Technology Changing the Face of Logistics
Technology is changing the logistics game. Solution and service providers are challenged to overcome the complexity of emerging channels with increased agility and speed. Both Amazon’s and Uber’s emergence into the logistics field is creating a hype that cannot be ignored. The inevitable push for more efficient technology utilization and supply chain innovation will ultimately separate the winners from the losers.
The future will likely be a blend of niche need intersected with current capabilities. The likelihood that AI-driven, autonomous, hover vehicles rendering roadways obsolete is slim. Likewise, the push for more urban and rooftop farms will never disrupt the need for the expansive traditional food growing regions of the world. The total integrated supply chain accommodates various functions and disciplines when technology is utilized effectively.
These are applicable today:
• Improved automation in warehouses to include full-blown ASRS to an increasing availability of practical modular automation choices and robotics
• IIoT and 5-G devices and the increase of M2M (machine to machine) communication
• Wearables enabling cyborg-like workers including scanners, smart glasses, voice devices, etc.
• Autonomous vehicle usages on private property, off public roads
• Semi-autonomous or smart industrial vehicles with operator assist technologies
• Predictive & Prescriptive maintenance applications and demand planning analytics tools
• The rise of AI & ML
• Automated load to capacity matching
• Real time visibility across the carrier networks
• Data democratization and utilization
Demand is the key driver in logistics, therefore, we must leverage demand planning and forecasting technologies to improve supply chain performance and execution. Advanced data utilization tools are now anticipating demand. AI and prescriptive analytics can automate demand planning decisions and will replace older diagnostic tools of the past.
The notion of a source-based or factory forward supply chain view is obsolete. The supply chain begins with and is driven by demand. Without accurate demand planning, anyfinished goods inventory moved, whether industrial or consumer, is merely shifted in place or channeled, with greater risk of obsolescence in today’s multi-channel digital world. For example, yogurt comes in a vast variety of SKUs, flavors, sizes, and types. Fresh foods availabilityvia traditional supermarkets, newer alternate channel retailers, online, etc.and the consumer's insatiable appetite for choice and rapidly expiring products have created a new level of supply chain and logistics complexity.
The ROI for new technology spend is often justified by projected savings and efficiencies alone. However, if the VOC (voice of customer) is heard, then their satisfaction, food safety, employee retention, sustainability, and competitiveness in the industry will contribute to the total ROI
To keep pace, logisticians must become part of the integrated demand chain and data must drive everything. Data can only be utilized if it is democratized and readily available. Historically, data has been proprietary, unshared, locked down, aggregated for profit, and wasted. This is changing. Sensors, scanners, cameras, and other IIoT devices are becoming more agnostic and universal. Blockchain utilization is on the rise. 3PLs are recipients, producers, and custodians of data. Clients need to know their private data is secure while still being capable of making data visible to appropriate parties in real-time. Blockchain technology will potentially solve these multi-dimensional supply chain privacy challenges.
Within the food industry, highly collaborative partnerships between leading producers of food and retailers are forming within the IBM Food Trust ecosystem. This ecosystem and its members use blockchain technology to improve transparency, standardization, and efficiency throughout the food supply chain. http://www.ibm.com/blockchain/solutions/food-trust Consumers will ultimately benefit from food integrity and safety. With full deployment of blockchain technology, the movement of unsafe food will be prevented. Hold and recall communication and stop-ship executions will happen immediately. What previously could take weeks or longer to diagnose and make actionable will be executed in real-time. However, full deployment and functionality seems a long time away.
Dr. Brian Gibson, Executive Director of Auburn University’s Center for Supply Chain Innovation suggests: Blockchain is an enticing technology for the fresh produce industry. It has the potential to help companies address the foundational challenges of product safety, waste, traceability, and supply chain efficiency. However, it is not a guaranteed game changer and deployment is not imminent. Gartner, the global research and advisory firm, predicts blockchain will not achieve its full productivity potential in supply chain management for more than ten years.
3PLs should adopt blockchain readiness strategies. However, many 3PLs currently provide SaaS solutions, integration services, and customized tools to aid in the access, harnessing, normalization, and visualization of data drawn for multiple sources and technologies. Some of these technologies are proprietary, created and owned by 3PLs, while others are sublicensed or shared. Traditional EDI connections are shifting more to API and 5G connectivity with the continuous flow of IIoT data enabling the continuous flow of goods. Best in class logistics providers utilize technology to provide real-time visibility to physical location, the flow of goods, condition, environmental surroundings, and ETA.
Sarah Ruffcorn, COO of Trinity Logistics offers the following thoughts:
It has become increasingly more important that we quickly research, pilot, and deploy new visibility technologies such as Fourkites, P44, Trucker Tools, MacroPoint, as well as have in place direct integration from ELD providers to provide both shipping customers and carriers options on how, and in what programs, they want to send and receive information. As a logistics solutions provider, it is our job to not just provide capacity solutions, but to allow more visibility to our shipping customers and integrate directly and seamlessly into their systems for their customers to have the best experience and grow their business.
CSCMP’s (Council of Supply Chain Management Professionals) Annual State of Logistics Report states:
For all shippers, talent and specialized insight can be hard to find, the right IT infrastructure may not be cost-effective or implementable, and an agile culture is often difficult to adopt. Thus, gaps between external requirements and internal capabilities are increasingly being fulfilled by third-party logistics providers (3PLs)
Collaboration allows for maximum technology utilization and innovation. Partnerships between technology providers, 3PLs, and clients with a progressive mindset will be instrumental in catalyzing the industry’s adoption of this tech. It is critical that we evaluate the status quo, strive for a better process, and push the limits of our capabilities to provide the best service for our customers.
The ROI for new technology spend is often justified by projected savings and efficiencies alone. However, if the VOC (voice of customer) is heard, then their satisfaction, food safety, employee retention, sustainability, and competitiveness in the industry will contribute to the total ROI.