Logistics and Supply Chain — Digital Transformation Trends and Why They Matter
Digital Transformation Trends and Why They Matter
Digital transformation and rapid innovation are impacting every sector across all industries. Technologies and trends that only a few years ago seemed like cutting-edge luxuries are necessities in a post-pandemic world, fundamental to a company’s ability to thrive or even survive.
Even sectors that, historically, have been reliant on manual processes, and heavy on siloed data, are no exception. Logistics and supply chain are perfect examples.
Though the definitions are somewhat fluid, in general, logistics includes all activities needed to manage product within a single company (procurement, storage, inventory, maintenance, distribution, etc.), while supply chain refers to the entire network of organizations whose work must be coordinated to bring a product to market (including all tasks/steps/materials, in-bound and out-bound, that fall under the logistics category, plus finance, marketing, customer service, development of new products, and so forth).
Together they encompass the entire flow of a product from raw materials to last mile and landing on your customer’s doorstep: planning, sourcing, manufacturing, in-house logistics (orders, scheduling, invoicing, payment processing…), delivery, and returns.
And insofar as they relate directly to customer experience and satisfaction — delivering the right product to the right person and place, at the right time (now), in impeccable condition, with sustainability at the forefront and real-time information at every touchpoint and each stage in the process, plus a certain panache in an era when customer expectations are constantly evolving and increasing — logistics and supply chain are arguably among the most important areas to modernize.
It’s fair to say that in today’s digitally driven marketplace, where omnichannel ecommerce and the availability of global sourcing add to the innate complexity of this sector, keeping pace with consumer demand is only possible with state-of-the-art technology. Effective logistics and supply chain management saves time, lowers cost, minimizes waste, mitigates risk, optimizes customer experience — and ultimately results in increased profitability.
And so, we are in a moment of unprecedented advancement and disruption in these fields, seeing countless innovations: digital freight matching, cloud-based transportation management, track inspection drones, autonomous delivery vehicles, improved GPS, predictive analytics, digital twins, advanced tracking systems, and much more.
Here are four major logistics technology trends you should be leveraging for your business:
Though most popularly associated with cryptocurrencies like Bitcoin, blockchain (and/or similar distributed ledger technologies) offers significant logistics opportunities and benefits. A decentralized database, which stores data in a sequence of locked blocks, creates a chronological, immutable, transparent, secure transaction record. This single source of truth promotes accountability, prevents fraud, and facilitates strong communication among the numerous coordinating partners in a supply chain. This is especially important in a sector notorious for lack of integration and siloed data. As IBM reports, “Blockchain is a natural fit for inherently fragmented industries, such as transportation, in which close coordination with multiple parties is essential.”
Internet of Things
The IoT has become an indispensable part of modern daily life, and yet for many of us, it remains a mysterious concept. At its most basic, the IoT connects people to things through digital technologies, such as built-in WiFi and device sensors. When you adjust your thermostat through your smartphone, for example, you’re using the IoT. The IoT has a vast range of applications for supply chain management. Sensors in various transport vehicles transmit information that dispatchers can monitor, detecting and adjusting for unusual road, weather, or traffic conditions to reduce risk, delay, and unexpected costs. It can provide real-time inventory tracking, visibility of goods in transit, remote product management, monitoring of product handling, and more.
Siloed data and disparate systems create inefficiency. The logistics and supply chain sectors have long been mired in this very problem, and their innate intricacy makes digital transformation complex but essential. Benefits of advanced and predictive analytics include ability to: anticipate and adapt for slower/busier/peak periods, fluctuation in customer demand, potential supply or inventory shortages; monitor the performance of machines and workforce; aid in shipment consolidation and route optimization; enhance transparency and visibility for all stakeholders; streamline overall.
Artificial and Augmented Intelligence
From enhanced route planning to sustainability goals to delivery robots, drones, and autonomous vehicles — artificial intelligence (AI) is revolutionizing the ways we bring product to market. Augmented Intelligence combines AI with human input, bringing the benefit of experience, customer relationships, discernment, flexible thinking, etc. to big data, and allowing employees to focus on meaningful work while machines manage more tedious repetitive tasks.
When it’s time to reimagine your organization’s logistics for optimal performance in today’s digital economy, the veteran team of business modernization and digital transformation experts at Lukasa can help. Partnering with your existing team, we analyze your company’s supply chain end-to-end to diagnose inefficiencies and pain points, then design and deliver a custom, comprehensive, future-focused improvement plan.
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