The Future (or End) of Supply Chain Visibility

Is supply chain visibility a product or feature?

To derive business value from visibility, you have to do something with the data and insights collected. It’s the doing, the actions taken to improve your transportation and logistics operations, for example, that ultimately delivers value. This is where enterprise software applications like transportation management (TMS), warehouse management (WMS), and yard management (YMS) come in.

In short, even for this new generation of supply chain visibility providers, visibility is becoming a feature of a broader supply chain software platform. The end game, if there is one, is to create the largest network of connected trading partners with the broadest set of software applications on top. As I’ve said before, in the world of supply chain and logistics, it will no longer be just software that will be eating the world (to use Marc Andreessen’s famous quote from 2011), but software and networks.

I am revisiting this topic because of an announcement made by FourKites last week. The company announced that “it is withdrawing from the Gartner Real-time Transportation Visibility Platform (RTTVP) Magic Quadrant evaluation process, citing the need to prioritize breakthrough AI innovations using RTTVP that are fundamentally reshaping supply chain operations.” As Mathew Elenjickal, founder and CEO of FourKites, explains in the press release:

“The supply chain industry stands at the crossroads of transformation with AI poised to deliver unprecedented efficiencies and automation capabilities. While traditional RTTVP solutions provide a foundation for supply chain operations, our revolutionary AI capabilities are elevating RTTVP to new heights of efficiency and effectiveness. Our breakthroughs in AI-powered automation using Digital Workforce and Intelligent Control Tower solutions are already delivering extraordinary results for our customers, and we believe focusing on these innovations will better serve the industry than participating in RTTVP evaluation models that don’t yet account for our innovation and roadmap.”

“Our journey with the world’s leading shippers has shown us that true transformation happens when visibility becomes the foundation for intelligent automation, not the end goal.”

In other words, real-time visibility alone is not enough to deliver sustained value for clients.

In a Talking Logistics episode last November, Brad Forester, CEO and Founder of JBF Consulting, discussed how real-time visibility solutions are an area where hype overstated the value that could be achieved, causing some disillusionment among users. Here’s a clip of what he said:

https://www.youtube.com/watch?v=QXMliKTwlt8

In this article, I’m explaining my contrarian perspective that supply chain visibility is going to have a chaotic reset as two realities come together: most software vendors are VC-backed companies that thought they’d build unicorns and give huge payouts to their investors, while supply chain managers are realising visibility is a commoditized feature rather than a category to be bought for a premium. My concrete prediction is that at least the three largest VC backed vendors will have to settle with this reality by being acquired and dismantled by another category leader (for example, by a major TMS vendor) or by cutting valuation and pivoting their product scope towards a category that will survive.

Source: Talking Logistics

Image Source: Freepik