Jun 14 2022

Be bold in your digital transformation - Conference report
Divers

The conference “Digitalising logistics and supply chains to reinforce resilience” of the Cluster for Logistics in cooperation with the LCL took a good look at innovation and what to take into consideration when planning new projects. The Masters of ceremony, Malik Zeniti, C4L Director, and Joachim Arts, Associate professor of the LCL welcomed over 50 guests on June 13th 2022 at the Chamber of Commerce Luxembourg. One major takeaway was that Luxembourg actors need to be bold in their vision but flexible in their implementation. Getting ready for the future is not just about digitisation or digitalisation but having a plan to tackle the digital transformation. In addition to the high-level speakers, the physical event at the Chamber of Commerce Luxembourg was a good opportunity to network with Cluster members, Alumni and current students of the LCL LSCM Master program.

Digitalisation and the use of data is a hot topic in every industry and supply chain is no exception. But implementing a real digital transformation program requires a sound strategy and a bold plan. Next to digital procurement and tendering (and possible automation), sustainable processes and cybersecurity were on the menu of the conference. (Download all presentations below)

Check out and download the photos of the event here

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In February, the Cluster for Logistics held a survey on Digital Transformation to assess the needs of the logistics industry, noted Mr Malik Zeniti, Director of the Cluster for Logistics. The survey, filled out by 39 companies, showed a heightened interest in Track and Trace technologies, Transport planning and digital Freight Papers. Half of the respondents have already invested specific projects, while one quarter is already in the planning stage. While the need for digital processes is acknowledged by the majority of companies, one third notes that it lacks internal expertise to tackle projects, while two thirds suffer from lack of time or conflicting priorities to drive this transformation.

To tackle the digital transformation, more expertise and talents are needed. The conference in cooperation with LCL was a good opportunity for Prof. Benny Mantin, Director of the LCL to highlight the celebration of the Fifth Anniversary in 2022 of the Luxembourg Centre for Logistics & Supply Chain Management (LCL), Faculty of Law, Economics & Finance, University of Luxembourg. The LCL was Launched in 2017 thanks to funding by the Luxembourg Ministry of Higher Education and the Ministry of the Economy, to attract qualified talent to the one-year Master in Logistics & Supply Chain Management (LSCM) programme, with a first PhD graduate from 2021. The Master programme is part of the Massachusetts Institute of Technology (MIT) SCALE (Supply Chain and Logistics Excellence) network of five centers worldwide, consistently rated #1 in its field by EdUniversal and Quacquarelli Symonds (QS).

"Defining Luxembourg as a logistical hub playing a crucial and attractive role in the supply chain was one of the mainstream thinking of that moment, which is now in the process of becoming a reality.” Three fifths of the students actually remain to work in Luxembourg, noted Prof. Mantin. This year’s students’ projects, in cooperation with those industry partners, were shown via posters at the event. Close to 100 alumni with significant representation in Luxembourg work in leading companies such as Amazon, ArcelorMittal, Cargolux, Ferrero, but also in executive positions in western Europe in major corporations such as ASML, ExxonMobil, Johnson & Johnson.

LCL Posters

Use your data to your advantage

Academic research in the field can lead to interesting results, like the optimisation of routes by using topographical data. “Leveraging topographical data in routing decisions can reduce fuel consumption and carbon emissions by around 5%”, said Mr Poulad Moradi Shahmansouri (PHD candidate LCL). Rather than using the fastest or shortest route, it is possible to use slopes to your advantage. By using the combined effect of topography and dynamic speed optimization, mean savings can take up to 5.61% for HDD, 4.77% for MDD, and 3.89% for LDD trucks in Luxembourg.

Data can also provide a visual support to enhance your supply chain efficiency. The MIT CAVE Lab (Computational and Visual Education) aims to address complex supply chain and logistics problems. Professor Pascal Wolff, Professor at the MIT Global SCALE Network’s Ningbo China Institute for Supply Chain Innovation (NISCI) gave an overview of the project and presented a specific case regarding Container Loading Optimization. A visualization of the loading setup with the help of specialized programs can be of great help for the ground staff.

In uncertain times, going digital can help navigate the future, especially in procurement. The pandemic has disrupted nearly every aspect of the global Supply Chain, said Mr Marcel Dinu, Vice President, Vendor Management, Procurement and Supply Chain, SES Satellites. Sourcing, manufacturing, logistics, transportation or mining have all been impacted severely, with consequences in shortages, delay and higher prices for components and finished products. Following the Covid-19 disruptions, the current inflation and geopolitical instability creates a volatile environment. This is no longer managing a normal supplier or partner relationship but a global crisis, warns Mr Dinu. To avoid disruptions, companies need to actively manage their relationships with suppliers and partners. Going digital can help but is a complex task that requires the right technology (provided that it exists) paired with an open mindset and good internal policy. “There is no silver bullet”, noted Mr Dinu while giving an overview on how to tackle urgent issues quickly.

Logistics companies collect a lot of data, but it needs to be used in a meaningful way. Mr David Waroquier, CEO of Shipsta, and LCL PhD candidate Ms. You Wu, gave an overview of the digital tendering and procurement platform Shipsta. The supply chain centric platform was created by logistics actors to simplify procurement and tendering. Rather than filling in excel files with dormant data that is not shared, this platform can compile meaningful information for the team and easily highlight the best price or service.

In her interactive presentation, Ms. Maria Jesus Saenz, PhD, Executive Director, MIT SCM Masters Programs Director, MIT Digital Supply Chain Transformation, spoke of the risks and opportunities when tackling Digital Supply Chain Transformation (DCST). Companies expect to reduce costs with DCST, but management needs to understand that it is not possible to predict possible savings with digital transformation projects. DCST projects are complex, and the majority of the companies underestimate the cost and time requirement to implement the new processes - case studies have shown that price and duration were often twice as much as expected.

Take the big steps but the right steps

Mr Arnaud Lambert, Director Digital Innovation Hub of Luxinnovation, insisted to be “bold in your vision but flexible in your implementation”. Getting ready for the future is not just about digitization or digitalization. Instead, companies should aim for the digital transformation, which is the process of devising new business applications that integrate all the digitized data and digitalized applications. It is a very different playing field that requires big steps, added Mr Lambert.

Rather than focus on their internal processes, which are constantly optimized, logistics actors should also spend more resources on their external processes and relations. The relation with external partners is key. Neither customer’s promise, efficiency or sustainability goals can be achieved alone. Luxinnovation can support companies in strategic planning and financial support via various programs.

It is however imperative to identify the right processes that need to be adapted. Mr Francois Dolisy, Managing Director at Quatrei, gave an account of a practical digital implementation case with LuxairCARGO. The logistics arm of Luxair wanted a clear view of all RAMP processes (area for loading, unloading and maintenance) to understand existing costs, create customer satisfaction and generate more revenue. With the help of a dedicated software and rugged mobile devices, LuxairCARGO was able to identify and quantify processes that were known before but did not generate useful data or enable KPIs. The project over 27 months is a success story that brought together 14 departments and helped increase quality and revenue.

Increasing the digitalization of processes creates more vulnerabilities and therefore requires an upgrade in IT security. Be prepared to be attacked, warns Cybersecurity expert Dr Carlo Harpes, Managing Director at itrust. Cyberattacks are increasing and there is a heightened risk of hacking or disruption attempts. These attacks may not just target a company but also its supply chain. The reaction to such an attack is therefore crucial and a checkup of the internal procedures in IT security is important. Listen to your IT department when assessing your security and procedures, said Mr Harpes.

Discussion Panel

The discussion panel: "The Ups and Downs of Digital Transformation of Supply Chains revisited" moderated by Prof. Benny Mantin with Mr Francois Dolisy, Mr David Waroquier, Dr Carlo Harpes and Mr Arnaud Lambert

Humans are particularly change resistant and integrating new processes will be met with resistance when they are unclear, noted the panelists. Preparing the digital transformation is a complex task and must be undertaken with care. A good strategy is necessary and trying to change everything in one go is generally a bad idea that might backfire.

To avoid a “Frankenstein” of a system and achieve a good balance, it is important to listen to the “guys in the field”. There is no need to throw everything out as older legacy systems can still play a role when it makes sense. Assessing what processes need to be upgraded and how to tackle the implementation, is an important part of the process.

Find here the presentations of the day: