How to leverage platform innovations to overcome supply chain challenges

Transporeon CEO Stephan Sieber recently joined Maria Villablanca, co-founder and CEO of the Future Insights Network, on her Transform Talks podcast to talk about the art of keeping things simple, how to leverage platform innovations to overcome supply chain challenges, and what the future holds for supply chain and transport. 

Keep reading to get a summary of this dynamic duo's interesting chat or click here to listen to the podcast it in full.

Maria Villablanca: Transporeon’s headquarters are located in the city of Ulm, in the south of Germany, which is the famous birthplace of Albert Einstein, who once said “Everything should be made as simple as possible, but not simpler.” So, when you think about the work that you're doing at Transporeon, how true would you say that is?

Stephan Sieber: I think it's very true. I normally say things need to be simple, but not simplistic, right? I think it's a key task of leaders, not only CEOs but any leader, to sort of boil down complex stuff into simpler and more understandable concepts. That's the only way to focus and keep the dynamics in an ever more volatile, interdependent, connected world.

Maria Villablanca: I want to talk about the idea of a platform of innovations to overcome some of the challenges supply chains have been facing for the last few years. The biggest thing that people tell me is that they're stuck with how to operationalise innovation, transformation, and overcoming crisis and complexity. So, could you maybe talk to us a little bit about what it means for you and your company? What valuable lessons have you learned?

I truly believe that nobody is able to manage all of these crises in parallel without adequate support and technology — which needs to be available at marginal cost at any point in time at any place in the world to help us to manage complexity a lot better than most of us do today.

Stephan Sieber: Good question. We've gone through four challenging but also very exciting and successful years, which always makes things easier. We've doubled the size of the company mainly through organic growth. On top of that, we've done seven acquisitions, which mainly brought additional capabilities to the platform and added new talent, new thoughts and new creativity to the company. And then, you know, over those years, we've sort of slipped into what I call a “poly-crisis”. It's a conjuncture of several interconnected areas in crisis: supply chain, energy, geopolitical, economic, financial and climate. And I truly believe that nobody is able to manage all of these crises in parallel without adequate support and technology — which needs to be available at marginal cost at any point in time at any place in the world to help us to manage complexity a lot better than most of us do today.

Maria Villablanca: We've had relative stability for the last seven years, except for maybe localised crisis. And now we do have a “poly-crisis” or what I call a “cocktail of crises” – this is, like you say, economic issues, supply issues, demand issues, energy issues, war. So, you're right, digitisation plus talent are probably going to be the things that get us out. Now, I'm curious about the common pitfalls that many companies fall for when attempting to leverage platform innovations to overcome supply chain challenges. And you're in a really lucky position because you work with so many different types of companies (shippers, forwarders, carriers, retailers). I'd be interested to hear your perspective on that.

Stephan Sieber: Absolutely. First of all, in my opinion, one of the absolute key attributes of a platform is that it's not implemented to the benefit of one single party, it's implemented to the benefit of a network. And in our case, we solve the freight problems where they actually occur, in between companies, and not inside a single company. Now, that requires all the parties to some extent to collaborate, which is tough because you need to align the interests. So, you know, one pitfall that we see is that customers tend to try to make projects too big. And here at Transporeon, we actually try to cut it down, focus primarily on the problem we need to solve and get it sorted out. Once the customer cashes in the benefits of their investment, then we'll think about the next steps. So, we cut it in small pieces, do one thing at a time, and understand that a platform has four major functions. It's an accumulation of tools and services with a set of rules and standards that empower a network, a community. And within this network, everybody will enjoy lower transaction costs in both matchmaking and process execution. Now, I think that rules and standards are critical, we need to agree on a certain taxonomy and a certain way of doing business with each other. Otherwise, we will never be able to exploit those network effects. And everybody wants a platform, but hardly anybody is willing to really go that step and say I am committed to being part of that. So that's a bit our role as the orchestrator, as the operator of a platform we created.

A crisis or a disruption is actually more of an opportunity than it is a threat

We’ve recently added innovations, new features and functions to our platform with three new products launched at Transporeon NEXT, an event in which I stated that “a crisis or a disruption is actually more of an opportunity than it is a threat”, but this is only true when you approach it with the right mindset. So, if you're completely exhausted, coming out of a massive transformation project that didn't deliver on the value you expected, and took twice as long as you thought it would be, then you will not be able to look at the next disruption as an opportunity, but you will look at it as a threat and you will basically try to push back. That’s why we provide a modular platform with clear implementation projects. So, we and our customers can embrace the disruptions as opportunities to grow.

Maria Villablanca: Do you think that companies that embrace being part of a network-based platform to collaborate better are better off from a resiliency and competitive advantage perspective?

Stephan Sieber: Absolutely. I mean, interoperability ultimately gives you. If you just look at the supply chain challenges we were facing in the last three years, then you need the optionality and interoperability that you can get through a platform, through a digital ecosystem that you're a part of. And ultimately, our goal - and we are not there yet - is that at some point in time, in our network, everybody can do business with everybody else in the network, even though they have probably never met before. That's the point where we could achieve the ultimate network effects, and that is contributing big time to supply chain resilience.

Automation, real-time insights, and collaboration

Maria Villlablanca: I love the example of Elvis Presley. But, shifting gears again, given everything that we've gone through in the last couple of years, how important do you think it is for those in the supply chain and logistics sector to start becoming comfortable with the idea that supply chain management is defined by exceptions?

Stephan Sieber: I think it's absolutely critical. We live in a super-connected, fast-moving, intertwined, interdependent world where one little change in one end of the supply chain can lead to massive disruptions on the other side. And to manage this you need to have an infrastructure. We always talk about the ARC concept (automation, real-time insights, and collaboration). And we need to take all the help we can get from technology to automate as many processes as possible because we're just running out of labour, we're running out of people that can cope with the amount of complexity, data and things happening right now. So, we try to always approach our freight problems with the ARC concept so we can solve them in a better and more valuable way for our customers - and hopefully also in a differentiating way compared to our competitors.

Maria Villablanca: So, I want to ask you about the future, as there is some news out there. You guys are growing, you guys are doing a lot of amazing things. It'd be interesting to hear where you see the future of this industry and your role in it.

Stephan Sieber: I would like to see Transporeon really become a part of the digital backbone of the transportation industry, at least for the areas we are strong in like truckload (LTL, FCL, LCL). I want the platform to evolve into an innovation platform at a higher pace in which customers log on to the platform and they get proactive recommendations on what they can do better, things the platform can do for them, and how they can derive more value out of it.

The second point is probably the news you were referring to. We've been acquired by Trimble. The acquisition closed on the 3^rd of April, so not too long ago. Obviously, we've done some work in preparing post-merger integration, and I'm excited about this because there is an obvious geographical match between Trimble's North American origin and our European origin. But that's only the surface right, there’s also Trimble’s experience with digitising the physical world, with GPS technology for instance, and our pure digital origin. And, last but not least, also Trimble's origin around service providers (carriers), and how they operate their assets and their fleets, and our origin around shippers and how they manage their loads. If you bring those things together, you see a very balanced platform with a global footprint that understands load-to-asset and asset-to-load allocation — and that is what is needed to solve the right problems at scale. So, I'm absolutely convinced that this combination will bring us a lot faster to this point where we can say we're the digital backbone of this industry. And companies like this need to exist in the world.