06 April
We all know logistics plays a significant role in keeping the world economy moving. If logistics is right, the economy of a country is bound to grow by helping the businesses perform better at lower costs with higher efficiency. 2020 is an important year for the logistics industry as most of them agree that to go to the next level, there is a lot of work to be done. Ensuring efficient processes, lowering the costs, optimize the resources and making sure the products/services are closer to the market needs more and more technology and innovations. Major companies are preparing themselves and working on a few of the priorities for the supply chain improvements keeping in mind the global pressures, opportunities in eCommerce and challenges in technology and increased customer expectations.
Adapt to Artificial intelligence
More and more companies have realized that artificial intelligence is what will help them optimize and reduce deficiencies in the system with great visibility of the supply chain. So, most of the companies have earmarked budgets to work on the implementation of artificial intelligence applications to their supply chain processes despite the resistance of people in the system with the old school of thought.
Rolls Royce uses AI to safely transport its cargo. They use AI to help ships be aware of what is around them makes shipments faster and safer( courtesy Forbes.com)UPS uses AI to create the most efficient routes for its fleet. They call this tool as ORION( On-road Integrated Optimisation and Navigation). With this tool, UPS can reduce its delivery miles by100 million and almost save $50 million a year.Rivigo, a logistics start-up in India disrupted the transportation and logistics market. They use AI extensively from route optimization, automation for increasing efficiency, lower costs and reliability. They also developed an AI-based CRM agent which helps them to make any number of calls at a single instance enabling infinite scalability. Earlier calling all the potential stakeholders was not humanly possible leading to delay and a possible loss of opportunity.Locus, an Indian start-up that uses AI to help businesses map out their logistics, has been successfully being able to do this for many companies in India.
Blockchain
Blockchain technology helps unprecedented visibility and security for all the parties be it the first party or the third party thus enabling companies to use the huge data from ships to trucks to aircraft, shipping, and inventory. Loads of start-ups in India are experimenting with Blockchain technology and some big enterprises are also considering it as their long term strategy. Companies started feeling the need for it as it helps to eliminate wasteful intermediaries and help them to focus accordingly. In India, NITI Aayog is the Union government’s policy think-tank. Compelling benefits of blockchain have been a driving factor for its adoption in banking, healthcare industry, pharma, supply chain management, education, digital identity, logistics, and others.
FedEx is one of the world’s biggest logistics management companies and handles billions of dollars worth of cargo and courier every year. FedEx is one of the first big shipping giants to incorporate Blockchain technology into their supply chain management. They use Blockchains to track cargo. Walmart is another great example that uses Blockchain for tracking food globally through its supply chain. Real-time data is captured at every point, on every single food product.
Drone & Robotics
Drones & Robotics is the focus for many companies would be an advantage to their logistics and the business. Robots are already being used in most of the warehouses by Auto, Consumer Durable companies and others for efficient and accurate handling. Warehouse robotics is becoming more and more popular. Autonomous Mobile Robots( AMRs) are like AGVs in that they use sensor technology to deliver inventory around the warehouse.
Amazon Prime Air services are well-known services where drones are used for the logistics which is safely designed to safely get packages to customers in 30 minutes.
LG uses robots in the manufacturing plant which helps them pick up various parts from the area for production.
Automation and Digitisation
Eliminating manual processes and automation to the entire process is the key focus, it may be in the warehouse, first mile, line-haul, last mile or returns management. This is including real-time visibility all across. Digitizing the supply chain is a key focus. Supply chain automation is being adopted by more and more operations as the complexity of operating in today’s market continues to rise.
By 2023, over 30% of operational warehouse workers will be supplemented, not replaced, by collaborative robots. Source: Gartner
Investments
Logistics is now being understood as the key to success, large companies were to budget heavy investments in 2020 for the developments they wish to make and make it stronger than ever.
Customer-Centric Measure
Innovation and value for money are key for success for any organization in this era. This is only possible for more technology in place and does away with manual processes to ensure enhanced customer experience and build customer relationships. It’s clear to all, business comes from strong customer relationships. You need to give customers a value add which is way ahead than the competition.
KFC has collaborated with “China Google”, to use facial recognition for predicting what a customer wants to eat.Macy’s uses cognitive AI technology to help customers in their stores.Volvo’s early warning system analyses over one million events every week to predict which car parts will need to be changed and repaired.
Ecommerce
Most companies can’t afford to ignore the eCommerce world which has now taken a good percentage of the pie in the overall sales of most products. So, every company has to ensure an Omni Channel presence and take advantage of every model to grow its revenues and market share. So, set up proper warehousing, use hyper-local logistics companies and fulfillment centers to be near to the customer and ensure customer delight is required.
Coronavirus outbreak has resulted in schedule changes and capacity issues for Air and Sea freight all across. The tightened restrictions may also result in us reworking on transportation and airsea fright plans including pickups, storage,last mile challenges.Most of the Airlines/Shipping companies operating have added surcharges have added like ESS/PSS till corona situation remains which is an added huge costs to companies who need ot transport in this difficult times. Unprecedented delays, no last mile support, extended TATs would remain for few months. Rail transportation is also effecting possible delays including pre and post carriage of trucks services at the european borders. Airlines that specialise in cargo have seen a steady demand. But a fact of the matter is that a large chunk of air frieght is belly cargo in passenger airlines. Thousands of flights all across the globe have canceled as a result of the outbreak, resulting in shippers haveing fewer options.
Conclusion
So, my take is that the first 3-5 months would go ensuring things stabilize, reduce costs as much as possible and trim the process to be in line with the revised revenue growth which would be the goal of most of the industries all across. The firing of employees is already visible now and it’s scary. I hope that things stabilize as fast as possible all across the globe. Also, the logistics and 3PL companies will have to work on aggressive plans for ensuring they meet their revenue targets as this coronavirus syndrome looks will stay partially for few more months. It would be appropriate to say that the global economy wil need to crawl before they can fully walk becuase of the impact of the coronavirus. As logistics growth is directly propotional to economy growth, so would be the case of supply chain.
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