How blockchain can drive transportation and logistics forward

04 April 2019

The much-hyped innovation of blockchain has been said to have myriad possibilities, as companies across the industrial spectrum seek to safeguard their supply chains and increase efficiency. A new survey has found that it can drive transportation and logistics forward, bringing rise to several benefits, including addition transparency in its value chain, financial improvements, and better customer alignment.

While blockchain technology’s applications have long been speculated about thanks to the growing prevalence of cryptocurrencies, it is now a very real mechanism used by businesses worldwide to implement powerful solutions to some of commerce’s most pressing problems. Early experimentation with variations of blockchain technology proved most fruitful in the financial sphere, but it has also proven extremely useful in supply chain management and logistics.

A blockchain is a shared digital ledger which can be used to record and store transactions between multiple participants in a network. Changes made to the blockchain record must be approved by participants through an automated process. As a result of the fact information cannot be deleted, only appended, a blockchain provides an evidentiary trail of information back to the point of origin, meaning companies can locate and prevent fraudulent activity in their supply chain, should they leverage the tech adequately.

In September and October 2018, Boston Consulting Group conducted an online survey of global companies in the transport and logistics (T&L) industry in  order to assess their understanding of blockchain and their progress in adopting the technology. Despite the promises of the technology, however, BCG’s survey of executives from more than 100 T&L companies found that most industry participants have not taken a deep look at blockchain’s potential applications.

How blockchain can drive transportation and logistics forward

Commenting on why uptake may still be slow, report co-author Jacqueline Govers, a Partner at BCG in Amsterdam, said, “Many T&L executives regard blockchain technology as at best mysterious or at worst ripe for exploitation. In fact, the underlying concept is fairly straightforward. Simply put, because blockchains create data transparency, they help to establish trust among participants in complex networks... Blockchain can help the [transport and logistics] industry address these pain points by providing an immutable shared data repository, promoting trust among participants, and enabling automation of repetitive processes.”

A wide variety of pain points impede information sharing and create costly inefficiencies for modern T&L firms. In order to encourage more firms to tap into blockchain’s potential, BCG identified nine areas which can be aided by the technology.

Inefficient data and document management is possibly the most costly of these pain points. In the age of big data, leveraging blockchain to make the most of a company’s data could open up major untapped revenue opportunities. At the same time, blockchain can help with regulatory compliance efforts, helping secure supply chains at a time when laws firms can be stung by huge fines when failing to safeguard their data. It also goes without saying, then, that blockchain can help prevent the direct impacts of trade-based money laundering and fraud as well.

Efficiency savings

Further increasing efficiency in the industry, according to BCG, suboptimal equipment utilisation can also be tackled, while blockchain negates the need for a cumbersome letter-of-credit process, thanks to the digitalisation of the supply chain. Non-transparent pricing and booking can also be avoided, meaning it is easier for members of a value chain to get a fairer deal for their efforts, and avoid being exploited. 

BCG also asserted that blockchain’s rapid and efficient mechanisms mean that complex claims and changes in ownership can more rapidly be resolved, avoiding more lengthy back-and-forths between different suppliers. T&L executives can also use blockchain to reduce the cumbersome methods of traceability in their supply chains, though BCG warned that to make this happen, T&L companies must start to establish trust as the foundation of a collaborative blockchain ecosystem. Finally, T&L firms could use blockchain to improve on complex processes of reverse logistics, since a blockchain provides an evidentiary trail of information which can rapidly be used to work back to the point of origin.

Govers concluded, “With some T&L companies taking the first steps toward forming a blockchain ecosystem, other companies must decide whether to participate or adopt a wait-and-see attitude. In our view, the benefits of being among the first to join these collaborative efforts far outweigh any advantages of a cautious approach... As customers increasingly demand higher levels of trust, security, and automation, no T&L company can afford to remain on the side-lines while its competitors seek to resolve the blockchain paradox.”


How data insights helped Network Rail improve the South-East route

11 April 2019

Amey Consulting has leveraged data insights to assist Network Rail with the improvement of its South-Eastern route. Using the Quartz tool, which monitors train movement, Network Rail will now be able to commit to data-enabled interventions to quickly improve underperforming train stations.

With rail services in the UK coming under strain from the demands of modern commuter life, while the infrastructure and service delivery of the nation’s railways has come in for sustained criticism in recent years, a period of regeneration is on the cards at last. Network Rail is the owner and infrastructure manager of most of the railway network in Great Britain, and has subsequently tapped the consulting industry on a regular basis to help find areas of improvement.

The group recently drafted in consultancy BearingPoint to conduct a thorough organisational evaluation and advise Network Rail (High Speed) on attaining a ‘fit for purpose’ organisational standard – for which the consultancy was nominated at the 2019 MCA Awards. Meanwhile, ArupArcadis and Aecom have been contracted to help Colas Rail and Babcock Rail implement a decade-long framework for Network Rail, aimed at supporting the delivery of the next generation of rail systems, with the contracts said to be worth as much as £5 billion

How data insights helped Network Rail improve the South-East route

As Network Rail further aims to improve its performance and customer service offering, another area it has sought help from the consulting sector for is its South-East route. The network of railways connects London with the southern parts of the country, as well as with Europe, making it the busiest in the country, with more than 500 million passenger journeys per year. This crucial expanse of rail was plagued with small minute delays, which were impacting millions of passengers every day, while reducing the efficiency and capacity of the overall network – something Amey Consulting was selected to help solve.

Amey Consulting soon determined that with the sub-threshold delays to services only lasting for 1 or 2 minutes, most were not the subject of detailed root cause analysis, and this made their corrections almost impossible – with dire consequences. Without addressing these delays, passenger satisfaction would fall, while the capacity and efficiency of the network would be reduced, stinging the income of Network Rail even before a host of delay-related fines would hit the company.

In order to help the client gain a better understanding of where, how, when and what these small delays occur, Amey Consulting looked to demonstrate the value of data-led consulting, with a significant reduction in delays within the first month of rolling out changes to key stations. The consultants embedded themselves in Network Rail’s team, helping them learn the key skills needed to support and apply data-driven solutions.

Agile transport

This involved the deployment of the Quartz tool. The system utilises to-the-second train movement data to present the performance of individual stations across the South-East route. It allows users to effortlessly understand station performance with a high level of detail, and use this information to identify losses caused by small-minute delays. The granular data allows for targeted actions to drive efficiency savings and performance improvements. More importantly, it allows users to understand the impact of small process changes on performance. 

Steve Dyke, an Executive Partner at Amey Consulting, said of the project, “We looked to identify the physical root cause on the infrastructure, building a case for change then managing that project implementation and tracking the benefit/value.  In doing so we are working to define a data performance improvement service to the operational and infrastructure owners.”

Just as important for the project as the technology, however, was teaching the Network Rail team how to leverage it after the consultants were gone. The Amey Consulting team worked to develop an agile working culture within Network Rail’s South-East division, helping staff to be confident in using data to improve the journeys of millions of people per year by attacking the problem from the ground up.

Dyke concluded, “This is less about the tools and about the approach to managing performance.  It meant using by-the-second analysis, data science, and then agile development to visualise and identify areas where improvements can be made.  We then worked with NR to change the way they approached the management of the infrastructure changes.  So rather than pass the information down the value chain, any of which could have been missed, we managed the change end-to-end.”

The project was so successful that Amey Consulting was also among those honoured at the recent MCA Awards. The firm scooped the Performance Improvement in the Public Sector prize for its work with Network Rail, at the 2019 ceremony in London.