I interviewed Stefan Reidy who discussed Supply Chain Risk, Visibility, Integration.
Can you provide a brief background of yourself?
I was a consultant at IBM. At that time, we had an internal organization called ODIS, which stands for On Demand Innovation Services. The idea was to bring innovation faster to the market by working closely together with research. It was consultants and IBM research working together. After 9/11 there were new regulations coming from the US government about cargo monitoring. We started to look into how we could address these regulations, and new challenges, to make the supply chain more visible, more secure, more efficient.
We started with three researchers, and then we added people — consultants, software developers, etc. For various reasons, IBM stopped the journey in 2007. I left IBM and founded the company Arviem together with two other partners. Since then, we have been offering real-time cargo monitoring services in the market.
Could you define what is supply chain risk visibility and integration?
It's a broad topic. Currently, if you look at the global supply chain, and focus, for example, on container shipments; there are over one hundred million shipments worldwide taking place every year. There are many incidents happening and it is obvious that, for shippers who actually carry all the risk, the visibility is not given.
So the parties suffering most from these risks from “black boxing” in international or global supply chains, are the shippers. This is where we wanted to bring in some benefits, a solution, by using new kinds of IoT technologies. The technology brings in visibility by detecting or revealing data at the edge of the networks.
We detect where the cargo is and what's going on. We find out how the is cargo doing and whether there are any shocks. We can find out if there are any kind of temperature, humidity, or other factors out of the ordinary. We analyze the data in combination with some other data streams. You could also call this integration. We combine it with other available data but also in direct connection with the cargo that is out there in the network.
We think this combination can bring in the additional required visibility.
How is this visibility into the supply chain done in practice?
We have three components at Arviem. One is what I call the sensing component. It is a piece of hardware, an IoT device that collects the data and transmits the data in real time to what I call the analytics component. This second piece of software is what collects the data from the devices out there, combines it, as I said before, with other data streams; for example, weather data, risk parameters from all the companies, etc. Based on business rules, it then defines actionable information out of it, which could be a report, or a notification. Then, based on the collected data, the “big data”, we then create historical and dynamic risk profiles.
The third component is a service. We have an operations department, which makes sure that the devices are always operational, that they arrive on time, at our client's site. When the shipment is over, we pick them up again. We ensure all the system are working properly, so our clients basically have nothing to do. They pay per use, but they don't have to do any investments. They don't have to do any admin work. It's a full, end-to-end service operated by us.
What challenges do you have to face when doing this?
Let's say we are doing international shipments. Because ours is a new business, it's a kind of disruptive business model. For example, these devices are not known by several Customs offices worldwide. We don't have regulations or approvals which are globally accepted. So if you come in to one Customs office, it might be accepted. Not a problem at all. If you go to the next Customs organization, then suddenly they say, "We don't like these devices," or, "What is it exactly? Give us all the details." So you first have to go through an approval process. This can slow down the ramp up of our service in some countries.
The other aspect is, again, because it's kind of a disruptive service, clients will have to change the way they do business. That is sometimes a time-consuming process because the clients themselves have to definite their business model differently. They have to change their processes. They have to have new KPIs, and that's sometimes something that you cannot do overnight.
However, from a service perspective, it's basically our intention to make the service easy to use, simple set up, and easy going.
Can you share any success stories or some examples of success?
A lot of companies are not yet there where they say, we are not allowed to use them as a reference. But one of the companies, it's one of our very first and biggest clients is Nestle. Yes, we achieved improvements which are quite significant. I'm obviously not allowed to mention any data, etc., but they achieved major benefits.
Do you have any final recommendations?
I think if you look into supply chain and logistics — I feel this is going to be one of the next major industries that is going through major changes. Logistics has not changed over the last 100, 200 years. Now with the new technical possibilities, with IoT, Big Data, and Blockchain, this industry will go through major changes over the next few years.
The changes are not only for us as solution providers in this game, but also the clients, meaning the shippers and logistics companies. They should be prepared to be open enough to start pilots and to execute new kinds of business models.
Thanks for sharing today, Stefan.
You're more than welcome, Dustin. I hope we will talk soon again about another topic.
About Stefan Reidy
CEO Arviem AG | Smart insights for supply chains | The leading Swiss real-time cargo monitoring service provider