Technology is giving the logistics industry a makeover. Mobile phones power the sharing economy and warehouse management systems (WMS) drive productivity. As online shopping continues to grow, carriers and e-commerce retailers are investing in new technologies to make the supply chain more responsive. 72% of shippers are investing in enterprise resource planning software and 67% of third-party logistics companies (3PLs) are investing in WMS according to the 2019 Third Party Logistics Study.
Though the use of technology will give businesses a competitive advantage, for some, this advancement will disrupt the logistics industry. PwC reports that 68% of transport & logistics CEOs expect changes in core technologies of production or service provision will be disruptive to their business.
Technology in the Logistics Industry
In this article, we will introduce you to the latest technology trends and show you how they are revamping the logistics industry.
Today’s consumers want fast delivery at low costs. 20 to 25% of consumers would pick same-day or instant delivery if it were available at low prices. And 55% of consumers will switch to a competitor if that competitor offers faster service.
To optimize operations, ensure speedy same day delivery, and reduce costs, e-commerce retailers and carriers are testing self-driving vehicles in public spaces. Walmart, automaker Ford Motor Co., and Postmates are collaborating on a pilot program that will use grocery delivery vehicles driven by humans to help evaluate how self-driving vehicles might be used for such a service. Similarly, DHL is testing self-driving delivery trucks.
Self-driving vehicles are environmentally friendly and offer significant cost savings due to better fuel efficiency and reduced labor costs. However, legal, privacy and security concerns remain a hindrance to the adoption of automated vehicles. Despite the current technical, regulatory, and societal hurdles to the uptake of driverless vehicles, there is no doubt that self-driving vehicles will change the world of delivery.
Big Data Analytics
Big Data and logistics are made for each other. Research from a 2017 3PL study states that 98% of 3PLs and 93% of shippers believe data-driven decision-making is essential to supply chain activities. Consequently, carriers and e-commerce retailers are using Big Data analytics to gather insights on how to improve operational efficiency and customer experience. Here are two ways businesses in the logistics industry use Big Data analytics to improve service offerings and gain competitive advantage.
1. Anticipatory Shipping
With consumers expecting brands to deliver hyper-personalized experiences, Big Data analytics allow e-commerce retailers to analyze their customers’ purchasing behaviors, predict an order before it occurs, and make delivery arrangements. One brand using Big Data analytics in this manner is Amazon. The e-commerce retailer filed a patent for an “anticipatory shipping process” that will ensure popular items remain in an effective limbo to cut down on fulfillment times.
2. Real-Time Route Optimization
Big Data analytics allows carriers to predict the best route options for their customers, estimate time of arrival, and schedule assignments in real time through the intelligent correlation of data streams such as shipment information, weather, and traffic. Already-efficient 3PL firms are finding that, in some cases, new routing powered by connectivity and analytics can produce efficiencies of up to 25%.
Harnessing the full potential of Big Data will require the integration of structured and unstructured data, first party data, and the consideration of data protection and privacy issues.
No longer the stuff sci-fi movies are made of, artificial intelligence is transforming how carriers operate as a result of the ongoing trend towards automation and continued improvements in computing. With the need for more hands and the rise in e-commerce delivery, online retailers like Alibaba and Amazon are equipping their warehouses with robots to boost productivity and cut costs.
Another application of artificial intelligence is in customer experience. As consumers get comfortable with voice technology, e-commerce retailers and carriers are leveraging smart speakers to improve and personalize the customer experience. Conversational interfaces such as Amazon Alexa can help customers get real-time updates on the status of package deliveries, enable rescheduling, and notify them of any delays. For instance, customers with an Amazon Echo speaker can ask DHL where their parcel is and receive shipment updates by speaking their alphanumeric tracking number.
Artificial intelligence offers carriers the ability to optimize network orchestration to degrees of efficiency human thinking alone cannot achieve. However, to apply artificial intelligence effectively, it is helpful to examine best practices from other industries. If you are considering getting a warehouse robot, look for one with a built-in system intelligence to minimize the need for complex skills development and in-depth training for your workers.
Internet of Things
The Internet of Things (IoT) is creeping into logistics. DHL states that IoT has the potential to generate up to 1.9 trillion USD in additional value for the international logistics industry by 2025. Among the various use cases for IoT technology in the logistics industry, cloud chain is one area that will benefit from it. Temperature-controlled goods such as perishable groceries and pharmaceuticals require special processes, innovative cold chain packaging, fast networks, and optimized infrastructure to ensure product integrity.
To handle the requirements listed above, gain greater control over cold chain shipments, and have end-to-end visibility of perishable products, retailers need to integrate IoT enabled solutions with cold chain logistics. IoT enabled solutions measure the temperature, humidity, shock, vibrations and other parameters of cargo during the shipping process and ensure shippers and carriers receive real time notifications should conditions become compromised.
Using IoT sensors that are monitored through the DHL’s centralized control tower, DHL’s SmarTrucking solution provide real-time temperature and consignment tracking for perishable goods. Information alerts and status updates are also sent to shippers through the SmarTrucking customer portal and mobile app.
If you are considering using IoT for cold chain, keep in mind that thermal packaging, in-transit monitoring devices, and intervention services drive up costs and require a dependable network of partners to ensure high quality standards.
The next big advance in logistics technology could be augmented reality (AR) that enables users to understand their surroundings by integrating contextual information into their field of view through smart glasses. The device provides visual displays of order picking instructions along with information on where items are located and where they need to be placed. This frees pickers’ hands from paper instructions and allows them to work efficiently. DHL’s vision picking deployment carried out with AR led to a 25% performance increase.
Additionally, AR devices can display task information, read barcodes, support indoor navigation, and be integrated into warehouse management systems for real time operations. Furthermore, workers equipped with smart glasses can check if a shipment is complete by scanning markers on parcels, and load cargo in the right sequence to reduce the risk of damage.
Warehouse associates can also use head mounted displays (HMDs) to improve their picking accuracy and productivity. HMDs place holographic images and instructions over an associate‘s field of view and allow him/her find items quickly.
For safer and smarter driving, head-up displays can be used to project virtual layers of navigation information and highlight road hazards to the driver.
While augmented reality can improve productivity, its integration into existing warehouse management systems (WMS) requires new standards and interfaces. Additionally, AR devices need battery packs that provide enough power for at least one entire work shift, and third party integration to enable industrial scanning and voice recognition.
The Future Belongs To Those Who Act Fast
In order to exceed the expectations of their customers and improve their position in the marketplace, innovative e-commerce retailers will adopt these technologies. Open and web based APIs will form the basis of on-demand cloud logistics services, and replace outdated legacy communication systems. Beyond bitcoin and ledger technologies, Blockchain is another technology that will facilitate trust and transparency between supply chain stakeholders, improve traceability and transparency, and automate commercial processes.
Logistics technology is important, but it is not a substitute for humans. Equip your team, train them on how to use these technologies, and retain them by providing attractive employment conditions and establishing a culture of innovation, collaboration and recognition.