How is Technology Shaping the Future of Logistics?
Technology impacts some industries more than others. Logistics—with its interconnected and interdependent transportation, warehousing, inventory prediction and fulfillment, supply chain management and shipping routines—is among the fields experiencing significant changes and improvements due to technological innovations.
What better time to explore the industry’s changing complexion, and the impact technology is having throughout operations, than on National Logistics Day? June 28th marks the occasion honoring the sector’s intimidating demands.
Planning, coordinating and managing the flow of goods from origination to destination includes numerous related components. In addition to packaging, storage, transportation and distribution, logistics professionals must also manage inventories, forecast demand and accommodate disruptions ranging from political upheaval to natural disasters. It’s a tall order but a challenge well suited to technological innovation.
In many fields, new technologies often prove helpful by enabling incremental efficiency gains, productivity tweaks, ancillary operational enhancements and marginal cost improvements. But in sectors like logistics, a field possessing so many complex and interwoven relationships, dependencies, processes and systems—of which transportation and warehouse management systems (TMS and WMS, respectively), supply chain management (SCM) software and other inventory planning and management platforms play such an important role—technical innovations have outsized impacts, and those impacts are assisting process and workflow breakthroughs.
There are, in fact, so many innovations arising that are affecting logistics and related sectors that it is difficult to claim that any one or two new technologies are leading the charge. At least seven innovations are shaping the future of logistics. Here’s a look at each.
Robotics and the automation of common processes are among the developments having an outsize impact within the logistics industry. Whether picking, sorting or packing within warehouses, moving inventory within or between distribution centers or transporting goods and equipment via self-driving vehicles and even drones, automation and robotics are improving production pace while also reducing error rates. That’s a compelling combination that also assists lowering costs long term.
Considering robots improve safety by readily performing tasks—including working within high-traffic areas and lifting and moving heavy items—often considered dangerous for humans, automation’s benefits become even clearer. Automation’s benefits are adding up, subsequently, which helps explain why Amazon is using robots within warehouses, UPS is delivering packages via drones and an autonomous cargo ship has already successfully completed a 500-mile voyage.
Artificial Intelligence (AI)
Along with its close cousin machine learning (ML)—in which systems continually learn, identify patterns and apply information from previous experiences to improve accuracy, performance and outcomes—businesses are adopting AI solutions to bolster data analysis, better forecast inventory needs, predict supply chain issues, minimize delays, improve transportation schedules and optimize shipping routes.
FedEx, for example, is using AI to streamline ecommerce sorting operations, while ports are exploring adopting AI technologies to eliminate shipping container congestion. Providing another prime example, Maersk leverages AI and ML innovations to predict shipping container demand, a notoriously complex task for which AI and ML are well suited to assist.
Maybe you think of Bitcoin or Dogecoin when you hear the word blockchain. That’s understandable, as these virtual currencies rely upon a distributed and decentralized network to maintain and protect records of transactions. The corresponding data is stored in blocks linked in a chain, hence the name. Due to the data being stored across numerous computers, the records cannot be altered without impacting all the corresponding blocks. Corresponding encryption, combined with a distributed ledger that’s based on consensus, helps further secure the technology.
Logistics companies are subsequently adopting blockchain to better track goods and transactions and improve supply chain dependencies. Blockchain technology is also helping reduce or eliminate laborious and manual paperwork processes and improve trust between various stakeholders that must work together across the industry to plan, pack, transport, warehouse and deliver products.
Walmart uses blockchain to track food products from the farms where the food is grown to its stores. Volvo (among others) has partnered with IBM to employ blockchain technology to confirm the responsible sourcing of cobalt needed to produce batteries. Those are just two examples.
Also known as big data and often associated with business intelligence (BI), which seeks to produce reports and make sense of large collections of information, analytics are another innovation helping shape both current and future logistics operations. Forward-thinking firms are collecting vast amounts of data—including information from radio frequency identification (RFID) tags affixed to pallets and shipping containers to various sensors and GPS and navigation equipment—and analyzing that information to surface patterns, forecast demand, predict goods and inventory requirements and streamline corresponding warehousing and transportation processes.
There are many benefits. Expenses decrease. Transportation schedules gain efficiencies. Inventory forecasts are more precise. Customer experiences improve.
Look at FedEx, for instance. The logistics enterprise is using analytics to optimize its transportation networks. UPS’ Harmonized Enterprise Analytics Tool BI platform, meanwhile, provides predictive analytics to deliver precise forecasts and even the ability to adjust how packages flow through its system based on current conditions. Further, DHL uses big data analysis to determine customer preferences and personalize service. Those are just a few examples of a growing trend.
Internet of Things (IoT)
At first, enabling Internet connectivity in a wearable or adding network connections to thermostats proved novel and added the convenience of being able to easily access information that was otherwise readily available. But the Internet of Things (IoT), or the practice of enabling objects to communicate with one another and management platforms, is changing the way businesses operate. Facilities Management Systems (FMS) permit centrally monitoring, managing and administering all the systems a typical building requires, including access controls, video surveillance, HVAC systems, lighting and power needs, and it works in large part thanks to IoT developments.
Many logistics firms, too, are embracing the opportunities IoT interconnectedness enables. Because products, boxes, pallets, unit load devices (ULDs), containers, trucks, trains and ships can all be connected and communicate with one another, the challenge of tracking, in real time, the location and movement of products and shipments is simplified. Accuracy improves, too, as does reporting for any delays or other issues. As a result, logistics companies can more precisely optimize shipping routes and schedules, enhance fleet management processes, more accurately predict inventory demand and better manage warehousing and supply chain needs.
Nippon Express uses IoT technologies to monitor not just the location of its cargo but also the condition. The move helps confirm goods are safe and secure, an important consideration for pharmaceuticals, for example, throughout transportation and storage stages of delivery. Maersk, no stranger to adopting leading technologies as observed earlier, leverages IoT to help track its shipping containers, subsequently improving accuracy of its supply chain components, which helps reduce overall costs.
The practice of adopting cloud-based systems to share and apply information from a variety of sources further enhances using data gleaned from IoT strategies. Cloud computing also encourages integrating new technologies, such as AI- and ML-enabled solutions. So, too, is the traditional collection and processing of information, changes, adjustments, forecasts, conditions and needs so necessary and common within the logistics industry enhanced when cloud-based platforms possess real-time data. The accessibility of cloud systems permits analyzing and applying information from a variety of other software programs in intelligent and useful ways that can then be used to improve tracking, make more effective decisions and produce better outcomes.
Tapping cloud systems enables logistics firms to improve coordination and collaboration, including across geographically dispersed teams operating in different time zones and employing different software tools. Due to its scalable nature, cloud computing also assists rapidly adjusting to changes in demand with little to no advance notice.
Maersk, as an example, uses Microsoft’s cloud computing services to ensure its supply chain operates without problems. Collecting data from hundreds of vessels—including load status and location information—and digitizing processes typically performed on paper, helps accelerate the inflow of accurate information, which assists eliminating bottlenecks and holdups. DHL, too, employs cloud computing, as must most every logistics firm to remain competitive. In DHL’s case, cloud services assist its customers in advancing their own sales and business strategies by improving ecommerce cost-effectiveness by enabling digitization and automation opportunities, scalability and shipment tracking.
Augmented Reality (AR)
Just how does a technology many associate with game playing impact businesses? Augmented Reality (AR), which some likely equate with bulky virtual reality headsets of the past, is proving surprisingly effective within the logistics industry. Firms have discovered the technology reduces costs and improves learning experiences when conducting training.
Warehousing is just one sector of the industry that’s benefitting. Using sleeker equipment, such as AR-enabled glasses, than that used in the past such as to play Sony PlayStation Virtual Reality (VR) games, firms are improving picking processes and reducing error rates by providing AR-powered immersive training that better replicates production environments. Superimposing a virtual environment onto a physical view assists employees in locating specific objects and learning to navigate sprawling storage facilities more safely and without wrong turns or using inefficient routes.
Global logistics providers DB Schenker, DHL, UPS and FedEx are among those testing or employing AR technologies. These firms are employing the technology specifically to improve warehouse efficiencies, driver safety and even retain employees.
Is your organization struggling to optimize its logistics processes? Call Louisville Geek at 502-897-7577 or email [email protected] if you have questions regarding how your firm might incorporate new technological innovations within its own logistics operations.