Why Ericsson chooses Internet of Logistics and CLC

Digital, online, mobile & connected is already the new normal in logistics. We believe that the supply chain management information flow of the future will be open and distributed, like the internet.

One of the largest challenges in current logistics is the lack of visibility and unpredictability, especially in global supply chains. Even for Ericsson, being a large international shipper, it is a challenge knowing exactly where our shipments are. Having little insights in what is happening during transport is a major issue. Information is mostly not shared at all, shared on paper or shared late and with insufficient detail between different players across the supply chain.

 

Telecom tower Stockholm
Telephone tower Stockholm, source: Museum of Technology, Stockholm

 

The current logistics market is primarily organized around the different transport modes: ocean, rail, air and road, each using their own standards, governance bodies and ways of working. In general, digitization and standardization levels are low and almost non-existent between the transport modes. Most current digital integrations are peer-to-peer and based on limited and old technologies, such as EDI (computer to computer communication) that are expensive to setup and maintain. This is basically a similar way of thinking as in the beginning of the telecom industry: every telephone required its own physical line strung between a house or business to a phone exchange.

There are many different solutions available that help increase visibility in logistics. Solutions with IOT devices to track and trace cargo, solutions to manage warehouses, solutions that can help you optimize the lanes you are using. Digital, online, mobile & connected is already the new normal in logistics. Exploring all these solutions to optimize our own global supply, we could not help to ask ourselves: Why are these excellent solutions still silo based, peer-to-peer and why do they only function with data coming from our own company? And, is there a better way to do this?

In the telecom industry, Ericsson has seen that a siloed strategy in a horizontal oriented industry, simply does not offer satisfactory customer service. Most of us might still remember the first generation of mobile telephony. As a user you had to have at least three mobile phones with three different phone numbers to be able to call in all parts of the world. Why? Well, because the first version of mobile networks was not globally standardized: the network technology used in the America’s, Asia and Europe did not match. And that was not an acceptable situation. So, moving forward, the telecom industry had to start standardising new generations of technology. This situation resulted in a global collaboration between competing companies to ensure that all new generations of mobile connectivity are globally standardized, so users can connect to each other in the same way at every location on this planet, no matter which network solution from which vendor is used to build the network. All to ensure that the customers are happy users of global available mobile connectivity as the current situation today that everyone is used to now.

riving change in a siloed horizontal industry like logistics is not easy, but necessary to move forward in a constantly changing world. In a world where speed, comfort, usability, access, real-time visibility and freedom of choice are the norm, the logistics industry cannot stay behind.

What could be the meaningful change in global logistics. Using our our telecom background and experience in ecosystems, we captured the following requirements:

  1. Need for an open standard technology model that is capable to speak dialects and that is easy to integrate with legacy IT systems and work processes. By nature, closed or proprietary systems make interoperability difficult and very costly. The logistics industry has to work together on a global scale using all different transport modes to create an open market and start global interoperability. The solution must be able to handle all these different standards and regulations. 
  2. Need for a decentralized concept that allows competing solutions in all dimensions. A monopoly or dominance of one player is not acceptable for most players in this environment and an open marketplace is preferable.
  3. Need for security, data privacy and confidentiality, where data owners remain completely incontrol of their shared data at all time. 

To meet these requirements, we looked for open standardised technology that is globally available, that people trust and is able to handle all kind of different dialects. In our opinion there is one technology that fits this brief: the World Wide Web Consortium’s (W3C) open standards of the internet.

The Internet

used by more than 4 billion people it is by far the most popular open standard global network to exchange information with other people, governments and businesses.

The Web was invented as a communications tool intended to allow anyone, anywhere to share information. For many years, the Web was a "read-only" tool for many. 

Now this classic “Web of documents” is transforming to a “Web of data,” the sort of data you find in databases. The ultimate goal of the Web of data is to enable computers to do more useful work and to develop systems that can support trusted interactions over the network. The term “Semantic Web” refers to W3C’s vision of the Web of linked data. Semantic technologies enable people to create data stores on the Web, build vocabularies, and write rules for handling data. 

The Internet of Logistics

Together with stakeholders, representing all players active in global logistics chains, we have started the Internet of Logistics. With the goal to enable real-time visibility and paperless processes, where any player can participate within seconds.

Semantics allows us to manage different standards depending on mode of transport, industry segment, and geographical area. Also, transforming from peer-to-peer messaging to peer-to-x publishing, enables the logistics industry to have an open business process which everyone can adopt to their own specific needs. Thus, the business process is released from the constraints of messaging and each party can agree with its partners how to conduct business.

Logistics object information becomes available for connected players from the moment it is created. It enables us all to re-engineer processes, taking away unnecessary steps, putting activities in parallel instead of sequential, and making all participants much more pro-active.

Although integration of information from different data sources and sharing among many participants might suggest a centralized storage with only one powerful player or authority, we believe that the supply chain management information flow of the future will be open and distributed, like the internet.