Ready for the boring technology

Four problems, none of them exotic

The starting list was mundane and expensive. Some terminals are fully automated and some are not, and one named site suffers congestion at certain periods. The group has limited knowledge of when and precisely where a customer truck will collect. Shipping operations generate a large volume of documents that move backwards and forwards inside the organisation, and information about vessel operations has to be retyped by hand from one place to another.

Forecasting had five stated causes of error, including manual adjustment in planning and being too optimistic about raw material availability, which the deck records as having resulted in unfulfilled demand. No forecast accuracy baseline existed, which is itself a finding.

Behind all of it sat two commercial pressures. Broadening renewable feedstock supply to smaller providers, which demands more agility from logistics, and entering a market where the group has no local operating knowledge.

The exciting technology was not ready and the deck said so

Distributed ledger for shipping documentation was the topic with the most momentum. The named initiatives were real: a major carrier and a technology partner building a platform, a startup backed by a bank that had run a successful pilot with an ocean carrier, a brewer, a consultancy, a carrier and a forwarder testing a solution with a European customs body, and an industry alliance of more than sixty companies.

The academic view taken during the work was that nobody can say for certain whether these will be game changers. The conclusion written down was that the technology holds promise, should be tracked, and is not commercially mature. The recommendation attached to it was to build knowledge through university cooperation rather than through procurement, on the model of another energy company running multi year projects to test use cases and teach its own people.

That is a recommendation to spend nothing, which is harder to write in a deck than a recommendation to spend something.

What was actually ready

Cloud based electronic documentation had been in shipping use for years. Three systems approved by the relevant protection and indemnity clubs were named, one refinery in the Netherlands had been running fully automated document handling for barge loadings since 2015 on one of them, one major agricultural trader ran two systems in parallel split by sector, and a large miner had adopted electronic presentation under letters of credit.

The single most useful fact in this section came from the client own earlier research rather than from ours. Some oil majors appear on these platforms customer lists and do not in fact use them, because their own firewalls block it. Knowing that before a procurement cycle starts is worth more than another vendor comparison.

On that evidence the written conclusion was that the group had all the prerequisites for adopting these solutions. It is a judgement, labelled in the deck as based on our research, not a measured readiness score.

The automation arithmetic, both halves of it

Robotic process automation was the one technology already in use inside the group, in two functions, and the effect had never been measured. The external evidence was quoted in both directions on purpose. One research finding put first year return between 30 and 200 per cent. Another put the failure rate of initial automation projects at 30 to 50 per cent.

The single most cited success case was another company entirely, a North American transportation business that cut a manual research task from 40 hours to one hour and found 150 thousand dollars of processable value. It is a good illustration and it is not the client.

Presenting both numbers together is the point. A technology with a 30 to 200 per cent return and a 30 to 50 per cent failure rate is not a bad bet, but it is a bet, and the deck refuses to pretend otherwise.

Partnerships, and choosing on three things

For third party logistics the recommendation reduced to three selection criteria rather than a vendor shortlist: cost saving on logistics operations, digital know how, and local know how. The international providers reviewed carry networks, finance and information technology and lack local market knowledge. In the target Asian market the finding was that local providers had already built logistics innovation and digital maturity, which flips the usual instinct to hire the biggest international name.

The market structure was mapped in four segments, with roughly 30 to 40 major state owned participants at the top, then privately owned domestic firms, international and joint venture firms, and in house logistics subsidiaries of large manufacturers.

What the client was left holding

Eleven profiled solutions with a failure mode attached to each, a readiness ranking that says buy one and wait on the rest, three selection criteria for a logistics partner, and a market structure map for the country the group was entering.

There is no measured client result in this work and none is claimed. Every figure in it belongs to a market study, a vendor case at another company, or third party research. What it produced was a shorter, better argued list of what to do next, and one clear instruction not to spend money on the thing everyone was most excited about.