The supply chain sector as a market for IoT data at the edge – on the road, on the ocean, in the air – is not getting simpler, anytime soon. Post-pandemic, it has changed forever, reasons Bart de Muynck, chief information officer at US supply-chain software outfit Project44. “People think these issues will be resolved, and there will be sunshine beyond the rainbow. Nope, not true. We are only going to see more complexity,” he says.
De Muynck quotes a phrase from Peter Hinssen, a prominent entrepreneur and author on the innovation circuit, that the notion of ‘normality’ is obsolete; that even a ‘new normal’ is impossible, except as a mutation, as the political and socio-economic climate and the climate-climate put strain on global trade. “Everyone asks when we are going back to ‘normal’, and we never will – it will be a ‘never-normal’, continuously in a state of flux,” he says.
His firm, Chicago-based project44, has just (late 2022) raised $80 million in a venture round led by UK-based Generation Investment Management and Denmark-based A.P. Moller Holding, the investment arm of A.P. Moller Maersk, and parent of container shipping company Maersk Line. The round values project44 at $2.7 billion – 12 percent higher than its value after a Series F round in January, which raised $420 million.
The company is at the top of the supply-chain food-chain – at least insofar as its proposition, consolidated in a new master platform called Movement, takes a top-view of data in every corner of the supply chain, going beyond just novel IoT systems to include warehouse and transport systems (WMS and TMS), plus sundry enterprise planning (ERP) engines – in order to chuck-out insights to make the whole agglomeration move faster, easier, smarter.
But project44 is notable, as well, on the grounds it achieved unicorn status, with a value of $1.2 billion, at the start of 2021, on an accelerating trajectory of 100-plus percent growth the previous year, and a hat-trick of acquisitions in the 12 months following – of Austin-based last-mile delivery-tech provider Convey for $255 million, plus Germany-based sea freight specialist Ocean Insights and compatriot US ocean analytics firm ClearMetal.
In April, it also acquired Germany-based barge and rail logistics data provider Synfioo. “We’re not doing any more,” responds de Muynck. “But yes, we’ve acquired these companies – because we wanted to be more global, and to cover all modes of transportation.” Indeed, the logic looks plain; project44 started with less-than truckload (LTL; between parcel- and truck-sized loads) logistics in the US, before moving to full-truckload (FTL) domestic shipments.
He says: “There were already global leaders for ocean [freight] and last-mile [deliveries] – which is why we acquired Ocean Insights and Clear Metal on the ocean side, and Convey for last-mile. Synfioo is focused on specific modes of transportation for Europe like intermodal rail and barge – which is quite different. And all of those acquisitions, all of those different data sets, come together in Movement – so you don’t have a different experience for each transport.”
The importance of simplified single-access to logistics data is intensified in these constant ‘never-normal’ disruptions. De Muynck lists them again: rising inflation, tighter regulation, falling demand; energy crisis, labour crisis, climate disaster; industrial sovereignty, industrial automation, digital infrastructure. And these disruptions are intensified in siloed data functions in supply-chains, he suggests. “Logistics is the worst for data silos,” he says.
“Companies have never had enough visibility – not into their own operations, and not across their supply chains. We still see way too many manual or inefficient processes. And the supply chain, by definition, is collaborative – because it is a chain. But it has lost track of that. If companies want to change, to be more efficient and productive, and have new digital business models, then they have to collaborate – and visibility data is the best way to do that.”
As an aside, in view of some anecdotal corporate mythologising, it is notable perhaps that de Muynck picked project44 as the company to “bet [his] career on”. He had been 22 years in third-party logistics (3PL), he explains, and eight years with tech research firm Gartner, including as original author of its ‘magic quadrant’ analysis of 1,500 vendors in the visibility market; he had placed project44 at the top of the pile, and, in April, the position came up.
He says: “For 30 years I’d said transportation is the key part of the supply chain, and people said, ‘Nah, not true, it’s manufacturing – transportation just gets the stuff there’. And I’d said transportation needs technology, and they’d said, ‘We’ve been doing it this way for 30 years’. But there has been a huge change in logistics over the last two years, and I wanted to get back into the industry; I am too young to retire, and too old to wait to look for another job.
“And visibility is the number-one area companies are investing in. Because it relates directly to risk management, and we’ve never seen risk like this in the last five years. And for visibility, this is the company to bet on – the company for me to bet my career on. Because it is going where the market is going, and going there faster than anyone else… If this was a mine, we’ve just struck gold – and we are only going deeper, to get more data to serve more use cases.”
This combination of ‘never-normal’ industrial-stakes and ever-simpler tech-plays is starting to pay off for enterprises in new business insights in the top-level software layer, the argument goes. But this is only because the crucial edge-IoT layer underneath has been solved, and because vendors in every function of the logistics tech stack have started to collaborate – so the data inputs and data outputs are consolidated, sanitised, ordered, and aligned.
And IoT is the spark for this bonfire of data, which is trailing digital smoke-signals across the supply-chain landscape. “I was doing telematics in the late 1990s, when everything was satellite-networked,” says de Muynck. “You’d pull these black boxes off the trucks to [manually] retrieve the data. I was 10 years at PepsiCo, and they used telematics for compliance and payroll calculation; not to track trucks – because it was too expensive to ping the satellite.”
He goes on: “But the price of hardware and connectivity has come down with availability of terrestrial networks. IoT could be anything, now – a sensor on the truck, the door, the tyre, the brakes, a camera in the cab; you name it, we have it. In 2010, the world created two zettabytes of data – that is two billion terabytes, right? At the end of 2022, we will be at almost 100 zettabytes. We’ve gone 50-times in 12 years – from too-little data to too-much data.”
Of course, de Muynck’s firm is not directly involved in data capture, even if it claims partnerships with 950-odd hardware providers in the IoT space, crossing from telematics into every supplier industry; it exists at this higher-up platform level, and the narrative promptly switches to how to solve the problems that IoT solutions have helped to create. “People used to talk about data stores and data lakes; now they’re talking about data oceans,” he says.
“All we see is people drowning in data. And data on its own has no value. The challenge is to sort it – for quantity and quality. And to sort it fast. It is no use having data if it is a day old. It has to go from all-different sources into a single place, and the process has to discern what is good and bad data. But even that is not enough; you have to get these insights to enterprises in a way they can use – to know what to change for their business to be more efficient.”
But it is all IoT in the end, arguably – if ‘the internet’ describes the whole concept of a digital information library, as it tends to in common usage, more than just the inter-networking of devices. Whatever; de Muynck makes clear IoT is vital to the cause. “It used to just be telematics… but we can do a lot more with telematics data today – tracking, yes, but sustainability reporting, too,” he says, citing work with Amazon to optimise fuel costs and emissions.
“As these devices become more numerous, more capable, and more real-time, the opportunities get bigger,” he goes on, expanding the fleet tracking solution into something more profound. “There are cameras on the yard gates, which don’t just see a vehicle, but a brand, a model, a colour, a reg plate, a direction of travel; and a sensor on the dock, which says the door is open and the truck is being loaded – with this product, in this condition, in this volume.”
The point is, he says, that IoT – available more globally, priced more appropriately, rendered more easily – is now enabling enterprises to double-up, and even triple-up, on their connected telematics data sources, so they are not just connecting for the first time, but connecting for the second and third time in overlapping realms to achieve greater context, to prove and improve their data insights. “It means the quality of the data just gets better,” he says.
Which sounds like any Industry 4.0 domain, where the talk is about mind-bending transformation and the work is about mind-numbing preparation – often to translate manual processes into digital workflows just so there is a business to plug-in/into in the first place. Is this a two-speed discipline in logistics, – to make the most of existing data, in connected telematics and siloed systems, and then to multiply use cases with new sensors and new data?
Yes and no, and sort-of, says de Muynck; for project 44, there are three simultaneous workstreams: to connect more devices and integrate more device vendors; to improve data exchanges (typically from legacy EDI interchanges, invariably to software API interfaces) and data flows (“less failover, more real-time”); and to drive customer understanding and customer value. “Our product isn’t static; it evolves and gets smarter with more data,” he explains.
“All these streams are really important. They have to be; otherwise the end result, the insight, is not correct. Because even three years ago analytics was mostly for historical reporting, for looking backwards. If you got it wrong, you got it wrong. But these are now forward-looking predictive and prescriptive analytics. Which means if you get your sums wrong, or the data quality isn’t right, you are going to prescribe things that are completely off.
“Supply-chain planning is all about the quality of the original data. Low-quality forecast data will give you 40 percent accuracy, at best; best-in-class quality might get you to 70 or 80 percent. So there is lots of work to do. Visibility is not a fully matured function, right? It has only been around five years. Are we ever going to get to 100 percent accuracy? It is a goal but it will take collaboration – for everyone to work together.”
But what of this idea, from 5G workshops in manufacturing, about day-zero digitalisation, where a vendor walks into a factory to find the industrial process it wants to automate with IoT and AI only actually exists on a piece of card on a wall, or in a technician’s head? Are logistics enterprises any good at this? Or is it like manufacturing, where the big beasts of industry are weaponised with new digital toys while mass-market SMEs soldier on like 20th century boys?
“That is one big difference from any other industry. TMS software took 30 years to be affordable and usable. Visibility was democratised from day one. Because everyone needs it. And because it does not require the same effort and cost. Which is why some customers are doing only a few thousand transactions per year, and some are doing millions. In that sense, it is different from what you see in manufacturing, where it is mainly led by big organisations.”
So just to replay something that somebody said (see: Don’t talk tech just because you don’t understand the vertical’); that the logistics industry is the “most entrenched in the world”, and that change will come slowly – that there will not be a digital revolution in the supply chain, actually, because of vested interests, deep pockets, and a certain anti-visibility (invisibility?) agenda about what is happening inside a container. How true does that ring for project44?
Without skipping a beat, de Muynck responds: “Yes, transportation is way-behind any other function of the supply chain in terms of the adoption of technology. It is still in the Middle Ages, compared to other sectors. You go into a factory or a warehouse, and there are AGVs and robots. You get to the dock door, and it all goes to paper; everything goes to manual. We are way behind. But there is also the biggest need, and therefore the biggest opportunity.
“Because we are starting from the lowest point, and the sky’s the limit. People ask about our biggest competitor. ‘Is it FourKites?’ And the answer is, ‘No’. Our biggest competitor is a company that doesn’t want to do anything – which wants to keep going the same way it always has’. It is like when Amazon came into retail, and all these other companies said, ‘We don’t need real-time e-commerce and visibility’. But where are they now? Where is ToysRUS?
“The point is you can’t manage what you can’t see. So there is change, but it won’t happen overnight. It is a journey, in five stages: connect the network; get the data; qualify the data; develop the analytics; and then expand. You can do some things from day one, but you can’t go too far. And you need someone to walk-it with you. We are not a solution vendor, or a tech vendor. We are a value-creation partner. Everything else is a means to that.
“We go on-site once a quarter with customers to talk the whole day about where to get more value from the platform. Because the industry is immature; it takes a lot to go from all-manual to data-driven, to eventually automate big processes. Which, by the way, you will have to do. Because if you don’t have visibility, you will be left behind – by your competitors, your customers, and your own staff. Because in five years, you won’t attract the digital talent.”
