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How CH Robinson is embracing IoT to transform supply chains in the pandemic
Logistics giant has partnered with Microsoft to sophisticate its approach to digitisation and better serve its clients with more visibility and crucial insights for decision-making
One of the world’s largest logistics companies, CH Robinson, is accelerating the sophistication of its technology stack to respond to the demands around supply chain continuity, visibility and cost efficiency prompted by the Covid-19 crisis.
With nearly $20bn in freight under management and 18 million shipments annually, CH Robinson’s transportation, brokerage and third-party-logistics business is heavily based on technology, and the company is further enhancing its set-up to take advantage of trends such as the internet of things (IoT).
The projects are aimed to cater for the demands of clients, to whom gaining a more granular and thorough understanding of impacts across their supply chains has become critical in recent years, and even more so after the pandemic. According to CH Robinson’s director of software engineering, David Fraas, this translates into knowing where an item is, but also providing customers with other types of insight that are critical for decision-making.
“Getting updates every five minutes that a shipment is going to be late is interesting to know, but if you’re not doing anything with it, then that’s just noise,” Fraas tells Computer Weekly. With that analogy in mind, he notes that the company aims to not only warn customers of logistic delays, but provide clients with a broader picture of how unforeseen events impact their whole ecosystem ahead of time, so they have time to adjust.
“Even in a perfect world where everything is automated, there’s always going to be that factor of something goes wrong, be it a snowstorm or a traffic jam – those things are going to always happen,” says Fraas. “So for us, it’s about how we control that as much as possible and really help clients as fast as possible when those things are going to have a real impact.”
A business that started in the early 1900s with wholesale produce brokerage, Robinson’s U-turn came in the 1980s, when transport deregulation in the US led to the expansion of the truckload side of the business. This would become the largest chunk of the organisation, where most tasks were processed manually.
Digitisation ensued with various acquisitions of tech firms, which then formed the backbone of CH Robinson’s proprietary systems, and in the early 2000s, the operation was completed digitised.
“Even in a perfect world where everything is automated, there’s always going to be that factor of something goes wrong”
David Fraas, CH Robinson
“There were no pieces of paper being handed from one person to another with the details of the shipment any more, there was no paperwork handed over to accounting,” says Fraas. “It’s all done electronically now and for a broker, this was a pretty revolutionary piece.
“The way things used to operate before was truly the antithesis of what digitisation is. The business realised pretty quickly that they were never going to scale and get to what they needed to be if they continued to do things that way.”
That foundation built decades ago allowed the company to enhance its digital approach over the years, which included a move to the cloud, but with all new systems based off-premise. But according to Fraas, the company doesn’t feel it needs to “jam itself into the cloud”.
“Our goal is, of course, to be 100% cloud-based,” he says. “But over the years, given that back in the 1990s there was no cloud, we’ve become very adept at managing our own servers and infrastructure,” he says, adding that this maturity enabled the logistics company to work on new ways to deliver an automated and data-rich experience to its customers.
“Essentially, we are already at a point where a lot of our competitors are going, or are trying to get to,” says Fraas.
Mutually beneficial partnership
A recent development of the ongoing technology evolution at CH Robinson is a partnership with Microsoft, in which it is both a client and a logistics supplier of the tech giant. The business rationale of the collaboration’s focus on the IoT approach is to increase supply chain resilience, visibility and efficiencies in the wake of the pandemic.
While the Microsoft Azure cloud is used for hosting a lot of its software, the logistics company is able to provide not only updates of shipments’ whereabouts to clients, but also to use various other features under Microsoft’s IoT umbrella, which includes artificial intelligence (AI) and real-time analytics tools.
“A lot of that is built with our custom code by our data scientists,” says Fraas. “At the same time, they can flex in and out between using the AI tools from Microsoft and building our own pieces – and they work together seamlessly, for the most part of what we need to do.”
According to Fraas, while tracking of individual items through the supply chain is less applicable for low-cost products, it is crucial for high-end electronics, such as the Microsoft Surface computers that CH Robinson moves across the globe for the tech firm. Under the partnership, it is possible to track individual items and know exactly their location, whether inside containers or warehouses.
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“That, to me, is the future,” says Fraas of the set-up with Microsoft. “Having the Azure cloud is the best option out there to do this right now, because we’re able to literally tap all of these IoT devices. As new products are built and go into this cloud option, they are able to connect with us almost seamlessly.”
The operational efficiency gains of the partnership are significant for Microsoft as one of the key stakeholders in the project, and for Robinson, which is now able to turn the experience of implementing the technology in its Vision platform into solutions for its logistics customers.
“Microsoft was one of the founders for this product – their whole supply chain is managed through Vision, with all their different partners and insight data,” says Fraas. “What our goal is now, for large customers like Microsoft, is to fine-tune the product for their needs. It makes a lot of sense to customise that.”
There is plenty of room for experimentation in the partnership, something Fraas highlights as another benefit of teaming up with Microsoft. “It truly is a partnership,” he says. “And what’s coming with the Azure cloud is pretty amazing, honestly – we are able to scale our IT investment so much using some of the different analytics and AI tools that Microsoft has out there.”
On the other hand, Fraas notes that Robinson also uses a number of non-Microsoft products, some of them hosted in the Azure cloud. “A hammer is great for hammering nails, but it’s not great for screwing a screw,” he says. “So if the best solution for us and our customers isn’t a Microsoft product, that’s fine, we’ll 100% use other products out there. But these things nowadays work together a lot more seamlessly than they ever did, especially compared to 10 or five years ago. It’s a very different world.”
Resuming plans
CH Robinson has an IT workforce of about 1,100 people spread across the world, with two-thirds based in Eden Prairie, just outside Minneapolis in the US. The rest are split between Europe – with Warsaw being the company’s main IT hub in the region, a centre where it is investing heavily – as well as Australia, New Zealand and China.
When to comes to the skills required to keep pace with technological development in the sector and, more specifically, within the company, Fraas notes that Robinson tends to hire people who have a similar ethos to the company’s objectives when it comes to lifelong learning and development.
“You can have the best technology, but you really need people who understand it and embrace the culture of learning,” he says. “That’s what Robinson has done over the years – we have frequently changed the way we’ve done things, the business, the systems. If somebody wants to do the exact same thing they’ve done for the last 20 years, this isn’t really the place for them. We need people who are constantly wanting to learn and go beyond.”
Fraas adds: “We’re pretty particular about who we hire and bring on, because we want to find those people who are really passionate and also amazing at communicating, who can understand business and translate this into [technical] needs and even push that further by presenting ideas.”
The logistics company tends to show IT staff how much control they are going to have and, says Fraas, the team don’t act as order-takers from the business. “The company outlines the vision, but we give staff the power to actually execute and really help drive it, making them owners and showing them how much input they’re going to have on that process,” he says.
Remote working ‘seamless’
The strategic role of IT at CH Robinson can be seen in the current state of its initiatives in the context of Covid-19. According to Fraas, the shift to remote working went “seamlessly” and the company had had a disaster recovery plan for quite some time.
After an initial period of ensuring that the firm was operating satisfactorily on a remote basis, the IT team went back to its pre-pandemic plans. This includes the delivery of new solutions for automating or removing friction in the booking process with Robinson’s suppliers, such as ferry and toll operators in Europe, as well as focusing on making customers’ processes easier after the UK’s Brexit transition period ends on 31 December 2020.
“We continually look at our roadmap and our vision,” says Fraas. “I don’t think Covid has changed where we were going. If anything, it has made it more clear that we really need to drive additional value. It’s not just about being cheaper, it’s really about delivering other types of value to our customers out there and ensuring that their products arrive on time.
“If you couldn’t find a truck to deliver toilet paper, that was impacting people – we could see it ourselves on the shelves all the time. Our vision covered a lot of what people are seeing now and it is really showing that the whole world needs to move faster.”
