Centiro interview: The cloud and last mile delivery
Centiro’s Global Business Director Bobby Shome on how its cloud-based global logistics platform is empowering companies to enhance their last mile delivery services.
In 2017 the market for last-mile delivery solutions was worth $181bn, growing in double digits year on year. Founded in Sweden in 1998, Centiro is focused on delivering last mile delivery solutions – increasingly vital in our ecommerce world – by helping consumers interact better with retailers and brands around the management of their orders. As consumers move away from physical stores and interaction, being able to provide a good customer experience now requires all elements from the retailer through to the supply chain to work together, including last mile delivery.
Centiro’s Global Business Director Bobby Shome tells us: “When you order an item you get updates from the carrier about the progress of your delivery, but if there’s a problem who do you speak to? Who’s taking responsibility for that order? From a physical standpoint it’s the carrier, but from the ownership perspective it has to be the retailer.” Shome believes there’s a disconnect between the consumer knowing what’s happening and then being proactively informed. “In a big nutshell, our solution brings retailers and consumers closer to deliver an improved end-to-end experience.”
To improve the visibility of its solutions, Centiro is using predictive analysis developed through machine learning. “We’re looking to implement this to compute potential failures before they happen, initially based on historical data and existing algorithms, but going forward we’re utilising this solution around advancements in AI to analyse future events to help us plan the right delivery solution for a given order,” explains Shome, highlighting Centiro’s longstanding partnerships with JDA and IBM. “Our technology is a pure cloud-based solution so integrating it is straightforward – we’re agnostic in that sense,” he adds.
Centiro are cognisent of the fact that some customers may previously have had bad experiences, so are happy to help them through changes via a bespoke process. When things go wrong in the supply chain, as seen with the nightmare experienced by KFC in the UK earlier this year, it damages consumer confidence and the expectation of a brand’s products always being available to its customers. Hence the need to implement any transformations carefully – Shome notes this is the biggest challenge for customers Centiro deal with, the fear of change.
“They often have on-premise, highly customised legacy solutions and worry about how the business will survive if orders are compromised. To combat this fear, we can run a co-existence model and encourage a baby step approach to implementing our solutions so we de-risk as we integrate.
“We have visibility tools that can take information from existing systems, not just the current carrier management solutions, and then we can start providing our solutions. That gives companies more predictability and better order visibility across ecommerce, supply chain and customer services – which we find often exist in silos.
“With that picture in place, the customer can understand better where they are succeeding and where they can improve. We leave it to them to decide if they want to continue with our co-existence model or utilise more features and functions and migrate fully towards our solution going forward. We want to prove what we do can be done well and on time. Today the number of open slots a retailer can go live with is reducing, so we offer a way of showing we’re able to deliver on those strict time lines. Through collaboration we can then provide for more volume, additional lanes and further functionality.”
The philosophy behind Centiro’s mantra – you plug in once and we plug in the world – comes from working with a host of global brands across different geographies that need the ability to use various carriers in a host of countries. They need to be able to deal in large volumes, while utilising a customisable solution always available to them without having to bend the product so much they miss out on functions and features that are in the pipeline. “Ours is a true cloud solution,” confirms Shome. “Some say they have a SaaS product, but to me that’s just a way of licensing the price, it doesn’t mean you have a public cloud solution available. This is what we can provide and because of our set up each customer has their own version of our latest solution customised to their needs and compatible with our global product and any future upgrades. At some point legacy solutions become unsustainable for the vendor and hinder the progress of the customer.”
Shome is proud that Centiro is financially stable and aims to makes sure its projects are profitable for everyone involved. “We want to work with customers that have growth agendas and understand the value we bring,” he says. “Hence they come to us via the network we’ve built over many years.” It’s one of the reasons why Centiro was named Best Technology Partner at last year’s JDA Connect in London, recognising the alignment of Centiro’s Last Mile solutions to JDA Intelligent Fulfilment solutions allied to creating joint value for customers. Creating that value starts with being ahead of the game by recognising, and reacting to, industry-wide trends.
“We’re seeing more legislation around cleaner fuels and the congestion relating to pollution,” notes Shome. “The UK is highly advanced in last mile delivery with home deliveries increasing exponentially since the advent of online. We need collaboration to combat this environmental impact so the challenge is still to service customers in a way that’s as green as possible. The Mayor of London’s Transport Strategy is an encouraging first step towards securing a sustainable and more environmentally friendly future for deliveries. If London is to have any chance of meeting these goals the Mayor has set out, organisations from all parts of the industry – from retailers to delivery partners – must start working together in a more collaborative way. This approach could be extremely effective when it comes to deliveries, with more businesses working together, where appropriate, over the last mile to reduce the existing levels of delivery traffic, particularly during the morning peak.”
Meanwhile in the US, deliveries have much larger distances to cover to even be in a position to deliver last mile services. “We need more visibility here, but not just on primary distribution (port to delivery centre),” notes Shome. “Our specialism is secondary outbound distribution (last mile), in some cases in the US last mile is the tertiary outbound distribution because deliveries go from a factory or port to a regional DC (delivery centre), and then a local DC before going out for delivery. What I’m seeing is the visibility of that big order being broken down into a smaller order from a consumer perspective. Where in the past we’ve had processes that made sense to the retailer or brand, now we need to have that visibility also available to the consumer. It’s why the US market is slightly behind - the main issue is that primary/secondary function before local heroes complete the local last mile delivery where there’s no visibility or ownership of the process. This is where Centiro can really help to be a systemic enabler to get that customer expectation to be a part of the solution.” Shome expects to see an acceleration of last mile capabilities thanks to the ‘Amazon effect’ driving customer expectations.
Shome’s goal for Centiro is to continue working quietly in the background with more brands – whether wholesalers, retailer or manufacturers – that want to address b2c and b2b2c, and with logistics providers who are starting to offer a total ecommerce solution, managing inventory and taking payment on behalf of brands, rather than just fulfilment. He concludes: “In the past supply chain was about removing costs, but today the businesses that are forging ahead see supply chain as a growth driver and enabler. So, getting their supply chain to add value requires investment and they are the ones that will do well in the future and take advantage of the speed of change we’re seeing in our industry around last mile.”
Kuehne+Nagel cuts carbon footprint by 70% for Honda China
Around 16,000 tonnes of CO2 has been cut from supply chain of Honda's China-based manufacturing division through a road-to-rail transformation in partnership with logistics leader Kuehne+Nagel.
The programme was developed through KN Sincero, the joint venture between Swiss headquartered Kuehne+Nagel and Chinese automotive logistics firm Sincero, established in 2018.
KN Sincero worked with Honda China to develop an integrated solution to convert much of its domestic long-haul trucking to train lines, using regional hubs to improve supply chain performance and further reduce carbon emissions. The programme delivered consolidations as well as value-added services, including sorting, scanning, repackaging, GPS track and trace, and recyclable container management.
"Kuehne+Nagel has always been a supply chain partner that we can rely on, to help us improve our supply chain performance whilst also achieving our environmental goals,” said Mr. Jiang Hui and Mr. Takuji Kitamura, Joint General Manager of Wuhan Dong Hon, the logistics affiliate of Dongfong Honda Automotive.
After six months of shifting to the road-to-rail model, new supply chain reliability and efficiencies are expected too trip 16,000 tonnes of carbon emissions annually. The carbon savings represent an enormous 70% reduction in total.
"Automotive is one of the most important sectors in contract logistics, particularly in China, the world’s largest automotive market,” added Gianfranco Sgro, member of the Management Board of Kuehne + Nagel International AG, responsible for Contract Logistics. “I am glad that Kuehne+Nagel and Honda share a common vision of service, innovation and sustainability.”
Kuehne+Nagel’s Net Zero Carbon programme
Kuehne+Nagel announced its Net Zero Carbon programme in 2019 with a dual purpose to reduce CO2 output in its own logistics operations, as well as partnering with organisations to minimise their own impact on the planet. Kuehne+Nagel reached carbon neutrality globally in 2020 throughout its own, direct emissions, and is now focused on developing its capabilities to serve partners.
Dr. Detlef Trefzger, Chief Executive Officer of Kuehne+Nagel International AG, said the programme is “a package of measures to fight CO2 emissions and provide sustainable and innovative supply chain solutions – hand in hand with our suppliers and customers”.
As part of the initiative, Kuehne+Nagel established its own nature projects in Myanmar and New Zealand, and invested in ‘nature-based’ carbon dioxide compensation projects to strip harmful emissions from the environment. It is committed to being CO2 neutral for shipments in its network of transport suppliers by 2030.