4 Digital Trends in Logistics to Increase Supply Chain Visibility
In transportation solutions and in warehouses, complexity creates challenges.
From manufacturing facilities — often located half a world away — to distribution centres and, finally, to consumers, logistics specialists must figure out how to store, track and move goods efficiently and affordably. As if this task wasn’t complicated enough, Covid-19 restrictions increased the demand for e-commerce deliveries, putting additional pressure on the logistics sector. There is a silver lining, though, the pandemic has driven digital transformations in logistics.
To cope with increased workloads and demand for better tracing information, companies are leveraging advanced technologies and approaches. MadAppGang specialises in modern, scalable, and resilient software, so we’re always on top of the latest digital transformations. We have a particular interest in solutions for the logistics industry and have created software such as Atlas, an innovative navigation app for truck drivers.
Here, we review digital trends in logistics that are improving work processes and increasing supply chain visibility. We’ll also cover the fastest and most efficient way to implement these technologies.
Technology trends in the logistics industry
At the time of writing, the logistics and technology communities are discussing at least a dozen technological trends for logistics. Here are the major and most pertinent trends for 2022 and beyond:
AI-based logistics planning
Artificial intelligence (AI) has quickly become one of the world’s most influential technologies. It’s ability to leverage big data has completely overhauled older traditional data science methods, increasing business efficiency and enabling high levels of automation and accurate forecasting.
In logistics, AI can be used for various purposes:
- Route planning – AI algorithms help plan cost-efficient routes, taking into consideration the number of gas stations, fuel prices, and facilities for wholesome drivers' recreation. Real-time route updates help avoid traffic jams, maintain constant connection with the office, and increase visibility into workflow processes.
- Demand forecasting – Forecasts are based on real-time data taken from demographic statistics, weather, online reviews, and other sources. It's also possible to make automated demand predictions at different levels — from global to store levels, or from a local store to a region (for example, IKEA's demand sensing tool) — to get relevant products at the appropriate location and time.
- Warehouse automation – In addition to automating routine tasks such as inventory and data collection and analysis, AI also makes it possible to use robots and self-driving cars in warehouses.
Another digital trend in logistics is blockchain. In spite of blockchain's overhyped reputation, it can bring practical value to logistics companies. In a nutshell, blockchain is a way to maintain a decentralised record of data across a network of peers. Information stored in this manner cannot be altered. It's a very safe method of storing data that resolves any trust issues in collaboration.
As long as it's properly built, a blockchain platform serves as a reliable transaction ledger. Companies that partner with vendors or use 3P (Pipeline, Petroleum & Precision) services can use this technology to share sensitive information without worrying about it becoming corrupted or leaked. Nevertheless, digitisation, standardisation, and data cleansing are necessary for this to happen.
Reducing workflow complexity is another good use of blockchain in logistics. The trust level of the system makes it possible to work without intermediaries. Smart contracts and programs that run when predetermined conditions are met allow the automation of some routine tasks (payments, invoicing, cargo checks, and more) with minimal safety risks.
IoT for asset tracing and tracking
Tracking tools and vehicles is critical for every business, but for logistics it’s paramount. Such monitoring, known as asset tracking, is normally performed by supervisors declaring that an asset arrived at a given location. This way of doing things isn't always efficient. Time-consuming and prone to human error, this method of tracking can lead to big losses, especially in large companies.
Modern technologies have come to the rescue. Using Internet of Things (IoT) technologies, companies can reduce loss risks, improve inventory management, and gain real-time data insights. IoT asset tracking uses sensors and cell tower triangulation, GPS or Wi-Fi to identify the location of valuables. The system then gives real-time updates on goods and properties through smart algorithms and connected devices.
IoT usage in logistic transportation. Source: Researchgate
IoT tracking and tracing systems help keep track of equipment and goods at every step of the supply chain, starting with the assembly process until delivery. With an asset tracking tag attached, items can never go astray. A company's inventory and products are then better managed, and its supply chain is more visible. Inventory updates are completed faster and losses are minimised, too.
Supply chain-dependent companies have been turning to cloud solutions for transport management systems since the mid-2010s. In distribution centres (DCs), however, moving to the cloud has been slow. Not only due to the complexity of warehouse management systems (WMS), but also because such systems are crucially important. Many enterprises had a misconception about the speed and reliability of cloud-based solutions. Besides, clouds, especially public ones, were regarded as poorly protected, so there were additional security concerns.
In the 2020s, the situation changed. Cloud technology has proved to be highly secure. The advantages of cloud-based solutions — real-time pricing, inventory control, data synchronisation, and more — outweigh any potential risks. Moreover, inspiring examples of cloud-based WMS implementation (Caterpillar, Maersk Logistics, Toll Group) have demonstrated that this shift allows organisations to offload exhausting tasks like maintenance, infrastructure administration, and timely upgrades of on-premise software.
These days, cloud-based WMS is not only a trend, but a competitive necessity. Experts predict that the number of companies using cloud-based management systems will rise significantly. Just look at growth forecasts for the WMS market: the sector is expected to reach US$8.1 billion in 2028, up from US$3 billion in 2021.
How to bring innovation to your logistics company
Cloud computing serves as the engine for any new technology in the logistics industry, just as it does for cloud-based WMS. However, simply rehosting your management program is not enough. The only way to reap all the benefits of the cloud — resilience, scalability, and readiness for advanced technologies — is to redefine the architecture of your existing software and development framework, making both cloud-native.
Several logistics companies have already implemented the cloud-native approach with success. Kings Transport, a provider of on-demand courier, taxi, and fleet services, was one of the first companies in Australia to move to the Google Cloud Platform. Here's what Kings Transport's general manager of technology, Travis Timms, commented: “By moving to Google Cloud, we reduced administrative tasks by 10%. Google Cloud automatically takes care of software patches and firmware updates, so that’s one less thing we have to worry about from a system admin point of view.”
The workflow of cloud-native app development. Source: Cloud Google
The cloud-native approach requires time, dedication, and investment. And as there’s a need for a revised app structure and changes to the business model (domain-driven decomposition, Agile), the expertise of experienced professionals is essential.
You can rely on MadAppGang for consulting, helping your in-house team, or engineering a logistics application from scratch. Our team combines modern cloud technologies, processes, and services to produce results that add real value to your business. In addition to developing advanced logistics software, we can also help you optimise your costs and align your processes to the cloud-native culture. Reach out and let's empower your enterprise with all the logistical advantages of the cloud.