Expeditors Chief Information Officer Chris McClincy talks about how the coronavirus pandemic has moved technology in logistics from a position of evolution and efficiency to one of stability and safety. He also discusses the relationship between technology and the transportation world, why it's important to be cautious of hype, and the latest trends that have surfaced to keep the world moving.
Chris Parker (Host): Hello everyone and welcome to The Expeditors Podcast where you can hear about front of mind topics in the logistics and freight forwarding industry through the lens of a global logistics provider. I'm your host, Chris Parker, and today's topic: The Pace of Innovation. Technology has always been an important piece of the logistics puzzle but since the impacts of COVID-19 caused the world to do an about face and especially with regards to supply chains and how to keep goods moving, are innovations at a standstill? We'll also discuss what's hot right now, what to be aware of, and how to be prepared to adopt new technologies and solutions. And with me to talk about it today is Expeditors' Chief Information Officer, Chris McClincy. Chris, welcome.
Chris McClincy - CIO: Hey Chris, thanks for having me it's great to be here with you.
Chris Parker: Yeah, yeah, how are you doing today?
Chris McClincy - CIO: I am doing well. How about yourself?
Chris Parker: I'm doing okay. I think I will say that now that my commute has gone from 50 minutes to 50 feet, the only traffic jam that I see these days is the kind that goes on my toast and it's delicious.
Chris McClincy - CIO: That's good.
Chris Parker: Thank you, thank you - I worked hard on that one. Well, why don't you tell everyone who's listening a little bit more about yourself and why do you care so much about logistics and technology together?
Chris McClincy - CIO: Sure. Yeah, thanks for asking. I've been in this industry for a while, north of 25 years, started off in trucking and then been with the Expeditors for the past 22 years and always in a technology capacity. I've had the pleasure of working in a variety of different technology-focused roles up until the role that I'm in today which I've done for the past, I guess, five or six years now. And the ability to support, drive, and enable just logistics flows around the world has always been something that's really appealed to me and then being able to apply technology to that is kind of a dream job to be honest with you.
Chris Parker: So then with your background, what kind of relationship do logistics and technology have from your point of view?
Chris McClincy - CIO: Yeah, it's a really symbiotic relationship and this goes back quite a ways, you need go back 20 or 30 years. And taking advantage of technology for productivity, efficiency, and optimization of just core business processing has been around for a long time. And then as the entire world we live in continues to take advantage of advancements in technology, then our industry has incorporated those as well. I mean, we see this in our daily lives, we see it in our retail transactions and we see it in our supply chain management and transportation and logistics activities too. As technology continues to provide opportunity to make a big difference then it just makes aspects of how we incorporate that into our business in our industry that much more exciting.
Chris Parker: Technology, I mean, from a freight forwarders perspective then is very important with how we use information and data to keep track of things. Why is it important for customers and for the general public really to care about what's going on behind the scenes outside of, “Where's my stuff,” and, “When can I get my stuff?”
Chris McClincy - CIO: Well, I think, yeah, there's a couple of different ways to look at that. One is this immediate gratification society that we live in today in terms of, "Hey, where's my stuff? I need it right now, where's it at?"
Chris Parker: There's a couple parties I can blame for that.
Chris McClincy - CIO: That expectation applies to everything now. And so certainly in our industry or if you look at again just supply chain management, that proverbial question, “Where’s my stuff,” is one that has to be answered. And technology plays a key role in helping us answer that question with more precision and better accuracy certainly year-over-year as time goes on. And then you can look at the simple macroeconomic factors - cost, capacity, optimization - all of those things continue to be really important not only to consumers who are ultimately buying a lot of the goods that are moving around but there are corporations and there are organizations that are producing manufacturing and shipping those things as costs continue to become an important factor, particularly as we're trying to deliver things same day, next day, or two-day, so technology plays a really big role in trying to keep those costs at bay so to speak.
Chris Parker: Yeah, absolutely. I think, because technology has just exploded within the last 30 years, 20 years, like you've said yourself, a term that I've been hearing is digital forwarder, digital freight forwarder. What's the difference between that and a traditional freight forwarder?
Chris McClincy - CIO: I love this question because we love to call everything digital it seems. And so I'll come about it in maybe a little bit of a different approach but ultimately try to answer the question. Our business and our industry has been around for a long time and there's this incumbent landscape of organizations like ours that have been competing and doing this. And those organizations, ours included, have been leveraging technology to do that all along the way. Probably you go back a couple of years ago and companies started to reinvent themselves. It used to be, “I was a tire company but now I'm a software company who happens to sell tires.” And that was when this I think movement to really become digital started to turn its face on our industry, logistics and freight forwarding and whatnot.
Chris McClincy - CIO: And then subsequent to that the startup world, that startup community, really started to look at us as well and we saw a number of startups start to appear and sell highly digitized software packages or services. And that was where the introduction of the term really came about, digital freight forwarder, and it was a way I think for newcomers or recent entrants particularly from the startup world to really try and create differentiation by saying, "Hey, if all these incumbents are traditional freight forwarders by the way we're the digital freight forwarders," and that got a lot of early on.
Chris McClincy - CIO: I think if you're really close to the action, so if you're in this industry whether you're a supply chain professional or you're responsible for logistics or transportation in an organization, you understand that in order for any company to compete and to be able to perform a reliable service you have to be digital today. So that distinction between those that are calling themselves digital versus those that aren't is becoming a lot blurrier today than perhaps it was a couple of years ago.
Chris Parker: So then you're saying that we could see both terms kind of combine into one. What do you think that would be?
Chris McClincy - CIO: Well, that'd be a new one, Chris, I don't know what it's going to be but re-invention is an important part of competitiveness and whether it be the incumbents or the new entrants into the market or a demographic of competitors that we haven't imagined yet, there'll be a new term that we get to step into in the coming years for sure.
Chris Parker: Absolutely. Then with the relationship between logistics and technology before as it was growing and exploding and new companies are popping up here and there to take a crack at it, COVID-19 happened. How has the relationship with logistics and technology been affected, been changed, been disrupted, what's happened now?
Chris McClincy - CIO: Yeah, it's been super interesting and this of course isn't unique to our industry. I think everybody in the world right now is looking at the situation saying, "This is super interesting." If we just peek through the lens of technology or maybe look behind the curtain there, it's done a couple of things that are really interesting, and there's a bit of a spectrum here. On one side of that spectrum, I'll just call it the ground game, companies had to have the fundamentals in place. You had to have reliable infrastructure, you had to have technology in place, you had to have digitized business processes to really make that transition to what COVID has forced the world to do and largely work from home, be disparate. Recognize that you have to transact with parties in different ways than you did previously.
Chris McClincy - CIO: You could really tell throughout that transition those that had played a good ground game in taking care of the basics versus those that didn't. And so that really caused a lot of organizations to have to invest and respond rapidly or for other organizations just to take advantage of the investments that they had already made. So you had on one end of that spectrum was really the ground game on the other end was really a pretty rapid increase in innovation in many areas where necessity is the mother of all invention at times and so you could certainly peek within our organization.
Chris McClincy - CIO: And there were projects or initiatives that were taking place that may have been multi-month or multi-year and all of a sudden it's like, "Hey, why don't we get that done in a couple of weeks because we can take advantage of some of those things right now?" I think you probably saw that across a lot of organizations where they may have had transformative or innovative initiatives in the forefront maybe with a typical roadmap and those things got expedited or escalated pretty quickly. It's caused a lot of innovation to happen pretty quickly in areas that otherwise may have taken a bit longer time, which I think has been really good.
Chris Parker: I guess, when it comes to innovation we're maintaining the pacing essentially, right? People had to do an about face, take a pause, and reprioritize. What kind of innovation is now leading as opposed to pre-COVID?
Chris McClincy - CIO: Yeah, certainly they're collaborative innovations. The ability for folks that are really collaborating and engaging and working on supply chain management, transportation, or logistics, that's becoming increasingly important, staying connected, staying at forums, staying organized, whether that be face-to-face, virtually, communication methods or even how we're managing supply chain flows and activities together. Those things that maybe we would have relied upon typically from a face-to-face perspective or an asynchronous approach to use a technical term have become far more synchronous. They become far more integrated and far more collaborative and technology's played a pretty big role in making sure that that can happen.
Chris McClincy - CIO: I think too you've seen a lot of diversification at supply chain needs. The landscape in terms of capacity and what's happening with the assets as it relates to the airlines and the steamship lines and trucking and rail, all of that's been disrupted as well. And so how we overlay or enable technology or the solutions that enable those assets and that capacity to be managed has seen quite a bit of innovation too in order to ensure that again supply chains continue to run as seamlessly as possible throughout this entire situation we're in. So there's been a lot of interesting innovation, a lot of escalation or acceleration of projects and initiatives that were in motion and to really watch how the whole world has responded to this situation that we're in right now.
Chris Parker: What about operations in terms of in the warehouse, on the boats, on the planes? Is there any kind of new technologies that you are seeing that are gaining ground or traction?
Chris McClincy - CIO: Yeah, absolutely. Clearly social distancing technologies are starting to play a really important role-
Chris Parker: Right, robotics comes to mind or something like that.
Chris McClincy - CIO: Absolutely. We're seeing a lot of robotics investments but also really simple things just in terms of proximity sensors, right?
Chris Parker: Yeah.
Chris McClincy - CIO: I mean, all organizations are taking social distancing very seriously yet we know that we have to have people working together in order to actually handle the physical goods, whether that be in warehouses or in and out of airplanes and steamship lines. Just having proximity-based technology so people understand whether they're coming in proximity of somebody and not maintaining social distance and then connecting that type of technology too to the warehousing infrastructure and some of the typical asset and product management technology that's out there.
Chris Parker: In your day-to-day, what do you see that gets in the way of innovation or the evolution of technology when it comes to freight forwarding and logistics?
Chris McClincy - CIO: Well, I think probably something that's not very unique to technology but really staying focused. Technology is a huge canvas and all organizations have a lot of competing demands on how they want to advance and where they want to be on that particular canvas. It's probably not unique to technology but I think really identifying who you want to be and where you want to really excel with an understanding that you can't be all things to all people, and then really investing in those areas and staying focused so that you can fulfill the obligations or perform certainly to the expectations of the clientele that we're trying to service. That's not really that unique to technology but again really understanding what is it that we're doing, where are we investing, what are the solutions and the capabilities we're trying to drive through technology, and then staying vigilant and focused on those things and not necessarily becoming unnecessarily distracted by the latest technology advancement that might be coming out.
Chris Parker: Yeah, that leads to my next question which was simply, “True or false: tech hype is real.”
Chris McClincy - CIO: Oh, absolutely, yeah. But that's one of the things I love about technology. I mean, so again, it's constantly changing there's nothing static about tech. And Gartner has got this concept called the Hype Cycle and I'm sure many folks who are listening have seen that but it's so true where, I mean, tomorrow we'll get up and we'll check one of our feeds and the next thing that's going to solve all of our problems out there and if only we figured out how to take advantage of it and use it. But that's part of the fun and all of it as well, is really watching those things find their way in our industry. When you look at some things like blockchain and artificial intelligence and of course you go back a couple of years or a couple of months and you read the articles and-
Chris Parker: It was everywhere.
Chris McClincy - CIO: Yeah, and organizations like ours won't be necessary any longer, there will be a button for all that stuff. But then seeing where those things really do add value and can make a difference in the services we sell or the problems or opportunities our customers are pursuing, that is the fun of it, is getting through the hype cycle, really trying to find the value of what these technologies can really do. Because there's a big distinction between, hey, being hyper excited about something and actually value for our industry or for our customers. And that intrinsically again is what certainly compels me and certainly a lot of other people, is to find those value opportunities and then to incorporate those new and emerging technologies into ways to drive value that are unique in the industry or for our customers.
Chris Parker: Yeah. Our organization is very... We're all about driving value and providing the best experience that we can for our customers. On their side how can they prepare or be ready to adopt to new technologies as they come? Or is there particular qualities that they need to have or mindsets in order to have a healthy approach to new technology?
Chris McClincy - CIO: Well, I talked a little bit about this concept called a ground game which is probably a terrible sports analogy for many people that don't watch sports of which I actually don't watch sports these days, but it's really hard to skip the fundamentals. For example everybody's chasing visibility right now and we're looking at IOT and we're looking at machine learning or artificial intelligence and big data to bring a much higher level of fidelity and accuracy to our visibility just in terms of supply chain management. But there's this area of fundamentals around data integrity, operational integrity, that you don't get to bypass that.
Chris McClincy - CIO: And one of the things when I meet with a lot of clients or peers in the industry, one of the things we talk about is it's really continuing to keep your house in order. In your own teams or the service providers you're working with, are you operationally focused? Do you have excellence in those operations? Do you have adequate data quality? Do you have good integration between you and your service providers? Because they have to have those fundamental foundational things in place to be able to start to incorporate things like machine learning, artificial intelligence, whatever the technology du jour component is of the day typically relies upon having a good ground game to take advantage of those. And it's not very often you can skip that. Now, sometimes you can take those emerging technologies and they can help you get your ground game in order or get your foundation in order but layering really exciting technology onto a poor foundation just makes for a poor foundation so you really have to get those things in place.
Chris Parker: Yeah. And I know it can take, oh, I don't know a pandemic to really make you assess how strong your ground game or your foundation is for your company before you start chasing the next best thing or the technology du jour as you put it.
Chris McClincy - CIO: Well, we've seen a lot of that as well where certainly during this time really getting back to the basics but not the basics of five years ago, it's the basic stuff today, which again, these emerging technologies to have a role to play right now today. It's we don't need to wait for those things but it's really orienting those solutions or those capabilities to the step that matters that we can really do right now versus again what you might see in some of that hype out there.
Chris Parker: Yeah, I hear what you mean. There's that term, the new normal, but we've been at this for six months at least by the time of this recording and the new normal is now normal. And there's got to be gaps here and there, everywhere, that technology and new technology can fill in and create just new opportunities for us to do things better or with new considerations in mind.
Chris McClincy - CIO: Yeah, I mean, it's like anything, right? We're in a constant state of evolving and certainly big societal events like the one we're living through are going to have a larger impact on that than others. But this need to consistently evolve and transform is persistent for all organizations and so the balance is, again, continuing to ride out the investments that each organization has made to get value out of those and then continuing to incrementally pull in new capabilities, new concepts and new ideas along the way.
Chris McClincy - CIO:
It's like that old saying, there's never really a finish line, we just hit these milestones. And again we're going to have a new set of considerations in front of us just given what's happening in the world today, but that consistent need to continue to evolve, invest, and adapt and incorporate technology into that isn't anything new, it's just the way that we're going to approach that and the way we're going to do that is going to change a bit.
Chris Parker: Cool, thank you so much. If people want to learn more or get in touch with you or how can they do that?
Chris McClincy - CIO: Certainly, you can find me on LinkedIn. Just go ahead and reach out to me there, that's probably the best way to get a hold of me.
Chris Parker: Cool. Well, thank you so much, Chris. We really appreciate your time and it was fun chatting with you.
Chris McClincy - CIO: I appreciate the opportunity, Chris. Good to see you.
Chris Parker: Thanks for listening to today's episode. If you've got questions or want to learn more about today's topic check out the show notes for more information. And before you go, make sure you're subscribed on whatever podcast app you're using so you won't miss the next episode. To learn more about Expeditors, you can find us on LinkedIn, Facebook, Instagram, and Twitter, or simply visit us at expeditors.com. Take care, and I'll see you next time.
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