Air Cargo Management

IBS Software’s Ashok Rajan on digitisation in the air freight industry

Having spent close to 20 years with IBS Software, Ashok has risen through the ranks of the organisation to head one of IBS’ most successful businesses and is a member of the company’s senior leadership team.

A domain and technology specialist, he has played varied roles in the organisation – from heading product design and engineering functions, programme management to marketing and business development. His credentials include conceptualising the first-ever new generation platform for the air freight industry.

Briefly explain your job function at IBS Software.

I run the cargo and logistics solutions business for IBS Software, leading a team with responsibilities spanning across product strategy, product engineering, operations and business development.

Our mission is to bring to the air freight industry the IBS vision of how airlines can transform themselves into modern, digital enterprises. We work with customers who are often grappling with defining what they should focus on as they plan their digital transformation, which tools can help them with the journey, how others in the industry are approaching the challenge, and how to chart a course and break the journey up into manageable chunks.

Tell us a bit about the iCargo system and its purpose.

The iCargo platform can be likened to an ERP [Enterprise Resource Planning] solution for air freight. The platform can run every single process in the commercial operations of an airline or ground handler, from inventory management to selling and operations, all the way to accounting.

This is backed up by a whole host of capabilities including quality control, asset management, optimisation, reporting and business intelligence.

The platform has been designed to allow customers to:

  •  shift from planning to predicting so they can get their pricing strategy right and differentiate their offerings;
  •  enhance the sales process by improving responsiveness, customer experience and extending reach;
  • improve productivity, service quality and flexibility;
  • and automate warehouse processes and allow greater visibility into the supply chain.
NCA Nippon Cargo 747-8F K65719

The platform, built on leading-edge technology, is offered in a SaaS [Software as a service] model – available on public and private cloud platforms.

The strength of our offering, above and beyond the feature function set, is our consistent focus on capability and delivering platform improvements for the customer. This is a balanced investment across new capabilities, technology upgrades and compliance-related updates.

We have separate streams of innovation where IBS and customers collaborate to co-create business solutions using new technology options; for example using sensors to improve the efficiency of warehouse operations, computer vision for tracking of cargo, and so on.

An integrated technology solution connecting all the critical business functions of cargo movement is vital. How does the software adapt to this?

One of the biggest barriers to digital transformation in the air freight industry is that information is in isolated islands. For a sector that is all about the movement of goods and information across many players, this is a significant challenge.

One of the fundamental principles of the iCargo platform is providing customers with stand-alone components that have been developed to allow systems across enterprise boundaries to collaborate. Our integration and API framework allows other

systems in the ecosystem to interface through a set of configurable integration protocols. That means we can optimise delivery against commercial contracts, including sharing capacity and performing cross system bookings.

Airlines can use iCargo to seamlessly engage ground handlers and provide a transparent view of the actions being performed on their shipments.

Take us through the implementation process for the iCargo system; do you see any challenges?

An iCargo implementation is not a matter of replacing one system with another, but a complete business transformation journey. There is no one-size-fits-all model and our rollout specialists work with customers to create a bespoke solution that best suits their needs.

Typically, the rollout approach is determined by factors such as the functional responsibility mix, maintainability of other systems, availability of expertise in third party systems, a customer’s risk appetite, the nature of their business operations and geographic spread.

Successful rollout hinges on a set of critical success factors, such as having clear priorities, avoiding the temptation to tweak systems to fit to existing processes, effective change management and training, expectation management and over-investment in the critical care period.

Korean Airlines KAL Dual Delivery 747-8I & 777-300ER K65568-01

Digitisation is slowly moving into the air freight sector; how important is this transformation?

The airline industry – particularly the air freight sector – is late to the digital party. But the pace has picked up significantly in the last few years, thanks to a drive from business heads themselves.

As I see it, the industry will transition to a complete digital enterprise in two major stages. Firstly, organisations will become “Efficient Enterprises”. The digitisation of documents and processes will help weed out the slack in work procedures, removing overheads, improving quality of data and decision making, make processes agile and making seamless information exchange.

Secondly, organisations will use technology to open new horizons and start to disrupt existing business models – for example, intermediaries such as forwarders seeing their roles redefined, and a blurring of lines between traditional carriers and integrators.

The businesses that will ease into this new world order will become the “Digital Air Freight Enterprise.” Enterprises today see very clearly the risk of missing the bus on either. Lack of action on the first will increase operational costs and put businesses at risk of losing customers while action on the second raises more of an existential question.

In your view, how can cost savings be achieved by implementing these new cargo management systems?

The influence of cargo management systems on the bottom line is no longer limited to obvious reductions in the cost of IT operations owing to better, more efficient technology. These systems now directly impact business processes; for example, creating a more efficient workforce as automation makes repetitive and script-based tasks redundant.

Intermediaries that do not add value redundant are made, reducing the average cost per shipment through better SLA [service-level agreement], adherence and efficient disruption management, and better use and recovery of capital deployed through efficient cash flows.

While the actual scale of such savings is subjective, carriers have reported savings of up to 30 per cent on specific business processes. The cost of not getting on the digital bandwagon is becoming increasingly expensive.

Players such as Lufthansa are now putting explicit additional charges on its customers and partners for not going digital. We expect this will be a growing trend.

What can the air cargo industry expect from IBS Software in the next 12 months?

These are exciting times for IBS. We are focused on growing our reach with new customers and segments, as well as deepening our engagement with existing customers. We will broaden our customer base in terms of business models, new geographies and new niche ground handlers.

Our investments are firmly directed at helping the air freight industry in its journey to digital transformation, and this is what is most exciting for us.

In close collaboration with our customers, we are bringing new innovations to the market in nine specific business areas that are focused on one of two things: either shortcomings and inefficiencies that are hurting the business, or new business models, including closer collaboration across the supply chain – driving greater intelligence in specific business processes through the use of AI and machine learning tools.

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