Same-day and last-minute delivery presents logistics experts with many challenges. To further extend the functionalities of SAP Transportation Management, SAP Co-Innovation Lab teamed up with startup VeeRoute on an artificial intelligence (AI) solution for automated logistics.
Life used to be a lot easier for logistic specialists. Delivery would target certain shops in fixed locations that would vary extremely rarely – and so would the according transportation routes.
“Internet delivery has changed all that,” explains Igor Pak, head of the SAP Co-Innovation Lab location in Moscow. “Same-day or next-day orders via the Internet have become immensely popular in Moscow and elsewhere.”
Many customers around the world rely on the SAP Transportation Management application to manage complex logistics fleets and networks, and SAP was actively looking for a partner to bring enhanced capabilities like same-day itineraries to the product, according to Pak. The SAP Co-Innovation Lab team in Moscow found that partner in Mikhail Kudinov and his startup VeeRoute.
VeeRoute: Machine Learning Solution for Logistics
VeeRoute developed a solution to calculate optimal delivery routes in short time, taking into account city traffic, weather conditions, and other factors. The VeeRoute Logistic Workspace allows for monitoring individual vehicles and transportation routes, as well as for an overview of working shifts.
“VeeRoute’s sophisticated planning system is our greatest competitive advantage,” says Kudinov, chief commercial officer of VeeRoute. “Due to the differences in the logistics processes of different companies, we need to provide different algorithms.”
VeeRoute’s planning model now contains more than 200 algorithms. The AI uses neural networks to understand which chain of algorithms to run to receive the best results in a short time.
For that, data is key. Data from clients contains the information about what needs to go where and at what time, and information from search providers like Google and Yandex is added in additional layers to account for variables like weather and traffic situations.
“Some of our clients have 20,000 deliveries per day,” says Kudinov. “VeeRoute makes it possible to predict delays early on and supports clients in informing their customers in advance.”
VeeRoute also offers mobile apps that allow customers to track their deliveries and couriers to check if it is necessary to call the client because of a delay.
“We are aiming for error-free logistics,” says Kudinov. “As soon as a human being is part of the logistics process, the process becomes prone to errors. VeeRoute searches routes for drivers much quicker than any human ever could. On the other hand, it was important for us to design a solution that allows for human intervention in non-standard situations.”
Co-Innovation with SAP Provides a Win-Win Situation for Startups
Kudinov and co-founder Vladimir Kudinov graduated at the young ages of 15 and 16 respectively from the prestigious school 239 in Saint Petersburg, where many Russian startup founders were educated. At 18 and 19, they founded their first startup and after gaining corporate experience by working for Intel and T-Systems, they organized a Business Incubator at ITMO University in Saint Petersburg.
“Entrepreneurship was what we had really set our minds on and we’d been experimenting with lots of ideas — from flower shops to designing CRM systems,” says Kudinov. “The Incubator helped us understand gaps in the Russian market.”
Founded in 2014, VeeRoute won a prize from SAP early on as a startup with the highest potential for collaboration.
“However, we didn’t see the connection,” Kudinov says. “Over time, though — when we won more and more customers that were using SAP and they told us: ‘SAP will help you to integrate your solution’ — we realized it was the logical next step to enter into collaboration with SAP.”
“There are currently six SAP clients using our software,” Kudinov says, as he describes his vision of the future. “As a next step, we want to move VeeRoute to the cloud, which will make implementation even easier for customers. Plus, a lot of shops already have IoT devices to monitor their stocks. This data can also be moved to the cloud and made accessible to VeeRoute.”
“It’s a win-win situation for both SAP and VeeRoute,” says Pak. “But most importantly, with the integration of VeeRoute into SAP Transportation Management, customers are being provided with much sought-after functionalities, powered by state-of-the-art technologies. This is exactly what the SAP Co-Innovation Lab wants to accomplish.”