Technologies are changing the Logistics Picture

Stephen DeAngelis

March 26, 2018

Supply chain professionals are like the military’s special forces. Each day they battle to beat competitors while simultaneously trying to win the hearts and minds of customers. According to Steve Geary, President of the Supply Chain Visions family of companies and Chief Operating Officer at ROSE Solutions, logistics is the key tool in the supply chain professional’s kit. He explains, “Sun Tzu said, ‘The line between disorder and order lies in logistics.’ That idea is as relevant today as it was when he wrote it twenty-five hundred years ago.” Another term for disorder is turmoil, which is defined as “a state of great disturbance, confusion, or uncertainty.” The last things a supply chain professional needs or wants is disturbance, confusion, or uncertainty. Fortunately, a number of technologies are emerging to help eliminate these undesirable situations. Kushal Nahata (@kushalnahata), co-founder and CEO of FarEye, asserts, “Technology has disrupted every industry and supply chain is no exception. With the advent of digitalization, the logistics and supply chain industry is getting a complete makeover.”[2]

Emerging Logistics Technologies and Trend

“As logistics becomes the backbone of every industry like retail, e-commerce, consumer goods, and healthcare,” writes Nahata, “the business world today is aligning its strategies with respect to the ongoing and upcoming logistics trends, such as robotics, artificial intelligence (AI) and machine learning algorithms.” Below is a discussion of how these technologies and trends are changing the supply chain.

Robotics

Robotics is a big field covering everything from physical robots in a warehouse to back office robotic process automation. Nahata believes technologies currently considered novelties, like drones and augmented reality, will have significant supply chain impact in the years ahead. He explains, “With automation and mobility being part of the support system to compete with and hopefully stay ahead of the competition, smart glasses and drones will help drive logistics performance to next level.” Bill Meahl, chief commercial officer at DHL, believes autonomous vehicles will also play an increasingly important role. “We may still be a long way away from a future where trucks and ships will be controlled by artificial intelligence (AI) alone,” he writes. “But even so, preparing for a future that is more reliant upon autonomous vehicles should remain a priority for corporations that employ vast fleets across multiple geographic regions. Failure to plan for this eventual inevitability would be a mistake for players in the logistics industry.”[3] The ultimate goal for some supply chain professionals is an autonomous supply chain. Hellen Oti-Yeboah (@hellenoti), Marketing Manager at Arkieva, predicts, “The autonomous supply chain will be driven by technologies that are now in early proof of concept stages. Some of these disruptive technologies include Uber’s self-driving truck, Amazon’s drone delivery within 30 minutes or less, and various robotic tasks that are currently replacing mundane tasks at assembly lines, warehouses, and industrial farming environments. … These disruptive technology tests and implementations demonstrate the shift towards an autonomous supply chain in upcoming years.”[4]

Cognitive Technologies

Without cognitive technologies, the autonomous future imagined by some supply chain professionals would not be possible. In the years ahead, cognitive technologies will be leveraged by more and more companies. In another article, Nahata predicts, “By 2021, 25% of large global companies will be piloting or using artificial intelligence automation in transactional procurement.”[5] Sawaram Suthar (@sawarams‏), Chief Marketing Officer at Tagove, adds, “AI is used by several companies as part of their supply management strategies. … This trend will continue to be positively-exploited throughout 2018.”[6] Victoria Brown (@VJABrown), a technology analyst at IDC, agrees cognitive technologies will be embraced by the supply chain sector. “By the end of 2020,” she predicts, “one-third of all manufacturing supply chains will be using analytics-driven cognitive capabilities, thus increasing cost efficiency by 10% and service performance by 5%.”[7]

Blockchain

Transparency is becoming increasingly important in supply chain operations and trust has always been important. Blockchain can help both areas. Nahata explains, “With the security and transparency blockchain offers, it offers an impenetrable way to store and share transactional data, while improving credibility with foolproof transactions.” Heidi Vella (@Heidivel‏) adds, “An inherent ability to allow more secure, transparent and easy tracking of transactions and objects has piqued interest in blockchain among global supply chains. … Beyond tracking containers, the cryptography-secured online ledger that blockchain provides, paired with electronic tracking technology, could also prevent product counterfeiting and fraud, putting an end to scams like the 2013 horsemeat scandal or more recent reports that real cat fur is being sold on the high street as faux fur.”[8]

Last Mile Delivery

Nahata writes, “If the customers were not already spoiled for choices in terms of buying portals, products and crazy discounts, they will also have the option to choose among logistics providers to receive their shipment by. There were only a handful of e-commerce companies offering this feature in 2017 but the trend will pick up in 2018.” Cathal Doyle (@CathalDoyle) adds, “The final delivery to customers — known as the ‘last mile’ — remains the most complex and difficult part of the supply chain to optimize. As the number, sizes and densities of cities increase, delivery operations will become ever more complex.”[9] In the years ahead, customers may see their packages delivered by specialized vans, drones, or autonomous vehicles, all of which will powered by electric motors. David Z. Morris (@davidzmorris) reports, customers may also see their packages delivered by their friends and neighbors. He explains, “The world has a package problem. Deliveries of everything from Nike sneakers to Spider-Man figurines are expected to double to 25 billion annually in the U.S. within 10 years. But delivery trucks are already choking city streets and adding strain to overburdened highways. Proposed solutions, like delivery drones and sidewalk-hogging robots, are splashy, but years away from going mainstream or difficult to scale. Roadie, Atlanta-based startup, thinks there may be an answer right in front of us (or more precisely, beside and behind us): The empty space in the millions of cars and trucks already on the road. Instead of summoning a driver to ferry your package to its destination, Roadie recruits drivers who are already headed in the right direction to make the delivery. … Letting your neighbor deliver your new laptop seems unlikely to completely replace professional delivery services. But it could become one part of a much more complex delivery landscape.”[10]

Adaptable Logistics

Some people wrongly interpret Charles Darwin’s survival of the fittest theory to mean survival of the strongest. In fact, the fittest species are the not the strongest but the most adaptable. The same is true for supply chains. Nahata notes, “Elastic logistics refers to the flexibility to expand and shrink capabilities to align with the demands within the supply chain during a given timeframe. Flexible automation solutions increase the agility and elasticity of the logistics infrastructure to cost effectively meet market fluctuations. It is not a ‘one size fits all’ solution. However, it provides a customized answer to requirements like cost control, warehouse management, geographic restrictions, distribution channels, priority deliveries, and much more.” Adaptability, flexibility, and optimization can all be improved by leveraging cognitive technologies.

Summary

Ramakrishnan Krishnan, Associate Vice President for Retail, CPG & Logistics industry segment at Infosys, writes, “Logistics enterprises can ensure the smooth flow of commodities and finished products over land, sea, and air. These enterprises function in a borderless world, connect the dots between the central hub and spokes, streamline processes, and ensure that Retail business users are empowered to make timely and informed decisions for logistics to function with clockwork precision. The catalyst for this synchronicity is the voluminous data harnessed during the journey of goods from origin to destination.”[11] Making sense of all this harnessed data requires leveraging the capabilities of cognitive technologies. Krishnan concludes, “Infosys strongly believe that AI-driven data analytical tools will help Retail logistics leaders aggregate customer demand and simplify distribution networks, while managing inventory.” Sun Tzu was correct, “The line between disorder and order lies in logistics,” and cognitive technologies helps ensure order.

Footnotes
[1] Steve Geary, “The line between disorder and order lies in logisticsDC Velocity, 2 January 2018.
[2] Kushal Nahata, “Trends That Will Revolutionize Logistics in 2018,” Material Handling & Logistics, 26 December 2017.
[3] Bill Meahl, “An Autonomous Future: What’s the Way Forward for Logistics?IndustryWeek, 17 November 2017.
[4] Hellen Oti-Yeboah, “7 Supply Chain Technology Trends Set to Disrupt Supply Chains in 2017 and Beyond,” Arkieva, 17 January 2017.
[5] Kushal Nahata, “Supply Chain Trends To Watch Out For In 2018,” Supply Chain Management Review, 1 December 2017.
[6] Sawaram Suthar, “5 Supply Chain Management Trends for 2018,” CXO Today, 23 November 2017.
[7] Victoria Brown, “Top 10 Worldwide Supply Chain Predictions,” IDC FutureScape, 7 December 2017.
[8] Heidi Vella, “Blockchain is strengthening links in the supply chain,” Raconteur, 23 February 2018.
[9] Cathal Doyle, “Game of drones: why going the ‘last mile’ is revolutionising how and why vans are made,” Life Motor News, 26 February 2018.
[10] David Z. Morris, “Why Empty Backseats May Be the Next Big Thing In Delivering Packages to Your Doorstep,” Fortune, 15 January 2018.
[11] Ramakrishnan Krishnan, “Big data and AI to reinvent retail logistics,” ReTales Blog, 26 December 2017.