At the peak of dot-com optimism in the 1990s, many online marketplaces were set up to cash in on the ubiquity of internet access. The idea was simple: create a centralised online resource for firms, partners and sometimes customers to share plans, bids and other information, in order to expedite the purchase of goods and services.
The vast majority of these projects failed, whether through flaky business plans, the collapse in internet company investment, regulatory fears, or other reasons.
One survivor from the wreckage is GT Nexus, an established leader in the logistics and supply-chain sector. The firm began as an idea between managers with experience in logistics and software, but according to co-founder Greg Johnsen the overall aim is broader. That is, “to create what FedEx did for the parcel” by connecting the many stages of the supply chain from manufacturing to drop-off, and helping to paint a holistic view of the process.
Fortunately or not, with the internet revolutionising the face of communications and globalisation altering the face of business supply chains as offshored manufacturing boomed, GT Nexus found itself at the heart of some fundamental economic changes.
“International supply chains are going offshore in droves, moving from a system where it was five per cent [offshored production] to 70 per cent today,” said Johnsen. “The price of the goods has been slashed but the supply-chain costs spike unless you can control them or opt to over-order.”
GT Nexus’s answer was, and is, a portal that also acts as an integration hub, connecting shipping codes, communications transports and other vagaries to let supply-chain partners know where their goods are at any given time, and to make informed decisions accordingly.
“We’re trying to introduce supply chain visibility,” Johnsen said. “Currently, there are lots of manual interactions for data, with multiple codes for locations, rules and logic. The bits business users see are the tip of the iceberg.”
Despite the advent of RFID for tagging palettes and crates, Johnsen does not expect any panacea to solve the current complexity. “The real Nirvana is not RFID, it’s a system that can put together the range of heterogeneous data feeds,” he said.
Johnsen suggests that the ability to understand, communicate and automate such decisions will distinguish the winners from the losers in 21st century logistics but his company also wants to be at the hub of financial transactions so that banking transactions can be triggered automatically on agreement or completion of a delivery.
Johnsen freely admits that his vision of “a Google for supply chains” is advanced for most companies but plans a role for his organisation in helping firms out of the globalised logistics nightmare.
