HCB: Clean and Clear
By Peter Mackay | April 7, 2020
Chemical suppliers are boosting customer service levels by making data available in real-time. ClearMetal is doing its bit to help them fill in the gaps
SHIPPERS EXPECT 24/7 visibility on the whereabouts of their goods in transit. Track-and-trace systems are nothing new and recent advances in digital technologies have made them even more effective and widespread.
But one part of the supply chain has always been ‘dark’ as far as real-time visibility is concerned: the maritime leg. Packaged goods are sent from the consignor to the port and loaded onto a vessel; once that vessel has left the port, it has been impossible to use traditional tracking methods to gain accurate and dynamic visibility. That uncertainty about delivery times leads to inefficiencies in planning and scheduling and creates unnecessary work to keep customers happy.
Recent developments in IT have addressed this ‘bad data’ problem in the logistics industry – and particularly in the shipping industry. This issue was identified by three data scientists at Stanford University, who felt that the application of artificial intelligence (AI), machine learning (ML), and algorithms might be able to solve it.
In 2014 they established ClearMetal as an IT start-up in San Francisco and spent three years developing a solution to turn bad data into good data.
Their goal was to create high-quality data from the masses of information available so that shippers could use it to make accurate decisions about planning and forecasting. That meant having accurate access to the estimated time of arrival (ETA), estimated time of delivery (ETD), and sailing schedules.
The algorithms that ClearMetal has developed use data provided by the shipping lines, combined with other data sources, including AIS and GPS information on vessel locations, data provided by ports and terminals, sailing schedules, and other data, to create a big data ecosystem. All this data is digested and triangulated, using historical data, and passes through a cleaning process, to deliver good data to ClearMetal’s clients.
That operation is contained in ClearMetal’s CDX (for Continuous Delivery Experience) platform, which is now in its second major release. CDX uses a continuous methodology that learns, adjusts, and drives constant improvement in delivery and experience for customers by using proprietary machine learning to cross-reference inputs and canonicalize supply chain data. This differentiated technology enables businesses to make highly intelligent inventory and customer decisions based on continuously live, trustworthy data, versus static approaches that focus on point-in-time views of assets in transport.
TAKE IT TO THE MARKET
“Accuracy of data is paramount,” says Thomas Kofler, recently appointed as vice-president, sales, EMEA at ClearMetal to grow the company’s business outside its North American base. The system’s predictions are now “far better than what the carrier provides,” he says, adding: “We can prove that!” And, having established a proven system in ocean freight, ClearMetal is moving forward. It can already provide door-to-door visibility when carriers are responsible for pre- and on-carriage of goods and it is now looking to cover intermodal services, starting with the US rail sector. Kofler says ClearMetal is going to be offering full, dynamic visibility across the US network as from the second quarter this year.
ClearMetal is also already in discussion with data owners to provide road transport coverage in Europe, as part of its ambition to provide complete end-to-end visibility for all freight transport operations.
One area where ClearMetal believes this service will be particularly valuable is in the chemicals sector, especially for polymers. Volumes are large and margins are tight, so continuous visibility along the chain will be able to deliver better asset utilization and, importantly, better safety. “The chemical industry fits ideally into our customer profile,” Kofler says.
Not only can total visibility help reduce costs through better utilization and lower demurrage charges, as receivers can pick up goods promptly once they are discharged from the vessel, but knowing about disruption in the supply chain in real-time can improve the speed of response. That boosts customer satisfaction and also means that buffer stocks along the chain can be reduced, again reducing costs. Those benefits are driving demand for ClearMetal’s services from all sectors of industry, Kofler says.
PART OF THE PROCESS
These are not idle claims. One company that is already benefiting from ClearMetal’s services is Lenzing, a major producer and supplier of cellulose fibers for the textile industry. Since 2016, Lenzing has been working towards a goal of what it calls “customer intimacy”. And to achieve that, it identified a need to build trust in the brand by making its products available and aligned with its customers’ expectations.
Prior to implementing the ClearMetal CDX platform, Lenzing was, like many other companies, operating reactively to customer complaints. It had no formal process for exception management and was providing its customers with often conflicting shipment status updates. Its operations relied on manual inputs and were inefficient, involving manually checking carrier or partner websites to track down shipments and physically calling docks or other partners to find out where goods were. The result was long lead times, with frequent customer stock-outs, despite high inventory along the chain, leading to high
ClearMetal’s CDX solution now allows Lenzing to benefit from dynamic lead-time planning with live transit tables and insights into carrier reliability. Predictive transport visibility delivers exception alerts, allowing Lenzing to proactively share information with its customers and collaborate in dealing with exceptions and delays, even before they happen. Indeed, these alerts can help Lenzing work with its carriers so as to honor its original ETAs, without the end customer even knowing there are delays in the supply chain.
Automating Lenzing’s supply chain operations has reduced its demurrage costs by 15 percent, and reduced manual “detective work” by 70 percent. Order and booking information is now meshed with shipment/container data to give all departments access to shipment data in one platform, allowing all parties to dynamically view carrier performance in near real-time alongside live transit times. Lenzing has also enjoyed a 20 percent reduction in expedited transport costs and can use the data to undertake strategic analyses of performance on individual lanes.
As a result, the company is also reporting increased revenues as customers are placing more orders. Not only has its customer service levels improved, but it is able to respond immediately to their inquiries and can communicate efficiently in the event of delays or disruptions. It can focus on exception management and be proactive, which for Lenzing is one way of achieving the “customer intimacy” it was seeking.
For Kofler, this is exactly what ClearMetal was set up to do. Traditional supply chain management is bounded by static information and static silos, preventing the agility that is needed in today’s world and encouraging high levels of bugger stock. Being able to calculate lead times in a dynamic fashion allows better estimates of delivery times – but it also raises awareness that there is a need for more data points.
Ultimately, it frees up a lot of time for logistics personnel to concentrate on the continuous delivery experience – in the end, it’s all about customer service.