The technologies changing supply chain logistics

| 23. Sep 2020

Future of logistics - embracing technology


Digital innovation, Covid 19 and Brexit are changing the world as we know it. Supply chains reliant on international trade or those who had not already embraced the critical supply logistics technologies were impacted the most. Consumer expectations and manufacturers’ capabilities are now transforming beyond all recognition and digital transformation in organisations is being accelerated to meet new and existing supply chain industry challenges. Logistic service providers (LSPs) that embrace these new rules will thrive, although despite shifting consumer demands and tech-innovation in both retail and manufacturing supply chain, the logistics sector has been slow to acknowledge and embrace its digital future. Hindered by the habits of its past and outdated, often manual legacy systems organisations are now being driven to speed up digital transformation initiatives.





In the face of growing market competition, logistics, operations and supply chain managers must be relevant, efficient and adaptable. Consequently, they must expand their digital transformation strategies and find ways to ensure a more intelligent, connected, innovative and automated approach to supply chain technology. However, many logistics service providers are unsure which technology to adopt to increase efficiency, mile deliveries, improve service, order fulfilment and improve customer experience to maximise their business potential.


The seven technologies providing the most disruption to the future of logistics are:


  • The Internet of Things (IoT): The Internet of Things enables everyday objects to send and receive data by connecting with the internet. For LSPs this can provide a valuable link between warehousing and distribution by digitising and connecting pallets, trucks and ships throughout the supply chain to offer real-time visibility and transparency. IoT technology also links with Application Programming Interfaces (API) which remove the need for manual checks and automate communication.

  • Artificial intelligence and data: Data has always been at the heart of logistics and the sector has never had access to so much. Artificial intelligence can make sense of structured and unstructured data to accurately forecast needs such as resource and route networks in real time. In operational terms this means improve tracking of deliveries and improving schedule management and cargo monitoring while strategically, it means automated and more information-rich decision making without the need for specialist training. This will improve the customer experience through greater efficiency and predictive insights, however LSPs will have to consider the implications surrounding data processing security and privacy. 34%[1] of AI users in the logistics sector are already seeing a return on their investment.

  • Blockchain: Blockchain is “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value”[2] and allows suppliers and customers to track and trace products and auditors to check transactions. It stands to improve the efficiency and speed of logistics administration. The Eye for Transport (EFT) Global Logistics Report cites blockchain as the biggest game-changing technology for logistics, despite only 20%[3] of logistics companies currently using it. However, 26%[4] of EFT respondents said they were already seeing a return on investment from blockchain.

  •  Automation and robotics: There are already plenty of examples of robots picking and despatching items to provide greater efficiency and workflow automation in both delivery and warehousing. What is less known is just how quickly these technologies will continue to evolve and be adopted by LSPs.   As PWC’s The Future of the Logistics Industry report identifies ‘Some of the industry’s most labour-intensive processes are on the way to being fully or partially automated, from warehousing to last-mile delivery.”[5] Robotics are cited as the second most game changing technology, with 23%[6] of logistics companies using it seeing return on investment. Automation will help LSPs to manage resources more effectively, removing people-power on once labour-intensive jobs, automating those processes and freeing up human resource for greater endeavour.

  • The Cloud: The cloud offers extreme control over complex processes and makes it possible for logistics operators to access real time information and software at any time and from anywhere. From real-time inventory management to pricing information and coordinating the sharing of information between partners and clients, the Cloud provides vastly improved efficiency.

  • Autonomous vehicles and drones: While both of these options have presented ethical questions about their use, liabilities and how they will be supported and/or limited by regulation – both have the capacity to reduce the need for people power, increase efficiency in the delivery process, reduce costs and improve delivery times.

  • 3D printing: As 3D printing becomes more common place it is inevitable that there will not be the same demand for transportation of finished goods. Instead the focus will likely shift to transporting raw materials, with retailers and manufacturers printing items in situ and only requiring ‘last-mile’ delivery.



While the industry has been described as one of the most innovative in the world, it is “…seemingly one of the late comers into the digital data and technological space.”[7] It would be easy to think that because of this, digital transformation requires an all or nothing approach; a leap of faith.





Successful digital change does not have to begin with the introduction of robotics or a commitment to AI, nor are these technologies the only way to deliver transformational value. Digital change starts with much smaller steps such as building a digital-ready culture, introducing agile working, using automated workflows and harnessing the cloud. In fact, some of these tools can boost business performance in weeks rather than years and provide the foundations for more seismic long-term change.


An invaluable and important first step is to take a closer look at workflows - namely how work is done, and information moves through an organisation. By embracing managed print services, business process management and intelligent automation it is possible to overhaul workflows and find ways to improve data security and accessibility. Software robots can be used to gather, extract, transfer, compare and calculate data to free up people-power for higher valuable cognitive tasks. The latest multi-functional print devices can keep important data secure and help it to move between departments with ease and digitised workflows and workspaces can stimulate companies’ appetite for greater digital innovation and change.


While digital transformation may sound onerous, overwhelming and expensive it is imperative if LSPs are to avoid becoming obsolete. The successful LSPs of tomorrow will be digitally-fit, agile and innovative ; a process that starts with understanding the technologies available and taking the first steps towards digital transformation.








NOTES:


[1] Figure taken from EFT report as quoted here: https://blog.jda.com/2018-eft-global-logistics-report-innovation-and-technology-are-paving-the-way-forward/

[2] Quote from Don & Alex Tapscott, authors Blockchain Revolution (2016) as quoted here: https://blockgeeks.com/guides/what-is-blockchain-technology/

[3] Figure taken from EFT report as quoted here: https://blog.jda.com/2018-eft-global-logistics-report-innovation-and-technology-are-paving-the-way-forward/

[4] Figure taken from EFT report as quoted here: https://blog.jda.com/2018-eft-global-logistics-report-innovation-and-technology-are-paving-the-way-forward/

[5] https://www.pwc.com/gx/en/transportation-logistics/pdf/the-future-of-the-logistics-industry.pdf

[6] Figure taken from EFT report as quoted here: https://blog.jda.com/2018-eft-global-logistics-report-innovation-and-technology-are-paving-the-way-forward/

[7] https://www.xeneta.com/blog/digital-fitness-prerequisite-logistics-success