Episode 495: End-to-end supply chain innovation with Maersk

Posted on Jun 19, 2024 in Podcasts

This episode of The New Warehouse Podcast broadcasts live from the Maersk Podcast Studio at Manifest. Erez Agmoni, Global Head of Innovation for Logistics and Services (L&S) at Maersk, and Kevin discuss innovation within the supply chain. Known globally for its ocean freight services, Maersk has undergone significant transformation over the last five years to become an end-to-end logistics integrator. Erez discusses Maersk’s journey in reducing supply chain friction, its structured approach to innovation, and the collaborative ecosystem it has built to drive these advancements.

Maersk’s Evolution Over the Last Five Years

Over the past five years, Maersk has transitioned from a company primarily known for ocean freight to an end-to-end logistics integrator. Erez explains this role “is really to support our customers on the journey to improve their supply chains and ensure that they have less friction in moving their goods.” To achieve this, Maersk has expanded its services to include:

• Air freight
• Warehousing
• Trucking
• Customs Brokerage
• Supply chain management

Maersk is working with MIT to develop dynamic routing to improve supply chains and reduce disruptions. Instead of having customers direct the movement of goods, this system finds the best route based on real-time conditions. Traditional methods can cause delays and missed deadlines, but as Erez Agmoni explains, “We are actually trying to help them(customers) find the best route, keep the price reasonable, and make sure that you can hit the transit time again and again. So we need all of this to orchestrate together to make it happen.”

How Supply Chain Innovation Works at Maersk

Innovation at Maersk is structured around three main pillars, ensuring a systematic and repeatable approach. Erez outlines these pillars:

1. Robotics Automation: Enhancing warehouse and trucking operations with robotics and autonomous solutions. “Ensuring that the flow of the goods is being done in a much more optimized way,” says Erez.
2. Digital Innovation: Utilizing AI, machine learning, digital twins, and computer vision to optimize logistics operations. “That’s the buzziest pillar right there,” Erez notes.
3. Product Innovation: Developing new solutions tailored to customer needs, integrating advancements from the first two pillars. Erez explains, “It’s really to create certain elements that our customers can really improve the supply chains.”

Maersk collaborates with a wide range of stakeholders to foster innovation. Key partnerships include:

• Customers: Co-creating and testing solutions in real business environments.
• Academic Institutions: Collaborating with universities like MIT to develop advanced logistics solutions.
• Government: Learning from regulations and promoting collaborative ecosystems.
• Venture Capital and Startups: Leveraging external innovations to enhance Maersk’s capabilities. “Trying to avoid, unless it’s really necessary to build it inside, we’re trying to go outside,” says Erez.

“We’re not trying to just live in a bubble and create things ourselves,” Erez explains, as these partnerships enable Maersk to integrate diverse expertise and stay agile.

Engaging with Startups for Innovative Supply Chain Solutions

Maersk actively engages with startups to implement innovative solutions, focusing on problem-solving capabilities. Erez emphasizes, “Before we evaluate the startup per se, we evaluate if their solution fits the problem we’re trying to solve.” The engagement process includes:

• Evaluating Fit: Ensuring the startup’s solution aligns with Maersk’s priorities.
• Proof of Concept: Testing solutions in live environments to validate their effectiveness.
• Scaling Successful Solutions: Expanding and integrating successful innovations into Maersk’s operations.

Erez encourages startups to be honest about their capabilities because it’s so difficult to regain trust later on. For instance, he mentions, “If you believe you will be able to do it in a year, just say that,” and advises having an open discussion about capabilities and scope.

Key Takeaways on Supply Chain Innovation

• End-to-End Integration: Maersk has evolved to provide comprehensive logistics solutions beyond ocean freight.
• Structured Innovation: Focused on robotics automation, digital innovation, and product innovation to enhance supply chain efficiency.
• Collaborative Ecosystem: Partnerships with universities, governments, and startups to drive innovation.

Purposeful Startup Engagement: Evaluating startups based on problem-solving capabilities and running real-world trials