The Supply Side: Supply chain giants tout tech for navigating COVID-19
The retail supply chain has seen dramatic shocks amid the COVID-19 outbreak. Two of the largest logistics and transportation companies in Northwest Arkansas said technology innovation investments had helped better navigate the unpredictable waters resulting from the pandemic.
“When COVID-19 hit, our crystal ball was broken, and we knew that we had to focus on centering around the needs of customers while keeping our people safe. And that’s what we did,” said Shelley Simpson, executive vice president and chief commercial officer at J.B. Hunt Transport Services Inc. in Lowell.
Hunt is a preferred carrier of Walmart and a number of its suppliers.
The past three months have been the biggest roller-coaster ride in Simpson’s 26 years, she said during a June 25 webinar hosted by the University of Arkansas Supply Chain Management Research Center and Plug and Play. The Sunnyvale, Calif.-based venture capital firm that launched a supply chain and logistics accelerator in Northwest Arkansas in 2019.
Simpson was interviewed by retired Walmart logistics executive Chris Sultimeier, who asked her to explain how J.B. Hunt approached the COVID-19 crisis at the onset.
“When we looked at who was essential, we had 20,000 drivers and mechanics and safety teams that we knew must be protected as they could not work from home,” Simpson said. “We rolled out an electronic bill of lading that has been well received by our customers. We have found the investments in digitalization have become more important than ever before with contactless deliveries.”
When asked about the company’s J.B. Hunt 360 technology platform and its importance during the ongoing crisis, Simpson said the $500 million investments in technology over five years announced in 2017 were essential to the company’s ability to better serve its customers during unpredictable times.
“[The] pandemic has advanced by three to five years the digital space for pickup and home delivery without almost any marketing investment,” she said.
Simpson said $224 million of that funding was earmarked for creative innovation and disruptive technology, which improved the company’s 360 transport and logistic system launched in 2014.
The improvements to J.B. Hunt 360 included interactive voice-command/response, real-time load recommendations and automation tools for shippers and carriers. This enhanced system also provided for more precise delivery times.
Simpson said during the peak retail demand in some categories brought on by COVID-19, customers appreciated being able to see where their products were in the supply chain.
Tracy Rosser, executive vice president of operations for Transplace, echoed many of the comments by Simpson. He said understanding and meeting the diverse needs of the Transplace customer base has been possible during COVID-19 because of technology investments in control towers and analytics that can predict demand swings to help retail customers stay in stock.
Transplace is a third-party logistics and technology company that works with carriers like J.B. Hunt and retailers like Walmart to oversee the movement of goods.
“We manage about $10 billion of freight for our customers that range from retail, consumer packaged goods as well as automotive, energy, oil and gas and manufacturing which each had very different needs during the height of the COVID-19 outbreak. We manage that freight movement over land, sea and air,” he said.
Given Transplace’s global exposure, Rosser said the company began watching COVID-19 as it unfolded in China and Asia in January. He said by the time health officials in Washington reported the first U.S. case, Transplace had mapped out a testing strategy with three large customers to figure out how to serve them best remotely.
“In three to four days, we deployed the work from home across our entire workforce, and we could not have done it without the technology investments we have made in prior years,” he added.
Rosser said by using the company’s Transportation Management System software, customers’ diverse needs could be met. The system automates functions such as carrier selections, routing and rating, supply chain visibility and freight audit and payment, which became more crucial in the work-from-home world. He said the technology embedded in TMS also supports planning and execution and other business intelligence to allow for more strategic and tactical decision-making.
“We could not have survived without the automation in the retail sector when demand was spiking,” he said.
Transplace also released results of a survey of its customer base about the impacts of COVID-19. The study found 81% experienced impacts on their supply chain, and two-thirds said the implications were minor, while 23.8% said the result was severe.
The majority of the logistics leaders surveyed in February thought it would take up to three months for the supply chain to get back to normal. But nearly half of them said it could take up to one year.
The most difficult challenges the business leaders said they face included keeping up with demand, managing uncertainty, delivery disruptions, inventory constraints and keeping employees safe.
Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.