The digitization of logistics is spreading to supplier performance and qualifications. Panalpina has embarked on a push to record the capabilities of all the links in a supply chain in electronic format – on an online platform.
To that end, the logistics firm has teamed up with Validaide, a tech start-up founded in 2016 to provide the logistics sector and its clientele with supplier qualification and risk assessment. Panalpina is Validaide’s launch customer and has been on the tech firm’s advisory board since its inception.
The push for the initiative came from the pharmaceutical sector with its exacting demands on service provider assessment and validation, said Amit Agarwal, corporate air freight product management at Panalpina. Information on the relevant qualifications of supply chain partners – from airlines and GSAs to ground handling providers and trucking firms – is typically kept on paper or in individual electronic files like Exel spreadsheets. Keeping track of this information and updating it is challenging and time consuming, he noted.
By placing all the relevant information on the Validaide platform, participants in the supply chain who are authorized to see the data can access them at any time. For Panalpina it means that it can qualify suppliers and assess transport routes much faster and assemble the requisite information for an RFP in moment.
The data are provided by supply chain firms – including Panalpina itself – who feed load them onto the platform and keep the information up to date. For the pharmaceuticals sector they have to go through a standard questionnaire comprising almost 160 questions. Most of these are yes-no questions, so providing the information is not very time-consuming, according to Agarwal.
In a second step, Panalpina staff in the area where the supplier is located verify the information. Both steps should take only a couple of hours, Agarwal said, which is a significant improvement over the traditional supplier qualification procedure.
Beyond offering a repository for the supplier data, Validaide has developed an algorithm that performs lane risk assessment based on the input.
“Validaide makes the process of qualifying suppliers and identifying risk along transport routes more efficient, dynamic and transparent,” said Markus Muecke, global head of air freight procurement and product management of Panalpina.
Agarwal said that the risk assessment module allows her company to show pharmaceuticals shippers which risks exist with which carrier and what corrective actions should be taken. “We can give our customers different options,” he added.
Access to the data is controlled by the supplier who provides them. They authorize which parties are allowed to view their qualifications on the platform.
“The community members on the platform – for example airlines, ground handling agents and trucking companies – can showcase their capabilities to existing and potential customers,” said Eelco de Jong, co-founder and managing director of Validaide. “If they choose, they can also give direct access to the customer of a 3PL, for example a pharmaceutical company.”
So far, the response from suppliers has been very positive, as they realize that participation in the platform is a way of showcasing their capabilities and greatly facilitates RFQs, Agarwal said. Several large operators have come on board, he added.
Likewise, shippers have welcomed the concept, he said. “They won’t depend on us or another forwarder to get this data,” he noted.
While the drive to bring more suppliers on board continues, Panalpina and Validaide are looking to spread the concept to other commodities. Management has identified high-value cargo and perishables as the next segments to move to the Validaide platform. According to Agarwal, the establishment of catalogues of questions for those sectors should be done during the second quarter of this year, so suppliers can start feeding in their data in the third quarter.
Beyond these he sees other types of cargo that could be covered this way, such as lithium batteries, or hazardous goods in general.
Meanwhile, Validaide’s management has plans to extend the platform’s reach beyond the air cargo sector.
“Our initial focus is on air freight transportation of pharmaceuticals, perishables and high-value cargo. Additional modalities and categories will be added in the near future,” the company declared on its website.
By Ian Putzger
Correspondent | Toronto