Digital transformation can have a massive impact on a logistics sector that is worth around 14 percent of GDP in the European Union and is responsible for around a quarter of greenhouse gas emissions. EU research claims that just a 10 percent improvement in efficiency in the logistics sector could deliver a €100 billion benefit to European industry.
Here are five technologies that promise to play a part in its digital transformation:
1. drones for just-in-time delivery
Drones in logistics have been hot news. An MHI survey claims 20 percent of logistics organizations will be using drones for monitoring, searching, and event management activities by 2017.
DHL has already begun using drones for logistics. The company’s unmanned aerial vehicle (UAV), ‘Parcelcopter’, began delivering urgent medical goods to the German North Sea island of Juist last year, travelling the 12 kilometer journey independently in 15-30 minutes depending on conditions. The drone delivers medication to order for the island’s pharmacy, illustrating the potential for UAVs to become part of “just-in-time” fulfilment.
Drones can’t do everything, of course. Renowned logistics academic Alan McKinnon warns that range, cost (including energy costs), security and lack of backloading (deliveries for the return leg) will limit the application of the technology. But drones clearly have wide potential for delivery of small, high-value and essential items, such as blood supplies and medication.
2. sensors and the Internet of Things
Up to 50 billion connected devices are estimated to be in use around the world by 2020. This connected planet will open up new opportunities in every industry, including logistics. These smart connected chips can carry a host of data, such as technical requirements, customers, and destinations.
For example, connected palettes and long distance freight crates will make it easy to track shipments as they travel, or find products once they are warehoused. They will help warehouse workers pick products for despatch and could even help manufacturers effectively manage product support and recycling once they approach end of life. In time much of the management of the logistics process could become semi-autonomous.
Asset tracking of connected shipments should help improve freight management, and connected vehicles and logistics means it should become easier not only to find and track your fleet, but to assess when vehicles are likely to need service or maintenance or if products have been poorly handled.
3. big data provides power and control
Big data can improve traffic management by helping logistics providers manage and understand the huge data sets created by millions of shipments that are tracked every day. “The ‘Internet of Things’ is going to provide a whole new level of data that will give shippers far more power and control,” said John Manners-Bell, CEO Transport Intelligence.
Properly structured and accurately analyzed, this data can unlock new logistics opportunities. Analytics may reveal hidden non-direct routes to manage distribution, particularly when handling complex distribution chains in order to exploit spare capacity. Analytics should also add resilience to supply chains, enabling them to be quickly reconfigured in response to risk or emergency. For example if more of a particular item is required, analytics can reveal what transportation assets are in any specific area at a particular time, or reveal alternative routes for multiple vehicles if key roads are out of action.
Big data can also help logistics in terms of predicting likely demand – a provider of barbeque equipment, for example, may be able to use weather data to assess and prepare for demand to spike on the first sunny day of spring.
4. wide role for wearables
Wearables have a huge part to play across the logistics and supply chain. Think about wearable devices that manage deliveries, help warehouse workers locate required items fast or even wearable devices capable of automatically interrogating maps and road traffic to find the best possible routes.
The powerful promise of using wearable devices to track, monitor, analyze and incentivize the logistics supply chain is an immediate game changer for all parties. Tesco warehouse staff use wearable armbands for management and product picking. Workers use these bands to navigate the warehouse to select products, and are assigned products to collect (and quotas to meet) using these systems. Check out this Real Times story to see how Active Ants is testing wearables in its warehouse.
5. self-service with 3D printing
3D printing promises on-demand production of individual items on a local basis as and when they are required, meaning some items no longer need to be mass-produced at remote sites. In this model the software becomes the most important component and production moves to a later point in the lifecycle, usually at the customer’s premises or at a high street 3D shop.
3D printing also opens the doors to the digital warehouse. They are locations that become virtual storing CAD files in order to 3D print spare parts on demand, as and when they are required. Consumers may order a product from the warehouse that will dispatch the request to its network of 3D print shops for output.
Estimates claim up to 30% of finished products already involve some kind of 3D printing. This could reach up to 80% by 2020. “Instead of fully taking over the future, however, the most likely outcome is that 3D printing will take its place alongside traditional production technologies, rather than replace them,” said Darren Travers of IT solutions provider for trade and logistics, AEB International.