Podcast: Dave Anderson on the Evolution and Future of Logistics

Highlights from the Conversation

Game Changers: Adapting to Freight Deregulation and Globalization

• By the early 1990s, the number of freight carriers and 3PLs expanded as companies realized that they could go beyond their own walls and use outside suppliers for transportation and warehousing.
• Globalization began to hit around the same time, and had a huge impact as companies realized it cut both ways. They had to look beyond their home markets to find customers, and be ready for outside providers to encroach on their local markets. The successful ones learned to protect what they had and ride the globalization wave.

Starting a VC Firm Post-Dot Com Bubble

• Dave and his partner Dan Dershem started Supply Chain Ventures LLC in 2002 – just after the internet investing bubble burst.
• Supply chain wasn’t a hot topic back then, and no one else seemed interested in solving supply chain issues with technology until at least five to eight years later. This was in spite of the fact that supply chain typically manages 50% to 60% of a company’s spend.
• They succeeded where others failed because they invested in companies that could create value in traditional supply chain, using tech to solve the real problems that logistics had. They weren’t trying to just replace them.

Looking at the Current Landscape – and Beyond

• Supply chain has emerged as a true competitive advantage for companies. Amazon is the poster child for this kind of change.
• The outsourcing trend continues, forcing companies to look beyond their walls for new customers, suppliers and opportunities.
• Omni-channel delivery to customers–– whatever works as quickly and easily as possible–– has emerged as a big driver, and will continue to drive a lot of what’s going on. Dave doesn’t see this trend ending; in fact, companies will have to continually evolve to meet changing customer demands.
• The emergence of real time data has made a big impact on sales and operations planning, because it’s harder to make decisions when you’re trying to determine inventory and production levels using 3-month old data, rather than real-time sell through information plus social media product reviews.
• Machine learning can play a role in finding patterns in the data. For example, we might learn that when the weather’s bad, drivers can’t do as many deliveries. Instead, we can plan for fewer deliveries to avoid irritating customers.
• There’s been a 30x jump in the emergence of new tools over the past 17 years. The innovators are still often supply chain practitioners with new ways of doing things. But now they’re mixed in with people who have no experience in supply chain but who can bring in new toolsets, like AI and robotics. In spite of all the options, there’s still tremendous resistance to change in many companies.
• Enterprises have often invested millions into legacy software and warehouse hardware they currently use, and aren’t interested in replacing them. They are however, more open to tools that sit on top of current systems and solve specific problems.
• The newly trained, tech-enabled millennials aren’t in charge of supply chain just yet – but they are going to revolutionize supply chain decision making over the next decade.
• Autonomous transportation, IoT, and blockchain are promising, but won’t be ready for a while yet.
• Supply Chain Ventures is investing in these five spaces: embedding AI in planning software, apps that identify bottlenecks, management of e-commerce returns, supply chain visibility, and apps that work on sustainability and traceability (for example, to make sure goods aren’t manufactured with slave labour).

Dave’s advice: supply chain professionals need to upgrade their skills and get comfortable working hand-in-hand with the C-suite.

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