. It’s beneficial to conduct a security test periodically to address any shortcomings found by testers.
As database structures and architectures are constantly evolving, it’s crucial to adjust security guidelines regularly. Neglecting such updates too often contributes to data breaches.
For example, many new products I dealt with share a similar problem – employee roles usually lack permissions. Developers and the product team are usually either unaware of it or are working on something more critical. As a result, employees seek workarounds. The most obvious workaround is to share the superadmin credentials among the employees, but it is risky because if somebody does something harmful, causing heavy financial or reputational losses, nobody can prevent it. So, if you are facing this or a similar problem, it is better to contact the devs. If these folks are busy or unresponsive and you can’t wait, set up additional validation steps for the superadmin role and log all the important actions.