Embracing innovation the right way can accelerate operational efficiencies and delight customers.

Is there still a case for  innovation in the fuel supply chain given the current climate? The short answer is yes, but let’s explore the opportunity and look at the technology landscape, the history of innovation in convenience retail and logistics, and what has become a catalyst for accelerating innovation.

The case for innovation

When a crisis hits, businesses shift their strategy to focus on cash savings and minimizing risks. Yet, history and business strategists will tell you a crisis is a case for innovation. McKinsey & Company recently published findings from their COVID-19 survey stating that now, more than ever, companies need innovation. In fact, they urged companies to take a look at their innovation portfolio and ensure resources are appropriately allocated.

Convenience retailers and wholesalers have been innovating in various ways for a long time. Traditionally, they have done a good job running their stores, managing the  supply chain, or keeping up with daily operations while leveraging innovative technologies where they made sense.

Today, these organizations face many pressures from changing customer demands to keeping labor and other costs down. Most are contemplating how to find cost savings in these challenging times or how to keep overhead low while still trying to grow and exceed customer demands. The answers to these questions could lie in leveraging breakthrough innovations. Embracing technologies like mobile, IoT and artificial intelligence (AI) the right way can accelerate operational efficiencies and delight customers.

Innovation past and present

Before we map a business case for the future of innovation in convenience retail and logistics, let’s look at where we are today and how we got here.

Over the years, there have been many ways innovations entered the market, enabled us to participate in an increasingly digital world, and helped us improve visibility and automation. When it comes to managing fuel volumes, the automated tank gauge (ATG) devices that came about decades ago are still very relevant today. Now, they’re likely connected to the cloud, and we may call them IoT devices, but their basic function hasn’t changed much. ATGs continue to provide valuable data to enable inventory forecasting and make replenishment more accurate and cost effective. From the point-of-sale and electronic safes to cameras and refrigerators, today’s stores have no shortage of potentially cloud-connected systems.

Likewise, when digital dispatch systems first hit the market, they had a big impact, enabling dispatchers to digitally track orders, loads, and deliveries. Over time, GPS and in-truck devices provided even more real-time transparency and communication.

And let’s not forget when paper logbooks were replaced by the electronic logging device (ELD), helping companies easily and accurately manage compliance and keep drivers safe. This industry has gone through many cycles of innovation, but there is still an abundance of opportunity for new ideas and technology to shape the industry. Innovations in the last decade were all about moving to the cloud and mobile. The innovations of this next decade will likely be all about data, analytics, AI, automation and robotics. With 5G on the horizon, we could also see an explosion of IoT devices and data with next-generation connectivity.

A catalyst for accelerating innovation

There typically isn’t one catalyst that accelerates innovation. Often, it’s a combination of events that align the right way and present a clear case for innovation. For instance, it would have been challenging to leverage third-party carriers in the past. Today, however, the proliferation of cloud-based dispatch and fleet management systems coupled with mobile devices allows companies to outsource transportation while retaining transparency. The combination of various technologies essentially enabled organizations to change their business models.

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Outside of technology shifts, we often hear about innovation through the lens of digital transformation. But, what does that really mean? Well, while IT has played an integral part in this industry for many decades, IT departments must now think about a digital first approach to their business. IT is no longer just a technology function that supports the back-office. Today, IT departments are expected to provide customer facing systems on par with most modern technology businesses. This in turn drives them to think innovatively about the value they provide to their customers who, in fact, expect a digital first approach. This digital first approach will likely translate to further proliferation of cloud, mobile, and IoT with everything being interconnected, real time, and powered by AI.

The point is, embracing innovation in the supply chain starts with the business and customer but must include a digital component. To find out if you’re ready to embrace innovation, ask yourself these questions:

  • How have my customers’ expectations changed in recent months or years?
  • Are my customers used to digital experiences in other industries, and am I providing comparable experiences?
  • Has technology evolved to where we can now provide more value to our customers?
  • What disruptive innovations should I care about?
  • Do we have a culture of innovation?
  • Do we really understand digital, or should we look for a partner that does?

Once you’ve answered these questions, you can start making more informed decisions about your approach to breakthrough innovation and the technologies that will help you scale and operate more efficiently. Change like this delivers real results when you focus on the customer, adopt the right technology and work with the right partner to help you along the way.

When it comes to innovation, together really is better. PDI’s commitment to co-innovation runs deep and has accelerated platform development of our leading logistics solutions used around the world by leading petroleum wholesalers, marketers and common carriers.

You can thrive in today’s digital economy. Contact us today, to learn how we can help you transform your business.