Inside the skunkworks of the Fortune 1000, data scientists are using artificial intelligence and location intelligence to change the very nature of business. In the decade ahead, these two technologies will transform the way businesses devise strategy, analyse competitors, and engage customers.

Artificial intelligence (AI), perhaps the most-discussed tech innovation in recent years, shows nearly boundless potential, yet stokes trepidation among some business executives. Best viewed as a basket of capabilities ranging from pattern recognition to behavioural interaction to prediction, AI augments a company’s ability to spot trends and make quick, informed decisions.

Location intelligence brings context to AI’s findings—grounding data in time and place. Location intelligence shifts AI from the realm of science into the practical world of business strategy. In this NextTech, we’ll investigate how companies are using AI and LI to assess long-term investments and manage customer expectations in real time.

(Explore this e-book for a closer look at AI’s business use cases.)

Imagine a dashboard that tracks drone deliveries instead of people. That level of customer interaction is already upon us, and savvy executives are using it for business advantage. As customer interactions change, the technology to plan and manage those interactions is evolving too, providing the insight and location intelligence needed to make profitable decisions.

This article was originally published in the global edition of WhereNext.

Some of the most famous planes in the weather world are hurricane hunters, piloted by steely nerved aviators who fly into storms to measure what is imperceptible to people on the ground. Since the first storm-chasing pilot plunged into a hurricane on a dare in 1943, the practice has become a standard tool of weather forecasting.

Today, a new breed of flier—with a little less derring-do but an equally important mission—is helping people see what was previously unseen.

Struggling for Basic Awareness

Human ingenuity can be a poor match for nature’s strength. When hurricanes, wildfires, or tornadoes strike, the human instinct is to hunker down or flee. In the aftermath, even our most adaptable tools can fail. All-terrain equipment, amphibious vehicles—these often can’t enter disaster zones when obstacles abound or dangerous conditions persist.

That can leave residents, first responders, and government officials struggling to gain a basic awareness of what has happened and what to do next. Such blind spots slow operations at a time when delays can be measured in lives lost.

Eager to overcome those limitations, a consortium of insurance companies is working to change the nature of recovery. They formed the National Insurance Crime Bureau’s Geospatial Intelligence Center (GIC) on the premise that aircraft can help rapidly identify damage from large-scale weather events that would otherwise take a long time to discover—essentially uncovering the unseen.

If early results are any indication, this new brand of visibility could soon be as routine as a pilot cutting through the eye of a hurricane.

Operational Visibility from the Sky

The work of the GIC is possible through a fleet of small airplanes equipped with high-resolution cameras, as well as on-demand computing power and location intelligence technology.

The center’s mission is to spot changes on the ground. It sets a baseline by shooting ultra-high-definition aerial photography across the country on an annual schedule. Then, when major weather events hit, the pilots take to the air as soon as conditions allow and begin shooting images of the damage.

“One of the powerful uses of this tool is that with the aerial imagery, we can increase our engagement with our customers before our claim professionals have physically deployed into an impacted area,” says Don Florek, vice president of catastrophe management at Travellers, the sixth-largest insurance company in the United States.

Imagery alone doesn’t give Travellers and its peers a head start on customer care; it yields data but not necessarily context. To see what people on the ground can’t see, Travellers imports the aerial photographs into a geographic information system (GIS) and melds the raw imagery with road networks, clients’ addresses, and weather data.

Since most weather events cover many square miles, company analysts created an artificial intelligence model that speeds up the identification process. Trained on thousands of images and powered by machine learning, the program quickly flags locations where clients have been affected.

Florek describes the location intelligence that Travellers sees with the resulting GIS-based smart maps. “We aggregate millions of data points from weather services to create event overlays, allowing us to visualize the data.  The sophisticated use of layered geospatial insights enhances our overall operational intelligence,” he explains.

That data could include wind speeds, rainfall—even the diameter of hail that fell in a particular location. Operational awareness of this kind gives Travellers and its clients two advantages: vision and speed.

Reaching Out without Prompt

Some Travellers clients initiate claims soon after an adverse event. Others can’t access their neighbourhoods to see what has happened to their homes. In those cases, Travellers can now use its view of the unseen to initiate contact. This happened in the days after the Camp Fire decimated Paradise, California, in 2018.

“We used the aerial imagery and the geospatial applications to assess property damage throughout the evacuated areas, allowing us to identify homes that had been completely destroyed or even partially damaged,” Florek says. The imagery “allowed us the information to begin reaching out to those customers to identify if they were safe [and] to begin the claim process and begin to understand how best we could help them. That’s completely different than how we would’ve approached something several years ago, without having that same level of insight,” he notes.

First responders and local officials now enjoy the same increased visibility, since GIC provides imagery to them as well.

“That bird’s-eye view of the affected area gives first responders important clues to where they should deploy resources at a time when speed is critical,” says Ryan Bank, managing director of the GIC.

Focusing on Customer Satisfaction

For now at least, the twin-engine pilots and their high-resolution cameras haven’t replaced traditional methods of disaster assessment; insurance adjusters still need to inspect damage in person to complete most appraisals. But the imagery, combined with location intelligence and AI, bolsters situational awareness immediately after tumultuous events, when speed of recovery is critical.

It is also proving valuable in other areas of the insurance life cycle. Risk analysts, for instance, have begun using location intelligence from imagery to fine-tune models of risk. With GIS-based analysis, they can more accurately predict threats to specific locations. Fraud examiners are interested in aerial imagery, too, since it creates an additional check on homeowners who falsely claim that a weather event damaged their property.

In claims handling, the ability to see what was previously unseen has already helped Travellers increase its customer responsiveness. For example, in 2018, Travellers says it resolved 94 percent of claims within 30 days—during a year crowded with major disasters. That type of efficiency is key in the insurance industry, where the second most common client complaint is that their payments were delayed.

For Florek and the team at Travellers, having eyes in the sky and location intelligence on the ground has helped turn understanding into action.

“The layered geospatial insights really provide us with a whole different level of operational insight to understand the event, the impact for our customers, and how best to deploy the right people to the right place as quickly as possible,” Florek says.

This article was originally published in the global edition of WhereNext.

Supply chain transparency has become a form of currency for both businesses and consumers. Detailed knowledge about how a product moves from origin to destination is now more than just a tool to monitor product safety and manage disruptions like storms or political upheaval. Increasingly, it also answers calls from younger consumers for sustainably and ethically sourced products.

To deliver this new level of supply chain visibility, responsive brands are turning to location intelligence.

Upping the Ante on Transparency

Multinational retailer H&M recently raised the profile of this trend. The Fortune 500 purveyor of fast fashion announced it would begin an ambitious program of garment transparency, allowing consumers in 47 online markets to find information on each item of clothing. Details include the name and location of the factory where it was made, the size of its labour force, and the materials used to craft the item. Brick-and-mortar customers can access the same information by scanning a price tag using the company’s app.

Accurately linking such data to far-flung suppliers has typically been a heavy lift for companies—one of the reasons business leaders have come to rely on a technology called GIS (a geographic information system), which delivers location intelligence by illustrating supply chain networks on a map.

H&M professes the first global fashion retailer to institute product transparency on this scale. The initiative falls in line with other moves the company is making towards sustainability, including its goal to use only sustainably sourced or recycled materials by 2030.

These measures have netted H&M favourable coverage, landing it in the fourth spot on Fashion Revolution’s annual Fashion Transparency Index last year. The Fashion Law, a blog that covers business and legal issues in the fashion industry, named the company even more transparent than Everlane, the direct-to-consumer clothing brand popular with Millennials that has made transparency a pillar of its business model.

Map-Based Visibility

Companies looking to demonstrate a commitment to sustainability and ethical partners often find location intelligence invaluable in making supply chain practices safe, secure, and transparent. This transformation has already begun in the usually opaque diamond business, where DeBeers, IBM, and Signet Jewelers have partnered to use blockchain-based technology to identify the mines their merchants patronize. By pegging each transaction to an exact location—information that is then securely shared among parties via blockchain—GIS can enable such efforts to reach new levels of reliability and specificity.

In today’s global market, the challenge of such an undertaking is formidable. In a 2017 survey by logistics provider Geodis, just 6 percent of respondents reported having full visibility over their supply chains, even as that issue has become their third-highest priority. Many manufacturers simply don’t know what is happening in the networks they rely on to cultivate and transport their goods and supplies. That failure of transparency can lead to safety issues, cultural missteps, and PR crises.

Companies that do manage to create visibility often do so by adopting a “single pane of glass” perspective on supply chain operations and data, one made possible by GIS. The technology delivers location intelligence by collating multiple layers of real-time or historical information onto a smart map, giving operators situational awareness and the ability to respond quickly.

“Essentially, on one screen, they see a holistic view of their organization—its facilities, moving assets, personnel, and vendors and partners in the supply chain,” said Esri’s Steve Marshburn in an interview about corporate security. This capability enables businesses to honour their commitments to sustainability and avoid reputational damage.

A New, Sustainability-Minded Consumer

Consumers, especially younger generations like Millennials, are demonstrating their commitment to sustainability through their wallets. A recent Nielsen report found that products with legitimate claims to sustainable practices showed better growth than competitors—a distinction that can lead to better retail shelf placement. More than other consumers, online buyers want to know the provenance of their purchases and will reward transparency with greater brand loyalty.

“Today’s global consumer—empowered by information and high on expectations—has fuelled a right-now economy that forces businesses and supply chains to accelerate both their decision-making and their quality delivery of products and services,” says Cindy Elliott, head of Esri’s commercial industry marketing team.

As this trend intensifies, more companies will follow industry leaders in enlisting location intelligence to create greater supply chain transparency.

This article was originally published in the global edition of WhereNext.

Diamonds have lost some of their shine in recent years due to association with African war zones and human rights abuses. Some consumers have made it clear they won’t buy “blood diamonds” or “conflict diamonds”—those known to fund wars or support child labour. In response to consumer demand, jewellery companies are investigating ways to document the origin of their products.

The New York Times article, “You Know Your Diamond’s Cut and Carat. But Does It Have Ethical Origins?” notes that companies are monitoring product origins in greater detail using the transaction-tracking tool blockchain.

The effort could gain additional support from location intelligence delivered by a modern geographic information system (GIS). In fact, some signs point to a merger of GIS and blockchain technologies into geoblockchain—a potential innovation in how companies respond to customer and regulatory requirements.

Beyond Country of Origin

Until recently, major jewellery retailers such as Tiffany and DeBeers could only identify a gem’s country of origin. Neither the businesses nor the mines they sourced from had the technology to trace every diamond from processor to showroom. Now IBM and DeBeers have partnered with Signet Jewellers to create a blockchain-based tracking program, according to the Times article. Through that system, called Tracr, jewelers will be able to identify which mines their merchants patronize. That information will enable them to be more discerning in their purchases, rather than rejecting outright any diamonds from certain countries.

Companies in adjacent industries are also using location intelligence technologies for transparency. Nespresso, known for its single-serving coffee products, has painstakingly documented the origins of its coffee. Leaders of the company’s sustainability program use GIS to monitor the health and farming practices of 75,000 farms around the world. With location intelligence produced by GIS, Nespresso helps its farmers cultivate the most flavorful beans and get them to market faster, while updating customers on those efforts.

According to the WhereNext article, “The Business Value of Sustainability,” the program has paid dividends:

Using sustainability practices and location technology to support its suppliers, Nespresso has increased its brand value as a responsible producer, maintaining customer loyalty and profitability.

Emergence of the Geoblockchain

Across industries—from diamonds to coffee—companies are striving for supply chain visibility, prompting industry leaders to explore new monitoring and reporting techniques.

Blockchain’s forte as a more secure model of transaction logging will be enhanced by GIS technology’s strength as a location-aware, cloud-based system of record. Blockchain expert Constantinos Papantoniou sees the marriage of location intelligence and blockchain as a more efficient method of monitoring supply chains:

As consumer expectations shape the global economy, companies will need to perform more detailed supply chain tracking. Forward-leaning executives will be equipped to answer the call for transparency by merging blockchain with location intelligence.

This article was originally published in the global edition of WhereNext.

Major demographic shifts will alter the makeup and preferences of consumers worldwide in years to come, and companies that maintain global supply chains must take note.

In a recent CSCMP’s Supply Chain Quarterly article, two Penn State University professors and a VP of supply chain operations at the Hershey Company examined three significant demographic changes that they expect to occur, and the effects those changes could have on the supply chain.

Getting ahead of a Global Shift

Global shifts in population will affect where and how people live and work, according to the article’s authors, who expect the changes to be measured across three primary dimensions:

• Magnitude—The rate of global population growth will decline, with Africa and Asia the biggest contributors to growth
• Structure—Longer lifespans will dominate, religious makeups will shift, and middle-class growth will accelerate in Asia
• Migration—Internationally, the movement of migrants will reverse—flowing to Europe instead of from it—while on the local scale, migration to urban areas will increase

The changes will affect both ends of the supply chain and challenge executives to rethink not only where customer demand will be, but also where companies should locate production to meet that demand.

As manufacturing and logistics expert Cindy Elliott observed in a recent WhereNext article, “Execs must grasp not only where consumers are now, but where they are going—predicting business opportunities based on emerging trends in precision demographics.”

Leading companies are paying attention to these trends in consumer movement and preferences, and using location intelligence to proactively adjust their supply chains.

Analysing Local and Global Demographics

In the Supply Chain Quarterly article, Hershey Company VP of supply chain operations Jason Reiman noted that his company is making changes throughout the supply chain in anticipation. As part of its analysis, Hershey first examined where it expects future customers to live, then planned production locations close to the areas of increasing demand. Next, it identified a suitable workforce in those new areas.

For businesses conducting similar long-term planning, location intelligence can be a key asset. As Elliott explained:

The engine for that analysis is often a geographic information system. GIS technology ties digital information to a place, allowing retailers to examine competitor locations, insurance companies to assess claims across neighbourhoods, and logistics providers to plan efficient delivery routes. Global manufacturers use the demographic capabilities of GIS to gauge where customers may move in coming years.

Building a Complete Supply Chain Strategy

Globally, growth was slowing in Hershey’s traditional markets in the United States, Europe, Japan, and Australia, the authors note. The company saw an emerging city-dwelling middle class in Asia and the Middle East, a cohort predicted to grow over the next 15 to 20 years.

These were potential new consumers with disposable income to spend on Hershey’s confectionary products. To get close to that demand—and key resources such as cocoa liquor and sugar—the company established a new manufacturing plant in Malaysia.

As the authors explain, Hershey then examined local demographics near the city of Johor, Malaysia. They identified a potential workforce that was young, educated, and productive. Delving deeper into the psychographics of the new workforce helped the company plan a facility layout and operating procedures that complemented local training needs, languages, and religious preferences.

The location intelligence that comes from demographic analysis was once the exclusive province of marketing executives seeking to craft messages for certain groups of customers. As Hershey’s tale illustrates, such insight now plays a role throughout the supply chain.

On the demand side, companies use GIS-powered location intelligence to understand changing consumer needs and adjust their presence in various markets. Those adjustments ripple through to the supply side, influencing where the company sites production facilities. They also help facility planners and operators understand and accommodate the local workforce.

The demographic shifts that Hershey and other companies foresee aren’t short-term changes. They will have significant and lasting effects on the supply chain. Executives who enlist location intelligence to plan for those changes now will likely find themselves with the right supply chain balance down the road.

When Amazon announced in September 2017 that it was looking for a second headquarters location, the news set off a 13-month competition that had 238 cities outbidding each other to woo the internet retail giant with billions in tax and financial incentives. Some observers watched with chagrin. They knew a different way to grow local economies.

The eventual winners—Long Island City, New York, and Arlington, Virginia (along with Nashville, which will host a new operations centre)—awarded Amazon more than $2.4 billion in local and state tax breaks.

The passion with which many cities pursued the expected prize of 50,000 new jobs showed in  Columbus, Ohio’s offer of $2.8 billion in direct tax incentives—more than the three winning cities combined. Detroit and Michigan upped the ante to $4 billion and New Jersey was willing to provide $7 billion in city and state tax credits.

But an analysis by The Atlantic highlighted the fact that companies with big tax incentives don’t always meet their goals and may still lure cities into bidding wars every few years. The Brookings Institution also found that many incentive packages do not require the sought-after company to invest heavily in job training for local residents or in improving their living conditions.

Pursuing Titans or Nurturing Homegrown Businesses

For cities that can’t—or don’t want to—compete for market giants, there’s another proven option: economic gardening.

“Chasing the big corporation is expensive, it’s time-consuming, and the likelihood of being awarded that business to your particular community is pretty low,” says John Gendron, who manages the Kansas Economic Gardening program within the Kansas Center for Entrepreneurship, known as NetWork Kansas.

Though rarely in the national spotlight, economic gardening is the lower-cost alternative, free from tax breaks or complicated agreements with multinational corporations that could still pull up stakes if a better deal emerges elsewhere.

The economic development agencies that practice it focus on helping moderate-sized local businesses grow. They do so through research, business consulting, and a technology called a geographic information system (GIS). For companies small and large, GIS reveals new market opportunities, uncovers subtle consumer trends, and tracks demographic shifts in locations across the country and around the world. Economic gardening advisors suggest how companies can turn that deep analysis into profitable action.

The result is locally cultivated economic growth.

Economic Gardening Grows Local Businesses

In Florida, for example, GrowFL used economic gardening to help generate nearly 11,000 net new jobs between 2009 and 2015. Those companies added more than $81 million in net state and local tax revenues, meaning Florida received a return of more than $9 for every dollar invested in economic gardening.

NetWork Kansas’s Gendron, who has worked in economic gardening for nine years, says that this less splashy option often can “spike revenues and create jobs at a lower cost while supporting the businesses right in your backyard.”

Economic gardening can’t promise 50,000 jobs from one company, as Amazon did. But 235 cities spent more than a year and hundreds of thousands of dollars to pitch the internet powerhouse and ended with little to show. Meanwhile the Kansas Economic Gardening Network only needs to spend 45 days and invest services worth $4,500 to help a local company add an average of 12 new jobs and $1.5 million in new sales. Over time, that process can create meaningful job growth without sacrificing local tax revenue.

A Young Company Grows up through Location Intelligence

Rodney Greenup had developed a successful business in Louisiana by providing facilities management and construction services to the oil and gas industry, which requires security clearance for all contractors and subcontractors.

Like most successful entrepreneurs, Greenup relied on great instincts to get his business started and stabilized. He also wanted to keep growing. He thought the simplest way would be to market the services of Greenup Industries in as many states as he could. He was ready to open offices elsewhere and initiate a wide-ranging marketing campaign when he came across the Louisiana Economic Development (LED) agency and its programs. During the approximately 45-day analysis and consultation program with LED, Greenup learned a lot that surprised him.

The agency delivered a slew of economic gardening services, including location intelligence on GreenUp’s customers, competitors, and markets. That GIS-powered insight is often the most important tool in business growth. In simplified terms, GIS is a form of business intelligence that integrates demographic, customer, and economic data into digital maps. Those maps often bring to light hidden or little understood relationships between a company and its current or potential customers.

LED’s research, business consultation, and GIS-based maps led Greenup in new directions.

“Going in, we initially thought we would try to get every client that we could possibly encounter,” Greenup says. “But economic gardening really focused our attention and showed us which potential clients were predicting the largest amount of growth and the biggest spend on their facilities for the next three years.”

Economic Gardening Took Root after Layoffs

Chris Gibbons, CEO of the National Center for Economic Gardening, is credited with helping to originate the idea of economic gardening when he was director of business and industry affairs for the city of Littleton, Colorado, in the 1980s. The idea stemmed from the need to replace approximately 7,000 jobs lost when Littleton’s major employer, a defence contractor, laid off employees into a local economy that could not absorb them.

The methods Gibbons helped develop to stimulate growth set a pattern of similar successes across the nation. During the 20-year period that followed the massive layoffs, Littleton doubled jobs from 15,000 to 30,000 and more than tripled sales tax revenue from $6 million to $21 million—all without recruiting any outside companies, offering tax incentives, or experiencing a large population increase.

Gibbons says GIS-driven insight on potential customers, competitors, and markets allows a typical small business to sharpen its strategy and increase its growth rate from 3–5 percent to 15–35 percent.

Local Businesses Generate High Percentage of New Jobs

Nationally, the typical business that is a candidate for economic gardening has from 10 to 100 employees and sales of $1 million to $50 million. (Ranges vary in urban and rural areas.)

These are businesses that no longer face a day-to-day struggle to survive and whose owners want to keep expanding but don’t know the best way to market beyond their own location. Often called second-stage businesses, they also happen to generate a disproportionately high percentage of new jobs.

Stage-two businesses may have represented only 17 percent of all US businesses from 2005 to 2015, but they created more than 35 percent of the jobs and sales, according to the Edward Lowe Foundation, which supports the entrepreneurship of second-stage companies.

Communities in 25 states from California to New York and from Minnesota to Texas have found economic gardening a successful way to grow locally owned and operated businesses. Yet while it’s seen as a cost-effective way of helping homegrown companies expand, it’s often a supplement, not a replacement, for other approaches.

LED, for example, has adopted a multipronged strategy that looks for opportunities at both ends of the business spectrum. The agency works diligently to attract large corporations to the state and retain its current businesses, and it works just as intensely to accelerate the growth of local companies through economic gardening.

For Greenup Industries and others that have gone through the LED program, results have been impressive. Louisiana companies participating in LED’s economic gardening program have collectively added nearly 2,000 net new jobs and increased their gross revenue by $338 million. LED, like GrowFL, calculates a return of more than $9 for every $1 invested in the effort.

“Typically, when we grow what we have, a number of things take place,” says John Matthews, senior director of small business services for LED. “One, the businesses are here already, so they more than likely are here to stay. Two, they understand the culture of Louisiana. And, three, they’re more readily supportive of the community and its quality of life.”

Saving Marketing Costs by Focusing on Core Services and Concentrated Areas

Through GIS technology, economic gardening teams have access to databases that most stage-two business owners don’t know exist. That data can be layered onto smart maps to reveal economic and consumer patterns. For Greenup Industries, the economic gardening team used market research and GIS technology to illustrate some surprising facts.

Not only hadn’t Greenup realized his core business contained services that would be transferrable to the automotive, food services, and pharmaceutical industries, but also that those same businesses were growing at a faster rate than his oil and gas clients.

Moreover, by using location intelligence to find clusters of potential new clients within those overlooked industries, LED was able to show that he had many more opportunities in the Gulf Coast states of Louisiana, Texas, Mississippi, Alabama, and Florida than he had imagined. It caused Greenup to rethink his strategy of opening offices in far-flung locales.

“You have to listen to the data,” Greenup says. “Economic gardening really clarified a lot of things for me… I really thought I had a good plan for where I was going, but what they did was make me focus and realize my other plans would be distractions and an inefficient use of time and money.”

Variety of Crops Arise from Economic Gardening

The array of businesses helped by economic gardening stretches over many market sectors and includes both B2B and B2C companies.

• In Louisiana, LED showed a company that manages the vegetation affecting powerlines how to expand significantly, and it also helped map an expansion for a software company that developed an app that restaurants can use for delivering to-go orders.
• The National Center for Economic Gardening has helped many companies expand nationally while keeping their local roots. One example: A Michigan pie company learned to increase sales through GIS-powered location intelligence that showed where Michiganders had migrated, where customers with similar tastes might live, and even where Michigan college sports fans tended to watch games in West Florida sports bars.

All are reminders that job creation and revenue growth through smaller businesses can add up over time and even begin to compare favourably with efforts to land a giant corporation. And some second-stage companies nourished by economic gardening will become tomorrow’s household names.

Having grown larger through the crucial location intelligence that economic development agencies provided, these companies may be more likely to stay rooted in their hometowns.

“We need to nurture second-stage companies,” says Matthews of Louisiana Economic Development. “Because the data suggests they are the companies that will create jobs today and in the future.”

In a 2018 survey of global executives, Deloitte found that 65 percent of US organizations plan to invest more than $1 million in blockchain technology in 2019. For business leaders surprised by that statistic, this WhereNext Think Tank offers useful insight on this emerging technology.

Following Think Tank discussions on emerging trends in corporate security, IoT and big data, and retail, Esri’s Brian Cross sits down with blockchain expert Constantinos Papantoniou to learn:

• How blockchain technology works
• Which industries are driving the early business cases
• What a Geoblockchain is and how companies can benefit from it

Brian Cross: We’ve talked in this Think Tank series about a variety of emerging IT trends and what they mean to the business community. Today I want to discuss something called Geoblockchain. To do that, I think we need to start by explaining blockchain technology.

Constantinos Papantoniou: At its most basic level, blockchain is a new way of communicating and storing information. Instead of recording it in one place, like a traditional database does, blockchain technology records data across a distributed ledger. In the case of a private blockchain, the ledger might involve several computers run by business partners. In the case of a public blockchain, it can comprise several thousand computers.

Every transaction that occurs among those parties is validated by and recorded on each computer, or node in the blockchain. That transaction becomes a new block, and the blocks are organized chronologically to form a blockchain.

Storing data redundantly across many computers makes it more accessible and transparent to all participants, and also much harder to alter or hack.

Bitcoin: Good Test Case, Bad Marketing

Cross: Business executives are likely familiar with blockchain because of its role in Bitcoin and other cryptocurrencies. Can you talk about the connection?

Papantoniou: Bitcoin and other cryptocurrencies have helped and hurt blockchain technology. On the one hand, crypto is a powerful test case—it has proven that distributed ledger technology works. On the other hand, it has led many people, including some business leaders, to believe that blockchain is only useful for trading speculative currency. That’s definitely not true. We’re starting to see strong use cases for blockchain in business settings.

The Business Case for Blockchain

Cross: How does blockchain improve on existing technology, and what are the business implications of a decentralized ledger?

Papantoniou: A decentralized ledger removes the middleman from the equation. That makes transactions faster and provides everyone on the blockchain one version of the truth. It’s also a purely digital technology, so it eliminates the inefficiencies and inaccuracies of paper-based transactions.

Cross: What might some of those transactions be?

Papantoniou: Blockchain can be used to record the sale of personal property—for instance, a quantity of cryptocurrency exchanged between two parties. It can also record the details of a land transfer, with two citizens exchanging the property and the assessor’s office, tax department, and public records office recording it.

In the supply chain, companies might use a distributed ledger to record and track the movement of goods. That could mean tracking where and how a shipment of fresh fruit changes hands during its journey to the supermarket.

Adding Location to the Ledger

Cross: That brings us to the idea of a Geoblockchain. How is that different from a typical blockchain?

Papantoniou: The primary technology is the same, but the data recorded on the Geoblockchain is more detailed. Companies can interrogate it more extensively and gain deeper business insight from it.

Geoblockchain is higher on the technology’s maturity curve. A simple blockchain records what happened—for instance: Property X was transferred to Owner Y from Owner Z. Further up the maturity curve, a company using a Geoblockchain might rely on IoT-based sensors and location technology to track not just what goods changed hands, but where that happened, and under what conditions.

Industries Moving First

Cross: Which industries are benefiting from blockchain and Geoblockchain?

Papantoniou: The first thing to note is that it’s still early days for this technology. But we are starting to see use cases. The financial industry has been a pioneer with cryptocurrency. Now, traditional banks are experimenting with the use of blockchain for smart contracts, online identity management, and more-efficient transfer of capital.

In the automotive sector, Porsche recently announced it is testing blockchain in its vehicles. Early apps will be built on blockchain’s ability to manage identities. That might allow the car owner to grant a delivery driver access to the car’s trunk to drop off a package while the owner is at work.

It’s also easy to imagine a next-level use case for automakers. Since many of them now offer short-term rentals to customers, they might use Geoblockchain’s identity-management capabilities to give the right customer access to the right car. Fleet managers can use Geoblockchain’s location capabilities to track the location and condition of cars.

Cross: Are other industries experimenting as well?

Papantoniou: Yes, we’ve seen early signs of Geoblockchain use in pharmaceutical and medical equipment companies; manufacturing, logistics, and retail; and healthcare. In general, Geoblockchain is attractive to companies that:

• Track the provenance of their goods
• Record transactions on paper, and
• Keep transaction data in siloed databases

A Newly Digitized Supply Chain

Cross: Many companies have already begun to digitize their supply chains. Why would they need a Geoblockchain?

Papantoniou: The main advantages of Geoblockchain are speed of transactions, data accessibility, and data accuracy. Think about a typical global supply chain. A shipment of lettuce can pass through dozens of supply chain partners. Each one records each transaction, often in different systems. That means the chain of custody, even if it’s digital, often splinters into many versions of the same story.

With Geoblockchain technology, those transactions are agreed on by all relevant parties and recorded in one distributed ledger, providing proof of location (PoL) and other details. So, the companies don’t need to reconcile disparate versions of how, where, and with whom the product traveled. They can also access that data quickly because it’s on the distributed ledger, open to everyone associated with that blockchain.

A single version of the truth can be particularly valuable when, for instance, an incident of foodborne illness occurs. Then a manufacturer or retailer can quickly trace the products to their source and recall only the affected batches. That can save lives as well as time and money, and help protect a company’s reputation. Walmart, for example, is working on this now.

Cross: Where are the early use cases occurring?

Papantoniou: European and Asian companies seem to be the first-movers. Most of them immediately see the value of adding location information to the blockchain. When they combine blockchain with a geographic information system (GIS), every transaction shows up on a map, revealing the condition of the shipment, the parties involved in the transaction, and its exact location.

The Geoblockchain creates the kind of supply chain visibility that most manufacturers and logistics providers have sought for decades.

The smart city movement is also driving adoption, and places like Dubai and Seoul are investing millions to run government operations on blockchain.

Where to Begin?

Cross: How do the executives you’ve worked with evaluate Geoblockchain as a potential solution? How do they figure out where and when to pilot it?

Papantoniou: The executives we work with look at several things to make that decision. One, are there real-world or virtual items that change condition over time and need to be tracked—for example, a container of goods, a financial transaction, or a consumer product such as a car?

Number two, do those entities sometimes get mixed up or locked in different systems? If so, blockchain may help the company maintain one system that keeps a universal record of that item.

Number three, is speed of access to data important, and can it reduce time to action? Number four, does the location of the asset matter to the business? If location data can help the business make better decisions, a Geoblockchain can serve as the ledger.

Cross: If I’m a business executive who wants to explore Geoblockchain, where do I begin? This isn’t an off-the-shelf product, is it?

Papantoniou: No, but the components of a Geoblockchain can be straightforward to conceptualize. That said, the integration of those components presents some innovative and technological challenges. The first component can be the blockchain capability itself, which is available as a cloud-based service through companies like Amazon, IBM, Microsoft, and SAP. Then a modern GIS may add location intelligence to the blockchain. That allows a company to peg each transaction to its location and analyse all kinds of business scenarios on smart maps. With that combination of capabilities, companies are finding that they can increase the speed and accuracy of asset tracking and decision-making.

Better decision making will become increasingly important as the speed of business and the demands on the supply chain continue to intensify. The implementation of Geoblockchain innovations may be an engine for improved business decisions.

In quick succession in October 2018, the Nobel Prize in economics was co-awarded to a Yale professor who pegged the cost of poor environmental practices to economic health, and a United Nations (UN) panel of scientists revealed that the world has less than a decade to take action against devastating climate change.

Sustainability is once again front-page news.

And while governments struggle toward collaborative solutions, businesses are driving corporate sustainability efforts backed by big data analytics and location intelligence.

The UN’s Sustainable Development Goals

On September 25, 2015, heads of state gathered at the United Nations headquarters in New York City. At that summit, 193 countries signed on to a new set of global sustainability targets. The UN’s Sustainable Development Goals (SDGs) use simple language to lay out an international regulatory framework for radical changes to be made in the world by the year 2030.

The SDGs are known as a government initiative, but companies worldwide consulted on their development, and they will have a potentially enormous impact on the business world. In part, that’s because their successful implementation will require investment and support from the private sector. A report by the UN’s Sustainable Development Solutions Network estimates the cost of SDGs at US$1.4 trillion per year until 2030. The same report notes that approximately half of the investments can be privately financed.

The sustainability effort is of particular interest to companies that convert natural resources into products—among them energy providers, car manufacturers, and food purveyors. For those businesses, investment in the SDGs can be critical to conserving the raw materials of production for decades to come—and locking in long-term competitive advantage.

Across the business world, executives can see the implication: sustainability could soon become a major business opportunity.

The Role of the Private Sector

Just one day after the September 2015 summit, then-UN secretary-general Ban Ki-moon held the United Nations Private Sector Forum to discuss the role of businesses in achieving the Sustainable Development Goals. More than 200 executives from organisations around the world joined him in New York, including leaders from Dell, Deloitte, Facebook, Fidelity, PepsiCo, and Siemens AG.

The secretary-general told business leaders, “I am counting on the private sector to drive success. Now is the time to mobilise the global business community as never before. . .  Trillions of dollars in public and private funds are to be redirected towards the SDGs, creating huge opportunities for responsible companies to deliver solutions.”

Corporate organisations seem to agree. In a 2017 McKinsey survey, nearly 60 percent of organisations said they are more engaged with sustainability than they were two years prior, with engagement levels rising to 80 percent in certain industries like packaged goods and infrastructure.

Indeed, as climate change continues, companies that rely on natural resources are taking a hard look at the long-term viability of their products. In some regions of the world, for example, water supplies might soon run out. Reliable cropland could turn fallow as temperatures and weather systems shift. And yet, just 21 percent of business executives told McKinsey that business growth was a top driver of their sustainability initiatives. One way to read that finding: a select few industry leaders have figured out that smart, sustainable practices sow the seeds of long-term growth and competitive advantage.

Innovative companies are adopting tools such as artificial intelligence, IoT, and analytics to address these challenges in ways that also benefit the business—doing well by doing good. In fact, according to the McKinsey report, nearly half of the organisations using technology to advance sustainability are employing big data and advanced analytics, which typically includes location intelligence.

Where Sustainability Meets Opportunity

One such company is Nespresso. An autonomously managed subsidiary of Nestlé Group, Nespresso is known globally for its premium single-serving coffees. Key to Nespresso’s success and customer loyalty is the company’s emphasis on—and investment in—the consistency of its coffee’s flavour.

However, coffee is a delicate crop, frequently grown in developing countries and highly dependent on healthy ecosystems. This leaves coffee and Nespresso susceptible to the increasingly volatile effects of sociocultural events and climate change. For Nespresso, acting today to avoid the perils of tomorrow is not just good citizenship; it’s sustainable business.

“Sustainability is really at the core of our business. It is an imperative to our long-term business success,” explains Yann De Pietro, operations and sustainability technology manager for coffee at Nespresso. “There have been studies saying that by 2050, Arabica coffee may not be available anymore in some countries if we don’t do anything now.”

The company is working to combat that decline so that the seeds of Nespresso’s competitive advantage remain fertile long into the future.

Controlling Challenges through Sustainability

Nespresso has made a deliberate choice to integrate these challenges into its decision-making process and act on them through sustainability programs. These programs help convert liabilities into business opportunities while supporting the farmers and communities that grow coffee.

Nespresso works with over 100,000 farmers in 13 countries, up from 300 farmers 15 years ago. (See the sidebar for more.) In 2003, the company launched its responsible coffee sourcing program, the Nespresso AAA Sustainability Quality Program, in partnership with the Rainforest Alliance. The program is designed on two convictions: that high-quality coffee and the sustainability of farming communities are interconnected, and that only by building trusting, long-standing relationships with coffee producers can Nespresso hope to make a positive difference.

The company supports the implementation of sustainable agricultural practices at farms by investing in technical assistance, paying premiums directly to coffee farmers, and co-financing infrastructure improvements.

As part of that effort, the company has invested in a network of over 450 agronomists—specialists who provide coffee growers with on-site technical assistance and trainings on practices such as pruning, crop renovation, fair treatment of workers, water usage, and biodiversity conservation, all of which can earn farmers industry certifications.

Through the AAA program, Nespresso invests approximately US$35 million per year in technical assistance and premiums paid to farmers for their quality coffee. The educational program is free to farmers and doesn’t require them to sell to Nespresso, De Pietro explains. But the benefits to each side help create long-lasting relationships and loyalty.

Nespresso has a publicly stated goal of sourcing 100 percent of its “permanent range” coffee—the brand’s most prominent line of coffee capsules—from AAA farmers by the year 2020. In 2017, the company bought approximately 90 percent of its beans from those farmers.

The AAA Sustainability Quality Program falls under Nespresso’s broader strategic framework, The Positive Cup, which focuses on four areas: coffee, aluminium, climate change and engagement. In addition to its goal of sourcing all coffee from AAA growers by 2020, Nespresso has committed to other milestones that include sourcing 100 percent of its aluminium from responsible, ASI-certified sources, offering consumers convenient solutions for recycling, reducing the carbon footprint of each cup, and reaching carbon neutrality for its operations.

In 2016, the company tied those efforts to the UN’s Sustainable Development Goals, committing to making an impact on 11 of the 17 SDGs. In addition to Climate Change and Water Stewardship (which contribute to SDGs 13 and 6, respectively), Nespresso called out Responsible Consumption and Production (supporting SDG 12) and Decent Work and Growth (for SDG 8) as foundational to consumer goods organisations such as itself.

Progress through Digital Transformation

While its sustainability program has been in effect for years, Nespresso has seen recent rapid results due to advances in digital technology.

“Digital transformation is a key change for sustainability” at Nespresso, De Pietro says. “[We] want to provide maximum impact. So we need the tools to help us to maximise our efforts.”

On the balance sheet, the results look promising. When Nestlé announced its 2017 results, it singled out Nespresso’s mid single-digit growth worldwide and mid-teens growth in North America. The parent company’s growth was led by coffee, pet care, and health-science products.

At the centre of Nespresso’s digital transformation is location intelligence. The company has built a robust monitoring and evaluation system using advanced digital technology that records, maps, and shares data about farms, farmers, and coffee crops. This reveals local feedback and insight on AAA’s impact, as well as the status of each farm, including its objectives, achievements, and performance. The digital platform—which is powered by a geographic information system (GIS) and data analytics—also reveals insights into the way farmers deliver coffee beans to central mills to be harvested, a key factor in supply chain productivity and efficiency.

Bringing Intelligence to Location Data

One of De Pietro’s goals is to help farmers get their crop to market more efficiently. A recent analysis in Colombia exemplifies how location intelligence can create business advantage for the company and its partners.

A location analysis revealed that farmers brought their crops to certain Colombian mills—many of them close to their farms—less frequently than projected. De Pietro queried the GIS technology to dig deeper into the data so that he could understand these behavioural patterns. What he discovered was a reminder of topography’s effect on time to market.

With basic maps, he says, the team could work out the distance between farmers and mills. But only with sophisticated location intelligence could they understand the true travel distances to each central mill. Applying a similar analysis to the agronomists who visit Nespresso’s AAA farms, De Pietro and the team found a similar pattern. The analysis uncovered areas where the terrain required long rides or walks through the mountains to reach certain farms, making frequent visits impractical. For a company that works with 100,000 farmers, having a digital engine to deliver that kind of intelligence is crucial.

In both cases, location intelligence pointed the way to better business and sustainability practices. If the mills were more centrally located, farmers could get coffee to market more quickly. And when the agronomists can reach the farms faster, they can hasten the day when 100 percent of Nespresso’s coffee is sourced from sustainable farmers.

Just as retailers and logistics companies use location intelligence technology to plot out the most efficient drive times for customers or delivery personnel, Nespresso embraces the realisation that the distance to a location is less important than the amount of time it takes a customer or farmer to get there.

Today Nespresso is using GIS and location intelligence to build a comprehensive view of farming operations and accessibility across regions. “We have started to have a global vision of accessibility of the farms,” De Pietro says.

As Nespresso makes progress in Colombia and around the world, the organisation maps its efforts back to the UN’s Sustainable Development Goals as a way to organise and guide strategic decision-making. The AAA program, for instance, directly impacts SDG 8 (through inclusive growth), SDG 2 (by promoting sustainable agriculture), SDG 4 (through learning opportunities for all), SDG 1 (through efforts to eradicate poverty), and SDG 6 (by way of water stewardship).

The Future of Sustainability

The use of location intelligence to shed light on the granular details of day-to-day coffee farming sets Nespresso apart. By examining and adjusting locations for farmers, the company frees up precious time and increases productivity. This impacts not only farming, but also time for education and strategic planning—the very activities Nespresso hopes will sustain its coffee crops far into the future.

But questions remain on how to effectively implement wide-scale change across industries. The global community faces major challenges on this front in the coming decades. The Sustainable Development Goals, for example, are not on track to be realised by 2030. The UN acknowledges where countries are lagging behind, stating, “This ambitious agenda necessitates profound change that goes beyond business as usual.”

Business-as-usual attitudes are among sustainability’s challenges. Some of the largest and wealthiest organisations in the world are not actively participating in sustainability efforts. The UN’s SDG Commitment Report 100, released in 2017, found that American companies score far worse than their European counterparts. Of the 18 companies with no mention of sustainable development themes, 15 are American.

Regardless, there are strong incentives to invest in corporate sustainability strategies, for reasons both reactive and proactive.

For instance, a team at McKinsey found that up to 70 percent of an organisation’s earnings can be impacted by risk-related sustainability issues. Michele Giddens, a specialist in sustainable and impact investing, sees businesses beginning to accept and support a shift to a circular economy where optimising sustainability can increase long-term growth.

Nespresso’s example spotlights the reality defined by these scenarios. Its core product and the heart of its brand—coffee—is at risk from climate changes in coming years. The company is approaching these challenges proactively, taking steps to not only mitigate risk, but also use digital technology and location intelligence to create strategic differentiators.

Treating sustainability as both a guiding principle and an opportunity to gain competitive value may be the way forward for other innovators in the business community.

If you thought the burger wars had cooled off, take note. Through a combination of marketing moxie, mobile innovation, and location intelligence, one international brand has fired them up again.

The flare-up comes courtesy of Burger King, which recently launched a bold effort to poach customers from rival McDonald’s. Like all memorable marketing campaigns, this one is both simple and fiendishly inventive.

As reported by QSR magazine and other outlets, the gambit works like this: Anyone with the Burger King mobile app and location services enabled on a smartphone can order a Whopper for just a penny—as long as they do so within 600 feet of a McDonald’s location. The BK app then directs the customer toward the nearest Burger King to claim the meal.

The initiative ends December 12, but its impact is likely to be felt well beyond.

A Digital Fence and a Dream

The practice of geofencing is integral to the Burger King effort. The geofence relies on several components, including an IoT device in the form of a smartphone, real-time IoT communications, and basic location intelligence. When the app senses that a customer’s phone has crossed the digital “fence,” around a McDonald’s location, it unlocks the $.01 deal.

Geofencing is a form of location intelligence typically managed in a modern geographic information system (GIS). Companies inside and outside the retail industry have used the technique for customers connection, compliance, and even worker safety.

For instance, some logistics providers set up geofences to ensure that drivers stay within designated delivery routes. Oil and gas companies enlist GIS-powered geofences to deliver alerts to workers who are near hazardous areas. And organizations in many industries create geofences that trigger deals for shoppers, notifications for upcoming concerts, and information about historical landmarks.

Perhaps the most cunning use of location intelligence in the Whopper scenario isn’t the ability to sense where customers are, but the functionality that gets them where they need to be in time to retrieve their orders.

A Marketing Campaign Underscores Changing Customer Preferences

The BK marketing campaign may be short on subtlety, but there’s one aspect of it that may not be so obvious: Burger King is using location intelligence to answer an emerging customer demand that crosses industries.

The Whopper deal, it turns out, is a way to promote the new order-ahead capabilities in the company’s mobile app. Customers can now place orders through a mobile device and skip the line when they reach the restaurant. Delivering similar capabilities is front of mind for retailers, restaurant executives, and nearly all B2C companies. They’re answering it in interesting ways, with the help of location intelligence.

Logistics companies, for instance, are using GIS-fueled apps to deliver packages to almost any destination, subject only to the customer’s whim. Some will even deposit a package in a customer’s car trunk with help from a temporary access system that combines GIS and blockchain technology. (For more on that innovation, stay tuned for WhereNext’s article on holiday deliveries.)

One of the top beverage retailers in the world uses GIS in its mobile app to ensure that customers who place orders on their devices will find their orders ready—at the expected temperature—when they walk into the store.

As consumer preferences and expectations change, forward-leaning executives in many industries are disrupting traditional methods of customer interaction. Through a combination of marketing ingenuity and GIS-powered location intelligence, some are finding new ways to stand out from the competition.

(For examples of how leading companies have harnessed location intelligence, explore this e-book.)

Everyone has trouble sleeping from time to time. But if you’re in charge of monitoring global supply chain risks for one of the world’s largest automakers, there’s a lot to keep you up at night. Just ask Paul Rossi, currently a member of the strategic risk management team at General Motors, and formerly the company’s supply chain risk management (SCRM) lead.

GM produces more than 10 million vehicles a year in over 100 countries, sourcing more than 100,000 unique parts from 5,500 supplier sites worldwide. Suffice to say, GM’s worldwide production operation is a well-oiled machine. But as with any automaker, so much can go wrong.

GM’s production is exposed to a broad range of disturbances—from political uprisings and weather events to labour disruptions and supply shortages. When problems arise, the faster the SCRM team can get information to GM’s global crisis managers, the quicker the company can resolve those problems before customers are affected.

To do that, Rossi relied on a geographic information system (GIS) that maps the interconnections among GM’s thousands of tier 1, tier 2, and tier 3 suppliers. When an event such as a factory fire or a storm occurs, the system enables the team to focus on a specific part and trace it from its source to its destination plant and vehicle program.

If it looks like a part shortage could threaten production, Rossi’s colleagues in crisis management can activate their contingency plans much sooner than was possible when they manually collected data about adverse events.

“The most important thing is being able to respond and recover quickly when disruptive events occur around the globe—events like earthquakes, factory fires. By the time you know about them, you’re already in recovery mode,” Rossi says. He and his colleagues investigated 700 events (and took action on one-third of those) in 2017, the first year the system was in place.

The Upfront Work

Mapping GM’s supply base into the GIS (see image below) required a substantial upfront effort as well as ongoing maintenance, especially when it came to the tier 2 and tier 3 suppliers. “We have all the location information and data for our tier 1 supply base—the suppliers that ship directly to GM,” Rossi says. It proved much more difficult to map the sub-tiers, the suppliers that ship to GM’s tier 1 suppliers and their suppliers.

“It took a big manual effort of us reaching out individually to our tier 1 suppliers. We set a new expectation by putting a process in place to receive this information from our suppliers during the sourcing process,” he says.

Some suppliers shield the identity of their supply base, he notes, making them reluctant to provide details. In those scenarios, the SCRM team works with the suppliers directly to make sure they’re doing everything they can to manage risk, and to establish a clear expectation of what their crisis reporting to GM should look like.

GM also partners with several companies to obtain data from news sources and providers of critical weather information. “We’ve been able to integrate data feeds directly into our GIS tool,” he says. “It has allowed us to get all relevant information in one spot and run reports quickly.”

In essence, the system listens to a wide variety of information sources around the world and generates alerts when adverse events crop up. For example, if a fire breaks out at a supplier plant and a local news station covers it, Rossi and team will hear about it in near real time.

Need for Speed

Key internal customer Bill Prince, one of GM’s supply chain crisis managers, can attest that the risk-notification system gives the automaker more response time. Last year, for example, a magnitude 7.1 earthquake in central Mexico caused hundreds of deaths and impacted many GM supplier operations in the area. Already coping with the aftermath of Hurricanes Irma and Harvey, the crisis response team was nevertheless able to move fast when it received email alerts and a detailed report about the earthquake.

Quickly convening a crisis room, the five-person team used GIS-based maps to identify suppliers within a 100-mile radius of the quake. From there, the process is straightforward. “We contact the suppliers to be sure they are healthy and safe. We try to see if they need help or resources if they are impacted,” Prince says. “Then we run our normal operation where we manage available parts, get the pipeline restored, and allocate between assembly plants.” In this case, GM regional resources—the “boots on the ground”—worked with approximately 20 affected suppliers.

“The tool gives us a lot more focus than we would have otherwise,” Prince says.

The location intelligence has dramatically increased event-detection speed and accuracy and also improved the efficiency of GM’s response, according to Rossi. As a result, the company’s insurance premiums have dropped.

The GIS also enables supplier footprint analysis at a granular level, so purchasing and sourcing teams can make better-informed decisions. GM uses the system to maintain a socially responsible supply chain by pinpointing politically charged regions and steering clear of conflict resources that promote fighting and human suffering.

Supply Chain Tremors Ahead

Location intelligence will be particularly valuable to companies like GM as the number of adverse weather events grows worldwide. Respondents to the World Economic Forum’s Global Risks Perception Survey 2018 foresee environmental risks growing in both likelihood and impact over a 10-year horizon. That’s not surprising, given that weather events in 2017 were volatile, featuring high-impact hurricanes and extreme temperatures.

Natural disasters are not the only calamity on the minds of supply chain managers, of course. Data security, terrorism, and war also rate high on the worry spectrum, according to the SCM World 2017 Future of Supply Chain survey. As supply chain analyst Kevin O’Marah wrote in Forbes, managing supply chain risk used to be a matter of avoiding supplier disruptions, but now the scope is much broader.

These are anxious times, and every extra piece of insight brings businesses more power to avoid interruptions.

Business, Uninterrupted

For GM, understanding the geographic location of its supply network is essential to understanding how a particular incident will impact its supply chain, Rossi says. “Having an understanding of what vehicles could be impacted by an event—which part numbers, and specifically which plants—really helps us create an effective response.”

Before the rollout of the location intelligence system, the crisis-response process was very similar to what it is now, but it often took days or weeks to fully understand the impact on suppliers, parts, programs, and vehicles. “We had to spend a lot of time prioritizing and pulling data,” Rossi says.

Now, the location intelligence delivered by GIS “has allowed us to avoid costs associated with disruptive events. Even an hour’s worth of downtime at one of our plants can impact deliveries to our dealers and the overall customer experience,” he says.

Routine business disruptions can be just as threatening as natural disasters. GM recently had a supplier that went into bankruptcy unexpectedly. That supplier shipped multiple part numbers to multiple plants, enlarging the potential scope of problems.

“We could very easily and quickly trace the material flow from that supplier to each of the plants that they supplied,” Rossi says. “That allowed us to identify specific suppliers that could make up the production from the bankrupt supplier, and put us in a position to recover.”

GM is among the innovative companies that view location intelligence as a key tool for decision support throughout the enterprise.

“Without the tool, that could have taken weeks,” Rossi says.

Balancing Decision Support and Data Overload

With a wealth of rich data in GIS, it is a continual balancing act for Rossi and his colleagues to equip crisis managers with information but not overload them.

A recent factory fire—the most common of all the adverse events that affect GM’s production—that occurred in Michigan is a good illustration of an event that did not rise to the level of crisis. “They had a legitimate fire. It was reported on the news,” Rossi recalls. But an employee quickly put out the fire, and the line was down for only about 45 minutes. “Everyone went back in and got back to work.” In the end, this incident did not warrant raising a red flag.

When an event is worthy of the crisis management teams’ attention, the risk management team first filters the data down to the most actionable and relevant insight. They deliver a report with an overview of the event as well as high-level statistics, such as the number of GM plants and suppliers that could be affected and the part numbers involved. “It’s important for us to provide the data and frame it in a meaningful way, not just for leadership but for our crisis management teams,” Rossi notes.

Location intelligence also helps the team understand which parts are dual sourced or even triple sourced—vital insight during a crisis. Now, “we understand when we have an alternative supply for a particular part that may be in an impact zone. The tool helps us understand that quickly.”

The Road Ahead

Rossi believes the location intelligence system drives a market edge for GM. “Part of the reason we believe this tool gives us a competitive advantage is because we’re first to respond after events occur,” he says. “So we’re in a position to provide our products to our customer in the wake of an event sooner than our competitors would be able to.”

He also strongly believes that supply chain risk management can help whole industries. The more companies that do it, the better off they all are, he says. That’s true for suppliers as well as OEMs.

Few suppliers have a supply chain risk management program that’s monitoring the globe for adverse events. “So we’re actually monitoring their supply base for them,” Rossi says, “and if something occurs with one of their suppliers, our crisis management team will reach out to make them aware.”

At GM, put simply, effective supply chain risk management boils down to the ability to accelerate the discovery of events and the actions needed to mitigate them.

Location intelligence “puts us in a position to protect our customers,” Rossi says. “Being prepared to react and respond quickly—and also having the edge to be proactive when we’re able—allows us to protect the supply to our customers, both internally and externally.”

Rossi acknowledges that being armed with data cannot remove supply chain risks altogether. The next major earthquake could happen tomorrow and disrupt GM’s supply chain, he says. “We just need to position ourselves as best we can to deal with that. GIS allows us to deal with the unknown–puts us in a position to be prepared.”

Paul Rossi and the General Motors GIS family would like to acknowledge the contributions of their colleague Tali Kritzer to the success of the GM Supply Chain Visualization application described in this article. Tali passed away this year, and will be greatly missed by the team.