Logistics has taken huge steps forward just in the last few years when it comes to technological and automation advances. In order to stay competitive, it’s become critical that organizations keep up in order to not only meet demand, but to exceed customer expectations. So what are the trends of the future? There are quite a few developments that will become more widely integrated within the logistics industry, so let’s dive into these trends.
IoT and Big Data
Logistics has come a long way with taking baby steps into digitalization and relying on it in order for operations to run efficiently and smoothly. Especially with the pandemic, operations were majorly disrupted for those who didn’t have access to critical data outside of their facilities. According to an STL Partners report, adapting 5G to the transport and logistics industry could add a gross value of $280 billion to the global economy by 2030. Most companies have more of a data-driven mindset for decision-making and as more markets adopt 5G, faster data speeds and reduced latency will only increase the number of IIoT devices that will be integrated along the logistics supply chain. Yes, adopting 5G has its own challenges still, but with 4G, there is an issue with limited space for connected devices – not with 5G. For every meter of coverage, 5G can support over 1,000 more devices and 100 times faster. Smart devices will be able to communicate even faster than before and closer to real-time for critical decision-making and open up opportunities for new use cases and applications that are more time-sensitive. Without question, 5G is one of the biggest enablers to facilitate data-driven analytics and many types of artificial intelligence (AI). If your organization isn’t on board with integrating smart devices to gain critical insights into operations, it will be quite difficult to see a lot of growth in the foreseeable future. Including IoT technologies into operations was once seen as a nice-to-have and now, it’s more of a necessity as customers or consumers have high demands and expectations for short and on-time deliveries.
On a global scale, it will be easier to utilize tracking and condition monitoring throughout the whole supply chain. Key metrics will constantly be made available from monitoring the goods itself or reporting acts of tampering or theft. While at a smaller scale these deployments might be happening already, it will certainly be challenging to implement large-scale IIoT deployments. Having a partner with integration and extensive logistics management experience is going to be critical to scale up and see massive ROI in the future.
Artificial Intelligence and Automation
As previously mentioned, 5G adoption is infiltrating many markets and as that happens, it will pave the way for many other tech advancements such as AI and automating many processes throughout the supply chain. Logistics firms can really flex a lot of muscle by implementing this trend and while it may seem really odd to think of a fleet of autonomous vehicles, it’s likely the future of logistics as every step of the supply chain is online and “connected” resulting in massive declines in operating costs. This also addresses the trucker shortage. Full autonomy is quite a ways away, but could disrupt and reconfigure the entire supply chain- and in a positive way. While vehicles usually collect massive amounts of data, it’s also critical to know how and what you’re going to do with it. Again, collecting that data is only impactful if you use it. It will be vital to have a comprehensive plan on how to manage that data collection, storing it and the analysis involved. Also, autonomous vehicles can be anything from a delivery drone to something as big as an aircraft. The growing adoption of industrial robots will also likely boost the logistics automation market overall. While still in the experimental phase, things like last mile delivery rovers and route optimization are key components to logistics sustainability to meet the high-pressure demands of end consumers.
Fully digitizing is on the horizon as more advancements are made to increase efficiencies and to meet customer expectations. According to research, digitization in the logistics supply chain market was valued at $11.8 million in 2019 and is forecast to reach $23.6 million by 2027- a CAGR of 8.5 percent from 2020 to 2027. The last mile delivery has become shorter and it’s become the norm for many with the need to be more flexible and have increased visibility into operations. A sustainable model demands a comprehensive tech stack that will increase visibility and automate many processes to increase efficiencies. It’s not a question whether or not the industry is moving this way- it is right now. The pandemic certainly fast tracked the road to digital transformation for many organizations because they couldn’t afford not to implement ways to accommodate the mandate for social distancing and working remotely without crippling operations. Incorporating BI software and RPA tools where necessary have allowed some to work or monitor remotely. Without using smart devices especially for condition monitoring, there’s no visibility into a production or warehouse facility unless workers were physically there and that’s become a way of the past.
BI software can facilitate critical decision-making and data collection at a very large scale and brings many different systems across the organization together for reporting and analysis regarding costs, maintenance and monitoring, and areas of improvement or room for growth. Embedding analytics into existing applications will also ease the adoption of using certain data points for various teams who need to analyze it.
The rise of tech-driven logistics services and growing adoption of IoT-enabled connected devices are expected to drive the market growth- a 6.5 percent CAGR to 2027, according to Allied Market Research. Logistics automation, reduced costs and lead time reduction are all trends that will continue to promote overall growth in the industry- you just want to make sure your organization can keep up without falling behind.