How Technology is Transforming the Logistics Industry

Logistics has become a necessity for every segment of the industry. As the innovation takes center stage, the supply chain is increasingly becoming dependent on digitalization. Currently, every single day accounts for almost 85 million packages being delivered globally. Two major reasons behind the immense growth in the logistics sector are the e-commerce boom and an increase in worldwide demographics. Logistics can be from any niche like transportation, manufacturing, information, distribution, storage, marketing and many more. They play a significant role in optimizing customer services and reducing costs. Hence, supply chains also need to be optimized through digitalization. Digital technology is bringing about a big transformation by increasing efficiency and reducing the consumption of energy.

Ways in Which Technology is Transforming Logistics Industry:

Implementing digital technology in an industry requires proper optimization and prioritization of goals. A 2018 survey across Chief Information Officers in transport and logistics highlights what are their priorities. Improving business efficiency and enhancing customer experience are two essential goals with 68% and 61%, respectively. Here's how digitalization is transforming logistics:

Automation and Artificial Intelligence

The World Economic Forum has estimated a great transformation of the logistics industry. Research shows that Artificial Intelligence is estimated to increase the logistics sector's market value to $6.5 billion until 2023. Logistics is increasingly adopting AI and automation in various daily operations. Warehouse robots are traveling from one department to another to keep a check on inventory being introduced. Additionally, bar-code scanners and deliveries by drones are also being implemented. AI is of immense significance in optimizing supply chains. It helps in rationally planning the optimal transportation routes through various AI algorithms. Daily tasks also get convenient as operators can easily connect packed goods with vehicles to transportation hubs.

Data Analytics and Internet of Things

Data Analytics is powered by Big Data that enables stakeholders in making well-informed decisions. These analytics help logistics personnel in anticipating busy cycles, shortage of supply, and many other important insights. 90% of firms dealing in third-party logistics agree that data-driven decisions prove extremely beneficial to supply chain operations. Apart from improving quality of performance, it helps in forecasting demand and supply and managing inventory and workforce. IoT is transforming the logistics trends by enabling the managers in overcoming many obstacles. Problems like delayed transportation, operating errors, inefficient cargo monitoring, and thefts are now being solved. Supply chain management is going to enter the next generation. This will enable logistics creating leverage with edge computing to generate real-time insights.

Route Planning and Vehicle Tracking

Modern devices work on 5G and IoT through which operators can track their deliveries on a real-time basis. IoT is usually referred to as the science of Telematics in the transportation realm. The study shows that the next five years could see an estimated IoT direct economic impact of $1.9 trillion. Additionally, some areas where there are low connectivity issues like basements can benefit from IoT deep insights. IoT enables establishing a connection between hardware, software, and infrastructure. Facilitation of data exchange makes it possible to track any object like vehicle, cart or inventory. GPS trackers for on-boarding, laziness detectors, fuel sensors, smart warehouses, wearables unmanned delivery devices like drones and self-driven trucks are expected to increase inventory accuracy.

Digital Backups of Supply Chains

The benefits of digitalization for the companies in the logistics sector will increase their value up to an estimated $2.4 trillion. The digital sensors embedded across every process and equipment of business help the managers in optimizing the operations. Now, any indefinite crash in the main system can lead to a loss of crucial data. Plus, it would also lead to downtime. Digital innovation provides a cloud solution to this problem. Managers can now have a digital backup of data in the cloud storage by pairing and synchronizing their assets with digital codes. Regular backups can help in creating digital twins of all the logistics processes. This would help managers in saving the data and preventing the interruption of work flow. Plus, it would also lead to reduced chances of an abrupt network failure. Additionally, the sensors track every process and that data is relayed back to the operators. They can use this information to create better opportunities and tightening the processes in the future.

Cryptocurrency and Blockchain

Cryptocurrency such as bitcoin enables a seamless international transaction procedure and maintains the customers' privacy. Additionally, Blockchain helps in maintaining transparency. Customers can witness the whole journey of a shipment from where it takes off to the destination. It also increases security by detecting any attempted fraud or theft. Studies show that total expenditure on Blockchain is expected to reach $11 billion by 2022. Every stakeholder from a manufacturer to an auditor can establish transparency through Blockchain. Transaction records, asset tracking, and document management can be done more efficiently. Smart contracting like digital contracts capable of self-execution can help in automating the processes. It also eradicates human errors and bureaucracy by electronic storage of documents.

Chatbots and Cobots

The implementation of Chatbots is used for interacting with customers on a real-time basis. Chatbots are being developed to replace human representatives as they are capable of performing specific actions at different phases of a supply chain. Customers can communicate with them and get their queries solved regarding orders, routes, and timings. Additionally, Collaborative Bots (Cobots) are being introduced that are capable of performing both warehouse and delivery operations. Robots-as-a-Service simplifies performance measurements. Logistics service providers evaluate the performance with business-specific Key Performance Indicators. Robots can simplify the analysis of quality, production and cash cycles, inventory capacities through these indicators.

Wrapping Up

Digitalization and cloud implementation have one major benefit of reduced costs. Apart from that, logistics can recover from disasters and form a contingency plan with predictive analysis. Through Cloud services, managers can access data from anywhere. If inventory from one warehouse is not accessible, the synchronized data enables in instantly accessing that data. Different geographic locations can be connected over supply chains and reporting becomes convenient. Digitalization increases the accessibility of data which eventually helps in improving the availability of remote employees. Additionally, it puts customers in the driver's seat as it helps in securing their privacy. Also, these innovations are driven by customers' behavior and feedback. And this only results in improving the efficiency of a business.