How to find the right team to foster logistics innovation

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Photo: Gort Productions

MIAMI – When it comes to innovation in the airfreight industry, there are technological advances and there are process improvements. Both are equally important to the bottom line of a logistics firm, but they must have the right team in place to ensure that the benefits are sustainable, according to last week’s ELEVATE 2016 panel discussion, titled “Pursuing a Culture of Innovation.”

The panel that closed Air Cargo World’s one-day event on Oct. 10 engaged in a free-wheeling discussion that focused on strategies taken by logistics companies to create business environment that encourage innovation from all sectors.

Steve Hudson, president of View Technologies, explained to the audience how his company created a system using a radio-frequency identification (RFID) tag that can record the 3D location of any pallet or container as it passes through a cargo facility. Currently, he said, the RFID system is being used at many Air Canada Cargo locations. “Once it goes out dock door, you know where it’s going,” he said. “Everyone who has a logistics business wants to know where their stuff is at all times.”

Panelist Sara Van Gelder, cargo development manager, sales and marketing, for Brussels Airport, said her company is launching “BRUcloud,” a dedicated virtual community for all members of BRU’s supply chain for cargo, allowing them to share data in real time. “It’s not just innovative technology, it’s also about the process part and getting everyone involved,” she said. “We’re squeezing out the lemons in the company, offering a more efficient way to collect data and making it less fragmented than it is today.”

Matthew Deep, vice president of technology for DMLogic, a provider of warehouse management software said, “We’re a little bit sick in that we love warehousing.” Deep cited new FDA regulations for pharmaceutical serialization, which calls for the labeling of every individual unit of medications and other life sciences products in order to cut down the troubling 10 to 15 percent counterfeit rate for pharma products worldwide. “Serialization is going to help solve that,” he said. “You’ll be able to scan the bottle and know exactly where it is in the supply chain.”

Representing the far end of the innovation scale, panelist Aleksey Matyushev, founder of drone aircraft maker Natilus, described the unmanned aerial vehicle (UAV) he is currently constructing, which will be the size of a 747, but will still be able to lift 100 short tons of cargo and fly it from Los Angeles to Shanghai at 70 percent of the conventional cost. “We’re a long-range solution,” he said.

Finding the right people is key, said Matyushev. “You have to recruit cross-discipline people.” For drone development, he said that automotive engineers are more effective than aerospace engineers – something he never would have found out if he didn’t branch into other disciplines.

“You have to have a very open-minded team that is able to make mistakes,” Van Gelder said. “If you can’t make mistakes you will never have a great idea.” Truly innovative teams build bridges between their IT and the operations departments, she said, but that boundary gets blurrier every day. “In a couple of years, we may not be into in airplanes, we’ll all be in IT,” she added.

“We’re not selling the software, we’re selling the experience,” Deep said. “People really drive the innovation. They’re more than just problem solvers. Two-thirds of our staff are developers.”

Hudson encouraged companies to have periodic goals to keep people engaged and to “give them something to look forward to.” He also mentioned putting a “drawing board” online and asking team members to design something – anything, even it’s unconnected to a particular project – just to get the team in a creative environment, where they can vote for the best idea.

“The bigger you are the more susceptible you are to groupthink,” Matyushev said. “Airplanes now all look similar, because the older guy in their 50s and 60s said that ‘Airplanes look this way.’ Airbus realizes this, and that’s why they’re moving into Silicon Valley to be around more recent graduates from Stanford who a breaking away from that line of thinking.”

While innovation is often valued at companies, it is sometimes difficult for developer teams to convince management that there will be a return on investment. One argument, Hudson said, is to be ready to “disrupt ourselves before someone else disrupts us first. You have t0 be obsessed with constantly changing. Over time, you’re going to get to it, but you should not be worried about when its going to get done.”

“You have to be able to translate [the innovaton] into user stories,” Van Gelder said. Every month, provide an update to management to “get feedback and make priorities,” she said. “Otherwise it will take forever.”

Some inspiration comes from outside the cargo industry. Hudson cited Amazon’s Kindle digital reader as a disruptive change that inspired him to innovate. “Amazon has said that before they start a new product, they always write the press release first to help them narrow in on what they want to do,” he said. “Then you can go back during development and check to see if you’re meeting those goals.”

Elon Musk, founder of SpaceX and Tesla Motors, “opened up the idea that big hardware is possible,” Matyushev said. “He showed us you can make a really complex hardware product, using Moore’s law perspective, and small satellite constellations can be created and deploy cost-effective prices that no one else thought was possible.”

Even the means of ensuring innovation is maintained have been updated among the dynamic companies on the panel. When asked whether any team uses a continuous improvement program, such as lean manufacturing or Six Sigma, most speakers said they use much more informal processes, such as regular discussions and check-ins with team members.

“Six Sigma?” asked Matyushev, laughing. “That’s too slow for us! We don’t’ even bother making CAD models. We just make a napkin sketch – its faster. We like to run.”

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