Fall event highlights - DB Schenker in pursuit of the predictive supply chain, with Infor Nexus

Profile picture for user jreed By Jon Reed November 5, 2019
Summary:
First up in my fall event highlights - a supply chain customer pursuing a large scale network transformation. At Inforum 2019, DB Schenker gave me their progress report.

Joachim Schaut, DB Schenker
Schaut of DB Schenker at Inforum 2019

Supply chain software has been around about as long as ERP software, but let's face it - as a software category, it's probably got an even clunker legacy reputation.

But is that changing? To get anywhere near the "connected supply chains" we hear so much keynote hype about, supply chain software needs a makeover.

That's why I was eager to talk to an Infor Nexus customer at Inforum 2019. Even better, the customer, DB Schenker, is pursuing a next-gen supply chain at a global level. So what have they accomplished so far?

That story was told at Inforum 2019 by Joachim Schaut, Head of Ocean Solutions Europe at DB Schenker.  Infor acquired GT Nexus in 2015 to bolster it's Cloud Suite SCM offering. Schaut's story with GT Nexus goes back quite a bit further - back to when they signed on with GT Nexus in 2002.

But influencing the future is what counts. DB Schenker weighs in on that via Infor's Product Advisory Council for Logistics Source Providers (LSPs). The scope of DB Schenker puts Infor Nexus to the test. Headquartered in Essen, Germany, DB Schenker employs more than 90,000 workers globally.

Algorithmic supply chains - what's next?

Schaut is head of DB Schenker's Ocean Solutions Europe - that's the division that runs Infor Nexus for its supply chain operations. Ocean Customer Solutions, or OCS for short, is boldly pushing into predictive networks. So where does that stand? Is the buzzword bonanza of machine learning, AI, and IoT relevant? As Schaut told me:

We are, as usual, one of the early adopter customers with Infor Nexus Predictive ETA, and all the live visibility, live ocean, live air, live truck, and so on - all this functionality, which integrates more data than standard.

So far, the predictive pilot is going well:

Predictive ETA is: when will my shipment be at the final destination? That's really a core differentiator. A lot of companies out there can predict an ETA at the port of discharge - but not a lot of companies can predict it at the final destination.

Supply chains have a way of going digitally dark after a while. That isn't so great for customers:

Exactly. Yes, it's interesting to know when the ship arrives, but the critical thing is when the container is on the warehouse.

It's not like we haven't wanted to predict final destination shipments before. We couldn't crack that nut because it's pretty darn hard to do. I asked Schaut: are we finally getting there?

Absolutely. Because to be part of a commerce network - that's the term for Nexus uses now for this. This is for sure an advantage because you're getting access to all the data, not just the pickup port.

Down the road, wouldn't taking in IoT data, or external data like weather patterns, be part of this mix?

Especially all the technology around IoT, from my point of view, has the potential to be a game changer there. If we take different, let's say nontraditional logistics data points, and integrate this via IoT, then this is something which can bring the whole industry to not a completely new level, but at least a step forward.

Ahh, but there's a caveat. Your algorithm is only as good as your data quality:

Today, in all the global supply chains, data quality is one of the core issues. If you can fix that, this will give you another level. Because if you have poor data, then the best algorithm does not help you.

Regardless, Schaut sees an important role for machine learning here. Classic supply chain management is done with business rules. That's not going to cut it here:

There's this big vision from an automated supply chain management view, so to say. I think it's still a vision because, in general, it's not so static. So you cannot do it with simple business rules. It's far too dynamic, so you need to apply machine learning and so on.

That's a major reason why Schaut came to Inforum 2019 in the first place:

At this conference, I heard a lot about this, which is very encouraging. [We looked at] all the roadmaps. But it's early days for this technology.

Modern supply chains need a modern UX

Supply chains are changing, but what about the software user experience? It's hard to imagine a new generation of supply chain pros using an early GT Nexus interface. How is Infor doing on modernizing the interface? Schaut says that Mike Riegler  VP Sales, Global LSP and Ocean Services for Infor Nexus, is on the case, coordinating feedback sessions.

This is where we actively talk with Inforum though the global sessions with Infor Nexus. Mike really engages us a lot. It is clear that they need to improve there, and they really get our feedback there, which is encouraging for me.

What kind of improvements does Schaut have in mind? Simplifying screens and clicks, or the general look and feel, or all of it? All of the above, he says.

That sounds like the kind of project Infor's Hook & Loop design agency lives for. Of course, a UI makeover is not a priority for all users. The OCS users who access Infor Nexus via their ERP systems don't have any need - they have no Infor Nexus interface to think about at all. But 70 percent of DB Schenker users access Infor Nexus online. Those are the ones who will gain from UX enhancements.

We joked about Hook and Loop's famous "no more fugly software" line. There's a new generation of enterprise workers to contend with - and they have much higher UX expectations. Then there is the training burden:

The better the user interface is, the less we need to train, and that lowers our cost to deploy it in the end. So we have a mutual interest to get this improved there. But as I mentioned, we've already seen some good early results, and we think the Hook & Loop team will make a difference at least.

The wrap

In theory, DB Schenker and Infor could be competitors, bidding against each other for certain projects. But the partnership trumps that:

If you look at it from a too-narrow IT perspective, then you could even say, "Okay, then normally we should be also competitors." We both have order management solutions, for example. But this is not the case because we want to have this business partnership, where we drive value for our customers. And there we are not competitors, but in a central partnership.

ERP software projects are changing. Today, salespeople are expected to advise on options. Industry expertise matters as much as software. That's why Infor and DB Schenker can put aside transactional software overlap, and serve the heck out of customers together. As Infor's Riegler put it:

People buying our software need value. They're looking at our LSP partners, who know the product better than most anybody. They know they have the infrastructure, people and process to get value out of it. That's what you're going to see over the next years. Our sales teams are embracing with the DB Schenker team, and going after big customers together  - because technology alone don't do it. Services alone doesn't do it either.

Image credit - Photo of Joachim Schaut of DB Schenker at Inforum 2019 by Jon Reed.

Disclosure - Infor paid the bulk of my travel expenses to attend Inforum 2019. Infor is a diginomica premier partner.