Collaborative Intelligence for Improved Supply Chain Management

[by Mikael Lind, Wolfgang Lehmacher, Xiao Feng Yin, Xiuju Fu, Sandra Haraldson, Kenneth Lind, Rong Zhou, Andrea Bolognesi, Teemu Manderbacka, Torbjörn Rydbergh, and Stefan Wannes Väre]

Recently, global supply chains have undergone unprecedented disruptions and they face new challenges ahead. Therefore, companies seek new ways to manage the movement of their goods. Digitalization and collaboration are central to this effort. The Virtual Watch Tower, known as VWT (www.virtualwatchtower.org) shifts gears in collaboration and private data sharing and public data access for analytical services to mitigate supply chain risks, e.g., improving disruption and carbon footprint management. The VWT consists of two components, the technical network / VWTnet empowered by a digital middleware, and a group of connected members, the VWT Community. Analytical services are a key component of the VWTnet.

The VWT operates with an impartial and inclusive ethos, backed by trusted organizations such as Sweden’s Vinnova and the Singapore Maritime Institute (SMI), and is led by neutral research institutes RISE, A*STAR's IHPC and VTT. 

The VWT follows strategically the model of the traditional internet, and operationally the contractual relations between supply chain actors, e.g., cargo owners and freight forwarders. With the help of a power-of-attorney (PoA) the VWT facilitates the sharing of private data along the end-to-end chain. This data, enriched by public data sources, feeds analytical services, which unearth patterns within the data through a systematic process of data processing and analysis, offer predictions about future trends, and turn data into actionable insights. This empowers supply chain actors to make informed and evidence-based decisions. 

This article describes how the VWT enhances the risk management capabilities of the VWT Community through a minimalist approach to data sharing and analytical services.  

A minimalist design supports scale

The VWT is designed with a “less is more” mindset driving a minimalist approach as the determinant designed principle to ensure efficiency and scalability. This principle is reflected in the various parts of the VWT solution.

1)    Architecture: Leveraging the digital infrastructure of its community members, the VWT employs streamlined downloadable builders for data sharing, intelligence building, decision-making, and collaboration, e.g., organized in VWT virtual popup situation rooms.

2)    Private data sharing: The VWT requires only minimalist private datasets to be shared by the VWT Community for its services to work, emphasizing protection of interest, data efficiency, and security.

3)    Collaboration: The platform arranges partnerships for accessing public data to be synergized with private data, and, most importantly, supports collaborative action across the VWT Community, e.g., in crisis situations.

4)    Analytical services: The VWT offers a comprehensive suite of analytical services and collaborative intelligent tools designed to create collective intelligence, eliminating redundancies and overlaps with existing offerings. Third party analytical services can be seamlessly integrated into the VWT.

5)    Self-sufficient legal entity: A dedicated independent member-backed legal entity will be established to host the VWT, ensuring impartiality and long-term viability.

6)    Governance: A robust governance framework defines rules and responsibilities to maintain operational integrity, transparency, and accountability.

7)    Onboarding: The VWT facilitates a speedy and seamless integration of new members and partners for a dynamic development of the growing VWT Community.

The minimalist design principle is conducive to scale, which is important for the effectiveness of the solution. A clear and narrow scope reduces risk of error, increases efficiency, and accelerates consensus building. Easy to understand concepts are easier to trust. 

Collaboration is a critical pillar of the VWT. The collaborative approach that determines the VWT is multifaceted, with three core dimensions. Firstly, the co-creation of the concept by the VWT Community. Secondly, minimalist private data sharing across the community, which in itself is a collaborative act. Third, collaborative intelligence building, as the basis for (collaborative) preventive and corrective action. 

Analytical services for better results

Analytical services involve the analysis of data to help organizations or individuals make informed decisions, improving performance and competitive edge. Analytical services typically apply data analysis techniques, tools, and expertise to process, interpret, and transform data into meaningful insights, recommendations, and actionable outcomes. The VWT creates collaborative intelligence, mainly through three types of analytics. 

1)    Descriptive analytics: They inform about “what happened” and “what is happening”, emphasising statistical examination and interpretation of actual and historical data to better describe and understand situations. In the VWT, this is about visibility on cargo movements in supply chains. 

2)    Predictive analytics: The analytics that generates predictive models by applying statistics and machine learning algorithms to generate projections or predictions of “what is about to happen”. The VWT uses predictive analytics to calculate estimated arrival times (ETA) or identify potential risk events ahead.

3)    Prescriptive analytics: Going beyond descriptive and predictive analysis to provide actionable recommendations for decision-making, e.g., available mitigation options for risk events. The VWT approach supports collaborative actions by involving stakeholders for better mitigation.

Individual actors do not operate in isolation as they are using shared facilities such as terminals, ships, trains, trucks, warehouses, and other components of the overall supply chain infrastructure. In the VWT, analytical services are developed to identify and assess potential disruptions that may propagate along end-to-end supply chains operated by different interdependent actors. Analytical services rely on both public and private data to establish situational awareness and recommend actions. 

Analytical services can focus on a cargo owners’ supply chain, e.g., predicting the flows of cargo, or on shared infrastructure. An example of the latter includes predicting congestion at a transportation node. The VWT powers collaborative decision-making across actors in virtual popup situation rooms where data on status, disruptions, impacts, and mitigation options is shared and discussed. Analytical services can assess the situation, drive predictions and prescriptions for multiple actors, and enable decisions that change the payoffs for everyone. 

The VWT empowers stakeholders to combine private and public data sources, resulting in more accurate and informed decision-making. It provides a secure platform for data aggregation and harmonization, offering a holistic view of supply chain activities, including customs authorities. Advanced analytics within the VWT extract valuable insights, enhancing the profiling and visibility of shipments, cargo owners/traders, and supply chains. The VWT also ensures data accuracy by cross-referencing private and customs data, ultimately boosting supply chain security, compliance, and efficiency.

Analytical services for supply chain management

Analytical services play a significant role in the VWTnet. They are providing insights, which empower stakeholders like cargo owners, transport operators, and port operators to make decisions rooted in data rather than intuition or subjective assessment. Whether it’s selecting transportation routes, mitigating disruptions, or monitoring environmental impact, the decision-making facilitated by analytical services, drives operational efficiency and environmental/climate protection, minimises risks for supply chain actors and the (natural) ecosystem, and ultimately enhances the quality of services provided to users and consumers. The VWT leverages analytical services designed to provide tracking and visibility, manage risks, optimise performance, and drive sustainable practices, leveraging both public and private data feeds.

•    Tracking and visibility 

This is the foundational service offered by the VWT, as it provides extended visibility on location and status of cargo, carriers, and other actors across supply chain networks. The service is based on real-time and waypoint-based tracking of cargo, vehicles and other assets, leveraging data from multiple stakeholders collected using GPS, internet-of-things (IoT) sensors, and other tracking devices. This service benefits all actors involved but mostly cargo owners. 

VWT analytical services harness location data to monitor the movements and predict the arrivals of shipments at transport nodes, e.g., a terminal or warehouse. Taking the seaport as an example, information of shipment arrivals empowers ports to optimize its asset utilization and enhance its service offerings to incoming vessels. The port can better plan operations but also ensure that cargo does not miss connections, e.g., with other ships or trucks, barges, or trains, thus contributing to the overall efficiency of supply chain networks. 

•    Risk management

With global fragmentation, augmenting natural disasters, and rising complexity of supply chain networks, risk management has moved to center stage. VWT analytical services help to improve risk identification, assessment, monitoring, and mitigation. 

Risk identification: The VWT identifies key risk factors along supply chains based on historical data associated with past risk event assessments. 

Risk assessment: With the help of descriptive analytics, the VWT assesses the frequency and severity of potential risk events to establish a foundational understanding of risk, based on key risk factors encountered by supply chain actors in the past. 

Risk monitoring: The likelihood of future occurrences of key risk factors are assessed with the help of predictive analytics. 

Risk mitigation: VWT’s prescriptive analytics suggest strategies for risk mitigation, harnessing insights derived from descriptive and predictive analyses to generate a range of scenarios. The scenarios are evaluated against the performance criteria set by actors based on which the prescribed solutions are ranked. 

•    Sustainability management 

Driving sustainability creates societal capital but offers also economic benefits, e.g., in the areas of talent management as brand value creation. There are a wide range of strategies to help reduce the emissions of greenhouse gases (GHG). Drawing upon a combination of private data and publicly available information regarding GHG emissions associated with various modes of transportation, environmentally impactful behaviours, and sustainable shipping practices, the VWT supports members in their effort to calculate GHG emissions accurately and promptly. Primary data is the key to accurate GHG emissions calculation, real-time data the way to a timely reporting.

Based on GHG emissions data actors can compare alternative routes and prioritize carriers and logistics service providers who have adopted eco-friendly practices, thereby fostering a greener and more sustainable approach to the movement and handling of goods. The VWT should also provide information on emissions associated to corrective actions.

•    Route and transportation optimization

Optimized routing of cargo through today’s complex supply chain networks across all modes and nodes benefits all actors and stakeholders involved. Ocean carriers, for example, benefit from route and transport optimization which considers multiple variables such as traffic situation, weather conditions, congestion and disruption patterns of a port or a route, and delivery timeframes. The route and transportation optimization service can effectively reduce transportation expenses and elevate both speed and on-time delivery. 

As an example, the service assesses the current conditions of a port, predicts ship arrivals to the port based on ship arrival patterns, and then assess the possibility of direct berthing for ships. In cases that direct berthing is not possible, this service can estimate waiting times. With this information, ship operators can optimize their operations through adjusting their sailing speeds. They can choose to "slow steam", ensuring that their vessel arrives at the port when the direct berthing is more likely to be possible. This leads to operational efficiencies, cost savings, and emission reductions.

The VWT has given itself the mission to provide supply chain and logistics actors with services that go beyond the conventional purview of traditional freight management systems and tools. The VWT services expand the VWT members’ supply chain management capabilities. In essence, the VWT endeavours to be a catalyst for positive change by equipping industry players with data, tools, and knowledge needed to perform and successfully compete in the digital age while ensuring a more efficient and sustainable maritime sector.

Integrating third-party services 

VWT is not a substitute but a supplement to existing data feeds and analytical services. The aim is to enrich existing data through additional datasets of high accuracy provided by the VWT. The VWT itself needs some foundational analytics to fulfil this function and to supplement the set of analytical services of the VWT Community. 

The VWT also integrate additional offers from data and analytical service providers. The combination of own and third-party data and services is a strong foundation for collaboration across the VWT Community. VWT distributes existing digital platforms and their services across the VWTnet allowing the VWT Community to integrate third-party offerings into their overall technology stack. The contractual relations stay with the members. In the following we list third-party service offers that could be supported by the VWT.

•    The existing digital service platforms and services used or not yet used by the VWT Community. The digital service platforms provide the necessary authentication and APIs to expose their data and services. Connectors for interfacing with the VWTnet will be developed as plugins to the VWTnet. 

•    Commercial data providers supplying relevant non-free/payable publicly accessible data. A minimalist dataset has been defined for private data, e.g., cargo arrival and departure information, and public data, e.g., AIS and weather data. The local VWT instance is designed to connect to the company’s private and purchased data and data services. 

•    Free public data services. VWT creates services to connect to the open-domain data that is provided to the public without any cost. Such data includes publicly available regulatory information, airport/seaport traffic statistics and environmental monitoring data.

Third-party data is an important component improving the performance of the VWT. A table of available feeds examples relevant to supply chain management is provided in the article How the virtual watch tower complements private data with public data. Many providers leverage different forms of analytics to augment quality and value of their data and analytics offerings. In future, the integration of map services, visibility offerings etc. is contemplated.

Effective risk mitigation and fraud prevention can be achieved through the integration with customs systems for data verification. This approach, which involves cross-checking private business data with government customs data, would introduce an unmatched level of credibility and authenticity to information used in analytical services. By establishing direct integration channels, this verification process becomes more efficient, swiftly detecting, and correcting data discrepancies or inaccuracies. Consequently, it substantially diminishes the risk of fraudulent activities, such as record manipulation or false declarations. This robust data validation mechanism not only bolsters the reliability of supply chain information but also reinforces the integrity of the global trade ecosystem as an additional verification source.

How actors can access the services 

The following processes and requirements enable access to digital platforms and analytical services, ensuring a well-functioning solution. 

•    Each VWT member will be registered as a local VWT instance managed by the VWT; members include cargo owners, freight forwarders, carriers of all modes, terminal operators, and providers of data and analytical services.  
•    Both free and payable data, analytical services, and their associated programming interfaces such as APIs and URIs will also be registered and managed by the VWT. 
•    The VWT manages access rights of the data and analytical services, authentication of the individual VWT instances, and the rules of interaction among VWT instances.  
•    The VWTnet will facilitate the exposure and access to analytical services or public data provided by third-party providers.

In future, a crowd-based ideation and validation process could make the selection of data feeds and analytical services more efficient. Access modalities form a part of a lean VWT Governance framework that protects the interests and assets of individual VWT members and the VWT Community as a whole. 

Concluding remarks 

Predictive and especially prescriptive analytics empower supply chain actors to mitigate and avoid compounding effect of disruptions in the supply chain. The VWT adopts a distributed approach to data sharing and analytics, empowering each VWT Community member to combine, leverage, and synergize its own data, private data from other VWT member, third-party datasets, and analytical services for decision support. The VWT follows the principal idea of a federated network of platforms to connect members using the logic of cargo owners end-to-end supply chains as the common object of interest. 

Private data and analytical services are critical components of the VWTnet. They are the result and prerequisite for effective collaboration across the VWT Community. It is the private data shared across the distributed and federated network of connected VWTs that defines the uniqueness of VWTnet. The analytical services offered or integrated by the VWT further extract and materialize the value of that unique contribution.

Acknowledgement 

We acknowledge and appreciate inputs received from Per Kreuger at RISE.

About the authors 

Mikael Lind is world’s first (adjunct) Professor of Maritime Informatics engaged at Chalmers, and Research Institutes of Sweden (RISE). He is an expert contributor at World Economic Forum, Europe’s Digital Transport Logistic Forum (DTLF), and UN/CEFACT. He is co-editor of the first two books on maritime informatics, and is co-author of Practical Playbook for Maritime Decarbonisation. 

Wolfgang Lehmacher is partner at Anchor Group and advisor at Topan AG. The former director at the World Economic Forum, and CEO Emeritus of GeoPost Intercontinental, is Advisory Board Member of The Logistics and Supply Chain Management Society, Ambassador F&L, Advisor GlobalSF, Advisor RISE, and member of the think tanks Logistikweisen and NEXST. 

Xiao Feng Yin is a principal scientist of Institute of High Performance Computing, Agency for Science, Technology and Research (A*STAR) of Singapore. He has led various grants and industry projects in the areas of maritime study, logistics and supply chain. He received both his Master and PhD degrees from Nanyang Technological University (NTU), Singapore. 

Xiuju Fu is Maritime AI Programme Director and senior principal scientist at Institute of High Performance Computing, Agency for Science Technology and Research (A*STAR), Singapore and active in developing and applying AI, big data intelligence, simulation, and optimization techniques for complex system management. Currently, she is leading Maritime AI Programme in Singapore for research in maritime data excellence, maritime AI modelling excellence, maritime AI computing and application excellence.   

Sandra Haraldson is Senior Researcher at Research Institutes of Sweden (RISE) and has driven several initiatives on digital collaboration, multi-business innovation, and sustainable transport hubs, such asthe concept of Collaborative Decision Making (e.g., PortCDM, RailwayCDM, RRTCDM) enabling parties in transport ecosystems to become coordinated and synchronised by digital data sharing.

Kenneth Lind is Senior Researcher at Research Institutes of Sweden (RISE) and has driven several research projects focusing on system architecture and software engineering challenges in the automotive and transport sector. He holds a PhD in software engineering from Chalmers University of Technology and has 20 years of industrial experience as technical leader.  

Rong Zhou is a principal scientist of Institute of High Performance Computing, Agency for Science, Technology and Research (A*STAR) of Singapore. Her research interests include supply chain and logistics management, supply chain risk management, and production scheduling. She received her PhD degree from National University of Singapore (NUS).  

Andrea Bolognesi is the CEO of Strategy Object, a global tech partner for governments and customs authorities, empowering them to create and optimize their digital applications and processes. Formerly a computing engineer at the European Organization for Nuclear Research (CERN) and the United Nations Conference on Trade and Development (UNCTAD), he is a computer scientist actively engaged in blockchain research, with a particular focus on international trade and the global supply chain. 

Teemu Manderbacka is Sustainable Shipping Research Team Leader at VTT. He contributes to Safe and Energy Efficient Maritime Transportation through technological improvements. He has strong background in Naval Architecture; hydrodynamics numerical methods, experimental research, and software services to ship owners and operators to improve ship technical performance and energy efficiency.

Torbjörn Rydbergh is founder and Managing Director of Marine Benchmark and has a M. Sc in Naval Architecture from Chalmers and has been in the shipping and car industry for the last 25 years. He has worked for IHS Markit, Lloyd’s Register, and Volvo Cars among others.

Stefan Wannes Väre is a logistics professional with more than a decade’s worth of experience in the shipping industry, and manager of Special Sea Services at Stora Enso, a leading provider of renewable products in packaging, biomaterials and wooden construction, and one of the largest private forest owners in the world.