Bosch cloud platform unlocks operational efficiencies for logistics industry

The global logistics market is estimated in 2022 at $10.7 T, with projected growth by 2032 to $18.2T at a CAGR of 5.5 percent. Despite a significant market size, the industry is plagued with inefficiencies. Low transport fill rates with 25–30 percent of loads being empty, a driver shortage with 2.6 million unfilled driver jobs in 2021, and manual efforts for operational decision-making are just a few. At the same time, carrier (i.e., transporter, logistics service provider, fleet operator) profit margins can be as tight as 1–2 percent, and the COVID-19 pandemic further proved that many carriers operate on the edge of business continuity with the number of trucking bankruptcies tripling in the US in 2020. This puts carriers under significant operational pressure, where even smallish business process improvements potentially have a tangible impact on the business.

Given that 90 percent of the carriers own fewer than 10–15 trucks, the majority of carriers do not have the luxury of technology or consistent data processing. In an industry with modest profit margins and significant costs, lack of easy, informed access to technology is a make-or-break proposition for carriers, forcing them to miss out on technology-driven efficiencies, revenues, and emission-efficient operations.

This is also an industry that generates massive volumes of data due to the prevalence of low-cost GPS and tracking devices. McKinsey & Company estimates the value of using transport and logistics data with artificial intelligence (AI) at more than $400B, but 90 percent of the market, the small players, are far from realizing this value. While large enterprise players will gain advantage by using such technologies, large sections of the market will be permanently disadvantaged for lack of easy, informed access to even basic technologies. This increasing pressure is present on both revenue and cost sides, further narrowing already tight margins.

Bosch Mobility Solutions—the largest Bosch Group business sector—will expedite the digital transformation of the logistics and transportation industry by empowering all market players to unlock data-driven value in revenue, efficiency, and sustainability by building the Bosch Logistics Operating System (Bosch L.OS). Bosch L.OS is a global cloud-based service platform that facilitates easy, informed access to solutions from different partners. It also enables seamless integration of separated solutions capitalizing on network effects of cross-partner and vendor data empowered with machine learning (ML) and decision guidance. The platform’s ambition is for carriers to benefit from already available and newly created digitalization opportunities and, in turn, improve quality of decision-making and operational efficiency.

In this blog post, we show how strategic collaboration between Bosch and AWS uses cloud technology and solutions from the partners to develop the Bosch L.OS platform and alleviate carrier challenges by implementing region-driven use cases in service orchestrations and unlocking operational benefits for larger revenues.

Bosch L.OS overview

Using Amazon’s innovation mechanism of working backward from the customer, the joint Bosch and AWS team started with the most pressing carrier challenges to derive Bosch L.OS solution areas. We started with the five that we believed were the most important: operational decision-making to help carriers make decisions quicker and with better outcomes, driver shortage and retention, carrier operational costs and revenue potential, visibility and tracking of tractors, trailers, and cargo, and carbon footprint. Deep dives into these challenges resulted in six initial Bosch L.OS solution areas.

Bosch L.OS is designed as an open platform for all ecosystem players like carriers, shippers, brokers, drivers, service partners, and independent software vendors (ISVs) with an initial focus on the carriers to deliver incremental, differentiated value with data leverage. Conceptually, the Bosch L.OS platform unleashes: (1) horizontal integration of services, in addition to providing access to qualified ISV solutions; (2) service orchestrations that address unsolved industry challenges using cross-vendor data correlation and resulting decision intelligence.

Commercial and horizontal integration of digital services

At the core, Bosch L.OS provides a horizontal integration and data layer between carriers as customers and digital solutions from ISV partners. This allows the platform to act as a one-stop shop for logistics solutions and provides users with centralized access to services. Additionally, and most importantly, it creates an opportunity for horizontal integration to connect services and data across partners to release synergies and make synchronized and holistic decisions.

The ISV partners, in addition to benefitting from increased exposure on the marketplace and the resulting sales of their core product offerings, benefit from accessing the horizontal integration layer that pre-integrates all participating vendor products. They also benefit from data services that provide access to normalized, correlated data across various vendor products, saving time and development efforts and expediting their time to innovate, develop, and launch new features and products.

The carriers and other industry players benefit from a unified experience across disparate products and seamless interaction with multiple solutions, minimizing the operational and decision fatigue of operators.

Service orchestrations using data and decision intelligence

Given how the industry has evolved over several decades into siloed, point solutions for very specific, narrow functional areas across the value chain of asset management, fleet management, transportation management, etc., there is immense value in not just connecting these point solutions into a cohesive operational continuum with a unified user experience as above, but also in using the correlated and complementary data for unlocking value.

By diligently studying the industry challenges and available solutions, AWS and Bosch industry experts jointly discovered specific unaddressed, promising white spaces to develop innovative solutions, called service orchestrations. These are areas that are not addressed by existing solutions, that require multiple underlying solutions to be bridged, and are where users see measurable and incremental value in such connected orchestration. We will now consider two examples from our joint innovation portfolio.

Bosch L.OS service orchestration examples

Truck parking seamlessly integrated with transport management

In Europe, more than 400,000 truck parking spaces are missing along the highways. This often leads to insecure and noncompliant parking, increased stress levels for drivers, unnecessary costs, and additional traffic and emissions spent searching for a parking spot. Bosch Secure Truck Parking is a digital solution that helps dispatchers and drivers find and book parking spots online. However, carriers already use many separate systems to support their operations, so it is challenging to introduce another one just to solve the parking challenge. This is exactly what Bosch L.OS is now solving. Due to a smart integration via standardized application programming interfaces (API), ISVs can easily integrate a parking management solution into their transport management systems (TMS), providing their users with the option to find and book a parking space when planning or executing the route. This shows the power of the horizontal integration layer and synchronized decision-making. As Magnus Wagner, Co-CEO of ISV partner LIS Logistische Informationssysteme GmbH, states, “by simplifying the integration of value-added services into our TMS WinSped via Bosch L.OS, we avoid system breaks on the user side, which in turn pays off in terms of efficiency and greater user experience”.

Vehicle health monitoring and maintenance

Delivery vehicle maintenance is crucial for any logistics management company with a long-term plan to remain competitive and adopt innovative long-distance or last-mile delivery initiatives. Prioritizing vehicle maintenance streamlines the work of any logistics company. It improves the availability, reliability, and durability of delivery vehicles. By doing so, it also helps with faster and more predictable deliveries, lowers costs, improves customer satisfaction, and boosts revenue.

Logistics management companies use different metrics to monitor their delivery fleet maintenance programs. They use indicators like fuel consumption, vehicle availability, breakdown frequency, fleet productivity such as on-time deliveries, and total maintenance costs.

This is the area where the data- and intelligence driven decisions super-charged by Bosch L.OS surface. By unifying data from several disparate sources, like vehicle health, historical vehicle performance, usage, terrain driven on, and even the type of loads, Bosch L.OS predicts health status and arrives at more accurate maintenance guidance than more conventional periodic scheduling. This will not only save vehicle-off-road days but also improve the overall lifetime of the vehicle due to informed, data-driven decision-making.

This helps the fleet operators by enabling their existing fleet management systems (FMS) to seamlessly exchange data with advanced vehicle health monitoring systems via horizontal integration. The following example helps to accurately predict the health status of the engine systems and also quantify the impact on the fuel economy, allowing carriers to make informed decisions on vehicle maintenance. In turn, this boosts the reliability and durability of vehicles for better customer satisfaction, predictable budgeting and planning, longer fleet lifespan, and increased carrier revenues.

Platform technical foundations

Bosch L.OS Core Platform (L.OS CP) is built as AWS-native and structured in four vertical layers: (1) foundation and infrastructure; (2) horizontal integration; (3) core management; (4) user interface. The Bosch L.OS CP integrates into the physical world through partners (integration tier), who will integrate vehicles, fleets, and other categories of edge data sources (edge tier). Customers will interact with Bosch L.OS CP through the user interface layer and the use case tier by using different product offerings enabled by the Bosch L.OS CP.

Foundation and infrastructure – Bosch L.OS CP builds on top of a state-of-the-art AWS Control Tower landing zone, enabling a global multi-regional multi-account strategy and platform scaling in a practicable and consistent way. Reusable solution deployment patterns are defined as AWS Service Catalog portfolios and products and shared to customer and partner accounts. These enable repeatable implementation of common resources accelerating customer on-boarding to the Bosch L.OS platform. The landing zone enables Bosch to establish in the future managed service provider offerings for internal and external customers (ISVs, partners) to host and run Bosch L.OS solutions on one single stack. The foundation layer provides major capabilities and services, such as operations, DevSecOps, security, and global observability—a single pane of glass view of resource health and performance, data flows, telemetries, and interactions between workflows that span single or multiple AWS accounts using Amazon CloudWatch, AWS X-Ray, and AWS ServiceLens.

Technical stack

Horizontal integration layer – Bosch L.OS implements the data brokering pattern or data mesh in order to: (1) enable orchestration of multiple producers and consumers (third-party services); (2) expand the domain model (agnostic) for refined use cases; (3) create pairing opportunities for products and services not available before. Amazon EventBridge and AWS Step Functions orchestrate the event-driven architecture and flow from ingest, ETL, data mesh integration, publication into the data mesh, and making data available for consumption as data products. Data producers ingest data based on use case-specific patterns (API, bulk, streaming), using e.g. Amazon Elastic Container Service (Amazon ECS), AWS Lambda and Amazon API Gateway. Amazon DataZone governs access enabling a Bosch data steward to orchestrate and manage data access.

Core management – This layer handles Bosch L.OS platform automation. It defines the necessary workflows to enable interactions between the user interface and backend services. Customer onboarding automation workflows, for example, are part of an essential process that enables the configuration at scale for customer interactions on the data brokering platform dynamically, with minimal manual human intervention. This enables the provisioning of resources and multi-tenant service configurations automatically and accelerates the customers onboarding to the Bosch L.OS platform.

User interface – Users and customers interact with Bosch L.OS CP through different portals: Developers and admins will interact through a dedicated admin and developer portal based on a react-based front end. Customers interact with the L.OS Marketplace with options to subscribe to products and services that are important for their logistic business. All UI components are hosted on Amazon ECS with a generic Bosch L.OS marketplace container image, customized and configured using parameters and feature flags to create a unique region-specific deployment with dynamic customer preference experiences.

We envision the extension into the physical world (edge) through IoT sensors or software defined vehicle (SDV) capabilities, e.g., Eclipse SDV, to directly integrate with vehicles and fleets through relay services. Carriers will benefit from a single pane of glass view of fleet health, statistical analysis on operations with configurable custom alerts and notifications, keeping fleet operators informed on the business health metrics that are important to them for the efficient running of their fleet of vehicles.

Conclusion

Strategically, as set out at the beginning of this post, the vision of enabling hard-pressed, margin-starved carriers withinstant, easy access to data- and intelligence-driven services, that will help them materialize the more than $400B value estimated by McKinsey & Company, is the promise of the transformation opportunity Bosch and AWS share. Transforming a more than 100-year-old industry, at scale and converting millions of digital novices (e.g., 5–20 truck carriers) to digital natives, is a challenging but satisfying endeavor. The efficiencies enabled by Bosch L.OS also pave the way for sustainable, emission-sensitive operations, especially given that the transportation industry is one of the largest contributors to greenhouse gas emissions.

In this post, we showed the premise for Bosch L.OS and its potential benefits for carriers, ISVs, shippers, etc., in terms of easy access to logistics digital solutions and incremental benefits from their horizontal integrations to unlock new frontiers of operational efficiency. The functional features and the architecture described above provide a mechanism for faster growth of each platform participant in terms of their respective revenues for existing products and also in terms of the creation of new products. The functional and technical interleaving of the platform unlocks network effects of data. Data enhances business value and expedited growth by enabling value-bearing interactions among logistics players and also using the insights from these interactions to deliver more value to platform participants, triggering virtuous cycle. This is called a network effects flywheel, proven at scale by several platform business model proponents, one of them being Amazon. If you are interested in collaborating with Bosch L.OS, please get in touch with the joint team using the intake form.