Digital transformation of supply chains needs online and offline integration

‘Digital transformation’ is a phrase that has often been used in recent years. Companies and think-bodies often advocate for its importance, but too often refer to online-only technologies such as AI, blockchain, and big data to make their case. Of course, they are not wrong; each of these tools represent powerful potential for any major business wanting to optimise their performance and unlock new, innovative ways of doing business, but for supply chains, successful digital transformation depends on the seamless integration of offline and online capability so that cargo can be moved efficiently, transparently, quickly, and safely.

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This is particularly powerful across emerging markets that are often hampered by outdated and unsophisticated offline processes, where the movement of goods can be at the mercy of exchanging a few bits of paper. These processes risk threatening the economic growth we are seeing in these markets. McKinsey anticipates South-South trade between emerging markets to rise from 25% of global trade to 30% in 2030.

While a total digital rehaul in these markets is not feasible, there are powerful ways of leveraging physical infrastructures with digital capability to unlock new efficiencies and help them continue to strengthen their trade economies post-Covid. In Rwanda, for example, our Kigali Logistics Platform was built to allow for customers’ real-time tracking of cargo through mobile and online portals, encouraging smoother, safer, and more transparent trade flows through Rwanda and its neighbouring markets.

The essential role that online applications play in enhancing the value of physical assets has been reinvigorated on a global scale in the wake of the coronavirus. Retailers, restaurants and others have had to pivot to online platforms to keep their offline services nimble and operational.

At DP World, we are developing and launching a series of new digital technologies designed to advance the resilience of global trade during the virus and beyond. And we have not been able to unlock these new sources of value by treating these digital tools in isolation. Instead, we are thinking about how these tools can be used to leverage our existing physical infrastructure and trade networks for the benefit of how our customers move cargo.

For example, our recent launch of the Digital Freight Alliance brings together offline sea, air, and land logistics networks onto one, online platform that helps join the dots between the three. And looking longer-term, I am excited to continue developing projects such as BoxBay, a highly intelligent High Bay Storage System that will store containers up to eleven stories high, delivering the capacity of a conventional terminal in a third of surface area, all made possible through machine learning and cutting-edge digital mechanics.

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The supply chain sector’s reliance on physical assets is here to stay, from ports to inland storage facilities. Just as the introduction of the shipping container revolutionised global trade, the industry must look at how it can continue innovating with its offline infrastructures so that supply chains can truly benefit from the power of digital transformation.

Without recognising the online and offline potential of digital transformation, companies risk missing an opportunity to unlock genuinely tailored, end-to-end solutions that will enable them to move cargo in smarter, safer ways in a post-Covid trade economy.

Written by Mike Bhaskaran, chief operations officer at DP World

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