Courtesy of Bayer
- Large companies such as Bayer are seeking more real-time visibility for their global supply.
- With FourKites' AI-powered tracking systems, Bayer improved its ocean-shipment prediction quality by 48%.
- This article is part of "The Future of Supply-Chain Management," a series on companies' manufacturing and distribution strategies.
When the Francis Scott Key Bridge collapsed in Baltimore earlier this year, Bayer quickly received an alert that 168 of its shipments would be affected by the disruption in the port.
In March 2020, the German pharmaceutical and agricultural producer began working with FourKites, a supply-chain-intelligence platform that tracks shipments and provides real-time visibility for when goods will be delivered to ports, warehouses, manufacturing facilities, and stores.
As the COVID-19 pandemic unfolded and upended the international supply chain, the benefits of Bayer's partnership with FourKites became evident.
"Everything is about expectations," Johnny Ivanyi, the global head of logistics for Bayer Crop Science, told Business Insider. "Even if we don't deliver on time, your customer can say, 'At least I got the information to make my decision.'"
Bayer Crop Science uses FourKites for shipments across more than 65 countries, with FourKites tracking the majority of Bayer's containers as they move from port to port. FourKites can also track raw materials as they move along oceans, railways, roads, and air, from fields to ports to trucks and then from manufacturing facilities and warehouses to final delivery on a farm.
"It is a lot of complexity," Ivanyi said.
This information helps Bayer establish "one source of truth," Ivanyi said, in terms of the visibility of raw materials such as seeds and soybeans that need to be delivered at the right time to ensure a successful harvest.
How AI-powered tracking systems can boost customer satisfaction
FourKites taps into Bayer's transportation-management system, data that shows which goods are assigned to various carriers along the supply chain. By using machine-learning and artificial-intelligence algorithms, Bayer has seen an improvement in prediction quality of about 48% throughout an ocean journey, FourKites said.
More recently, FourKites has also used generative AI to allow customers such as Bayer to ask AI chatbots questions about their logistics and what disruptions like the Baltimore bridge collapse may mean for them. The bots can even make recommendations on how to respond.
Priya Rajagopalan, the president of product, technology, and operations at FourKites, said the company launched more than eight years ago to give shipping visibility to large shippers, similar to how customers can easily track their orders via Amazon.
FourKites tracks more than 3 million shipments daily across roads, rails, the ocean, and air, reaching over 200 countries and territories and giving companies like Walmart, Coca-Cola, and Kraft Heinz better visibility into when the goods they produce will be delivered to customers.
Monitoring complex ocean shipments to avoid supply-chain disruptions
The supply-chain disruptions from the pandemic led to great interest from large food and beverage companies to more closely track shipments, especially those moving across the ocean, which hadn't previously been as big of a focus.
"The scale of the disruption was so large that just the fact that nobody is monitoring it and they have no tech around it became such a point of vulnerability," Rajagopalan said. "I think almost every chief supply-chain officer received the mandate that we cannot have these sorts of blind spots and areas of vulnerability."
Initially, FourKites focused on providing real-time visibility for shipments on trucks, a highly fragmented system with over 3 million trucks handled by over half a million carriers on US roads alone.
The seas have seen more high-profile disruptions in recent years, including a container ship getting stuck in the Suez Canal in 2021 and the ongoing Yemen Houthi rebel attacks on ships in the Red Sea. These challenges have led more large multinational conglomerates to work with FourKites to predict more accurately when their shipments will arrive in ports. This information is of particular interest to industries such as farming and fashion, both reliant on specific windows of seasonality to achieve maximum sales success.
FourKites' machine-learning algorithms have helped Bayer predict the time of arrival of ocean shipments within two days over 90% of the time.
These insights can help influence decisions along the full supply-chain journey. For example, think of a storm brewing outside Japan that's disrupting shipments of raw agricultural materials meant for delivery to Los Angeles.
"I need to think a couple steps ahead," Ivanyi said.
Bayer would get an alert from FourKites, which would then help influence a few key decisions. Knowing that a shipment is delayed across the ocean, Bayer may need to plan for congestion at the port. Now, a delivery that was intended for the first week of June won't come until a week later. Knowing this, Bayer could have its manufacturing plant in Iowa readjust its production-line planning to account for the delayed deliveries, instead focusing on making products with the goods it has on hand from other vendors.
This tracking system also allows Bayer sales representatives to know when the seeds will be delivered to the farmer in Illinois. Previously, that representative would need to talk to someone in customer service, who would then call logistics and then call the carrier to get intel on disruptions. Now, all that information is available virtually.
"Every day, you are feeding into this kind of intelligence that I think is getting better and better," Ivanyi said.