A new visitor to my new site kindly dropped a comment and asked this question. Thank you Pedro!
First, make lists
Let us start with a list of concerns in logistics and supply chain management. Logistics and supply chain management cover a very large number of functions such as product life-cycle management, demand forecasting, inventory and supply planning, procurement, manufacturing/ assembly, warehousing, demand fulfillment, transportation including global trade, returns management, repairs, and recycling
Now, let us make a similar list of developments in the technology domain. A similarly large number of technologies contribute to the digital disruption – Technologies like Internet of things + Big data + Artificial intelligence and by extension digital twins etc., Automation in manufacturing, material handling (think drones, self-driving trucks too) and business process automation (so called Robotic Process Automation or RPA), 3D printing, Augmented reality, and virtual reality. There is also (at least in my opinion) the one truly innovative technology of this century: Blockchains. Also consider the nuts and bolts of development such as cloud native movement, service-based architecture etc.
Third, make a list of digital business models. A very clear trend is the move from ownership to sharing. This is evident from business models of companies like Uber, AirBnB etc. Another huge development is the raise of ‘platforms’ or online marketplaces. Companies like Amazon and Alibaba are obvious answers, but even Google PlayStore and Apple iTunes are captive platform businesses. A third important model is collaboration. It is the understanding that when traditional business processes are moved to a cloud, the capability to collaborate transforms these processes into something much better. There are also point solutions, but they tend to be tough and be in a niche and therefore not that popular.
Next, mix them up
Innovation is not invention. Innovation is mixing up of existing ideas to deliver better or newer results. So mixing up the three lists in any way can give you new ideas for startups in logistics.
But please also remember that everyone is searching for the Eldorado or Shangri-La of a technology or business model that are not in the list above, or any other list for that matter. I am one of those prospectors in this gold rush.
Therefore, while we search for that elusive nugget, there is a lot that can be done by combining the three lists above in innovative ways. If a start-up is defined as Y = F(A, B, C….) where Y is the startup, A, B, C etc. are items on the list. Here are some interesting startups and their equations
| Logistics concern (A) | Technology (B) | Business model (C) | Startup (Y) |
|---|---|---|---|
| Load planning | Sensors/ Analytics | Point solution | Cargometer |
| Transport management | Sensors/ Analytics | Point solution | Peloton |
| Delivery planning | SaaS/ Predictive | Platform | FarEye |
Some closing notes
The lists are hierarchical. You can breakup any one topic into numerous sub-topics
Integration of innovations is also an innovation
Ideas are easy. Execution is tough.
Remember Ron Swanson: Never Half-”do” Two Things, Whole-”do” One Thing
While there is a lot of action in logistics start-ups, I believe it is only the tip of the iceberg and a very skewed tip at that (too many transport intermediary platforms). I believe there is a universe of innovation waiting for fertile minds and capable hands.
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