Q&A: FedEx on how Technology is Transforming the Supply Chain

- Technology - Nov 19, 2014

Keeping pace with technological change could be the difference between success and failure in an age of rapid advancement with continual advents of new innovations.

The rise of wearable technology appears almost seamless when not too long ago the idea was far from mainstream or consider to be on its way towards it.

The supply chain operations of businesses big and small are transforming as technology matures, and FedEx lies at the heart of many companies’ logistical and transportation needs.

Raj Subramaniam (RS), Executive Vice President, Marketing and Communications, FedEx Services, and Michael Foster (MF), Vice President, Information Technology, Europe, Middle East & Africa, FedEx Express, answered our questions on technology in their industry.

BRE: What is the state of IT and technology in the transportation/logistics today? Is the sector behind?

RS: Businesses are benefiting through transportation IT investments that drive greater operational efficiencies and access to new markets. Companies can sell, source and connect with suppliers around the world. At the same time we can move physical goods from one corner of the globe to another seamlessly.

MF: The merging of the physical and virtual worlds has helped a lot of smaller businesses leverage their reach and economic opportunities. Connectivity over the past ten to fifteen years has leapfrogged. But one of the challenges is that traditional IT is tasked with maintaining security, scalability and compliance with regulations.

Are companies missing out on innovations? What potential is there for IT?

RS: We've seen clear evidence that the countries and economies that invest in connectivity infrastructure have achieved significant improvements in GDP and productivity. There are 2.4 billion internet users in the world today, and more wireless devices than there are human beings.

Between companies, supply chains are being radically transformed because of the transparency of information and the ability to predict the flows of their supply chains better. We're in the age of the customer. Internet connectivity has become a great equaliser – customer expectations are very high. Companies that win on customer experience ultimately win the game.

MF:  Technology has played a big role in levelling the playing field. Ten years ago you needed capital investments – for servers, operating systems and licenses – it was a big business case to get that off the ground. Now, with low cost networking and computing through cloud providers, entrepreneurs and small businesses don't need to figure everything out at the beginning.

Is smart technology something which could benefit your industry?

MF: With smart technology and the internet of things, there's a great opportunity for businesses to use new low-cost communication devices and machine-to-machine technology, to keep active track of their supply chains. The more data points you have, the more you can understand if you are entering into a risk period or not.

RS:  It's the evolution of technology in a completely different way for the transportation industry. As an example, FedEx recently launched SenseAware, which is able to monitor the environment of a package – the temperature, humidity, barometric pressure, geometric fencing - all kinds of information which were previously unknown. This helps especially for high-value goods and the healthcare sector. One piece of customer feedback from using SenseAware simply read "saved another life".

Is there scope for the adoption of wearable technology?

MF: We have quite a lot of handheld technology, but we also have 'ring scanners' - wearable devices that you can scan packages with so can keep your hands free. We're constantly evaluating those types of technologies – augmented reality etc. – [wearable technology] very much has a place in the transportation industry.

What is FedEx doing to show that IT and tech can boost performance? 

RS:  On a broad basis, IT helps us provide our large customers with visibility into their supply chains, to be able to manage their inventory. Commodities don't need to be stored on the ground - think of a FedEx airplane as a warehouse in the sky.

On an individual basis, we are having much more contact with our customers' customer – we are providing technology to our ultimate customer – to guide the destiny of a package. As an example, in the UK on our website we have 'Anna' – our virtual customer service agent who handles 35,000 calls per month.

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