Interview
Let's talk about the study.
Our assessment of the results.
Interview
Let's talk about the study.
Our assessment of the results.
INFORM develops software to optimize business processes using artificial intelligence and operations research. It complements traditional IT systems and increases the profitability and resilience of many companies. In vehicle logistics INFORM is seen a market leader for IT solutions. In the following interview, Hartmut Haubrich and Ruud Vossebeld reflect on the results of the INFORM Trend Report on IT in Vehicle Logistics Management 2024.
Hartmut, this was the third INFORM study on IT in vehicle logistics management. Which result surprised you the most?
Perhaps not a surprise, but something that I would like to highlight first is that for years, the industry has been struggling for transparency, efficiency, and collaboration, with constant steps forward. Now the results of the study confirm our observation that volatility and capacity bottlenecks have become the major issue. Over half (56 %) of respondents believe they will be short of capacity until 2025 or longer.
Many market participants are therefore not primarily competing for the fastest or most precise lead times, but for capacity. Some of their customers are happy just to find a compound where they can still have vehicles processed. Therefore, compound operators want to be able to offer more capacity by improving operational efficiency. It is no coincidence that many respondents consider this to be their biggest challenge.
What I found quite surprising compared to our previous studies is how companies deal with software. The proportion of self-developed software in vehicle logistics is falling continuously and perhaps even faster than before. In 2013, two thirds of respondents (67%) deployed self-developed software. The proportion fell to 63% five years later and it is now at 54%. At the same time, IT budgets seem less restrictive: In 2018, 59% of participants cited budget contraints as a main barrier to implementing a new software system. Now it is only 39%. It looks like IT is understood as a key-driver of a holistic supply chain management.
Therefore, compound operators want to be able to offer more capacity by improving operational efficiency. It is no coincidence that many respondents consider this to be their biggest challenge.
Therefore, compound operators want to be able to offer more capacity by improving operational efficiency. It is no coincidence that many respondents consider this to be their biggest challenge.
You mentioned the increase in operational efficiency as the most frequently cited (71 %) challenge in the industry. How can IT and especially AI support that?
Ruud Vossebeld: Sophisticated vehicle logistics software based on AI and advanced mathematics can for example intelligently prioritize vehicles or work steps, dynamically assign resources in real-time with the overall process of an organization in mind, and automatically react to changes or disruptions. This way of dynamically planning and controlling processes leads to much more efficient operations. In addition, employees are relieved of ad-hoc actions that had to be taken to put out fires if something was not going according to plan.
Of course, these systems also need to be able to reliably forecast demand. These are questions such as which vehicle needs to be processed where and when, and which steps, resources and parts are required for this. Also, information on whether everything is available at the required time or which task needs to be done to completet a job. The system uses such forecasts in operational decision-making, but it also provides employees with end-to-end transparency and, therefore, a significantly improved ability to provide information to customers and partners.
Artificial intelligence in particular is advancing steadily and at a rapid pace. Thus, we can assume we will see many more advancements and completely new applications in the coming years.
Artificial intelligence in particular is advancing steadily and at a rapid pace. Thus, we can assume we will see many more advancements and completely new applications in the coming years.
Artificial intelligence in particular is advancing steadily and at a rapid pace. Thus, we can assume we will see many more advancements and completely new applications in the coming years.
A full third of respondents believe that their vehicle logistics systems are not fit for the future. What do you think is most important to be considered future-proof?
Hartmut Haubrich: Basically, such a system should, of course, be specially developed for the challenges and processes of vehicle logistics. It should be able to map the dynamics of reality and translate them into efficient operations planning, both in the short and medium term. But in addition to the functionalities that I have already talked about, we see many innovations coming in the area of AI, especially the currently much-discussed "large language" models.
In one case, for example, we are currently testing an application in which AI reads and interprets incoming customer inquiries and generates a suggested response, which the person responsible only has to check and approve. We will see a lot of progress in this area of more efficient customer service. But even beyond that, habits will change in terms of how software can be operated by language. In the best-case scenario, even complex software will become more accessible for new employees, for example through assistance systems. We are starting to integrate this into our products and drive this forward.
In one case, for example, we are currently testing an application in which AI reads and interprets incoming customer inquiries and generates a suggested response, which the person responsible only has to check and approve. We will see a lot of progress in this area of more efficient customer service.
Looking at the overall results, is there anything else that you personally would like to share or what you think is important for the future of the industry?
Ruud Vossbeld: A big challenge, for example, will be to achieve the objectives of the car manufacturers to move to green electric trucks for parts and vehicle distribution. This will mean considerable investments in electric trucks and more long-term partnerships between OEMs and logistics partners. Hartmut Haubrich: Generally speaking, we think more collaboration and partnership is needed for aligning the suppy chains. This could include better forecast sharing, for example. Stakeholders in transport or yard management could then use the data to prepare even better for the upcoming volumes that should fit within the capacities. With this, software can certainly help, but it goes beyond that.
A full 72% of respondents said they would like to see more collaborative decision-making with partners via the web. You will discover this and many other valuable insights on the following pages.