Thoughts from the BVL Congress

I had the opportunity to participate in the BVL International Logistics Congress in Berlin Germany this week.  There was a great deal of discussion regarding expectations for the global economy, as well as the outlook for logistics management.  In general, the expectation is above average with an upward trend and an expansive sector predicting more demand for logistics services. Experts agreed that  2013 will be a stable year relative to 2012, with maybe 1-3% of growth in 2014.  Apart from the economy, logistics innovation has been recognized as critical.   To create wealth in an economy relies on innovation as the playing field is becoming less differentiated between developed and developing countries.   The focus will be more on how innovative logistics systems will be.

A good example of a company driving logistics innovation that presented at the conference was Continental AG.

Elmar Degenhart, Executive Chairman of the Board for Continental, shared his thoughts on this, in a presentation titled “Mastering Challenges Through Transparency and Individual Responsibility.”  He started by noting a few interesting facts:  “Every German spends 50 hours per year in a traffic jam – a waste of time and fuel.  What we should try to achieve is to keep things flowing and not blocked.  The roundabout is a good example of high efficiency, but we also find in our corporations that there are too many bottlenecks in warehousing and workflow, our behavior,how staff and we deal with partners.  We may work against one another and waste time and resources.

Dr. Degenhart then went on to share the vision of the future for driverless vehicles based on technology that is being worked on by Continental.  Their corporate vision emphasizes hree value streams are crucial – innovation, productivity,and profitable growth.   To drive innovation means emphasizing to employees we have to LEARN how to manage businesses.  Creativity must be passable and to look at new concepts.  Hierarchies are toxic to innovation so the company has established more of a  network and connected structure.  Employees should be able to work and connect with themselves across hierarchies without informing their superiors.  If they want to move fast to drive innovation and industrialize new concepts – speed is critical.

Continental is working to emphasize networking and connectedness of vehicles with the backend road network and the internet.  Vehicles will be connected through the internet to cameras established in major cities that will enable them to effectively “look around the corner” as they approach an intersection, and determine if there are other vehicles coming down the next street.   Their systems will increase visibility beyond what is immediately in front of the vehicle, to seek and capture any possible risks that might be in the intended path of travel.   Technologies will be able to change the different functions of the car, control its speed, trajectory, and route.  Continental envisages a three stage model for automation of vehicles:   semi-automated, partly automated, and fully automated, which are forecast to occur in 2016, 2020, and 2025, respectively.  Running alone at a speed of 30 km/hour will be the first stage of automation.  In this scenario, passengers will not have to steer, and the vehicle will have  automated start and stop sequences.  And the driver will be able to use their time in the vehicle in a more productive manner, to read, work on the internet, or be on their smart phone.  This vision is not just a fantasy – the technology is already available.  The innovation in this case is already in the industrialization process at Continental, and  industrialization will begin in 2-3 years.

What does that mean in terms of logistics processes?  Intelligent Transportation Services ITS will become a multi=billion dollar market, focused on mobile goods, and interconnected logistics through communication technology.  A highly complex structure will emerge that will enable companies to save costs and time, and will also promote a more sustainable logistics value chain that also saves lives.    Safety and security is critical to this innovation that will be derived for the supply chain of the future.