The world of logistics is an ever-changing cycle of technologies that come in and replace other methods that slowly start to get left behind by the many demands of such an aggressive market. Here in David Kiger’s Blog, we have talked about how technology affects logistics and how it does so in so many different ways; ranging from the advent of big data and analytics that transform the entire supply chain, to warehousing advances and transportation technologies that are permeating to other fields that do not just include logistics but pretty much every other aspect of our daily lives.
One of the most important aspects of the supply chain is the way goods move from the manufacturers all the way to the end user. We can all agree on the fact that we are talking about a process that is considered “macro” and that it involves so many steps and so many variables, that our initial assessment about its important is an obvious understatement. Moving goods from where they are made all the way to customers is an essential part of the supply chain, and that is perhaps the reason why new technological advances are always affecting this portion of the process with such huge impact.
Transformation to this link of the chain seems to not only avoid slowing down but actually gaining speed exponentially. In the next ten years, we can expect to see how new business processes will continue to reduce costs to the supply chain and reorganize its components to make it more streamlined and efficient.
The spaces we commonly known as logistics real estate are changing as well. No longer do we think of warehouses as those far removed places where goods are stored and only take out as needed. Today’s warehouse is not only different inside and out, but also it sets itself apart because of the geographical place in which exists. Since e-commerce has become one of the most prominent ways people do business, it is imperative for companies to get those goods out there to their customers in record times and that is why warehouses, operation, and distribution centers are becoming so strategic to outpace the competition. They can no longer be located far away from urban centers where most people live and they now have to co-exist with these particular locations.
The bottom line is that the supply chain of tomorrow is going to be a lot more complex than what we deal with today, but that doesn’t necessarily mean that it will be more expensive. Both of these factors add up to a supply chain that is much more efficient and satisfying to customers. The way resources are spent for energy in transportation, labor, rent, and inventory will undergo significant changes that will translate to the type of efficient expense management we mentioned above.
Energy transportation is particularly important because its costs usually add up to more than half of the total supply chain expenses. In this particular area, we have advances that allow for vehicles to be electrically or solar powered and in some of the newest applications, to be self-driven. Changes like this will reduce costs related to transportation in considerable amounts. Recently in Germany, a few stretches of road were outfitted with technologies that allow for trucks to connect to a top cable rail system that allows for the used to electric energy for power and perhaps even charge vehicles that are hybrid or already electrically powered. That paired with vehicles running on their own and complex algorithms mapping the most efficient routes in terms of distance, fuel consumption, traffic conditions and weather patterns; can assure that the full service of technology is being utilized towards driving costs as low as possible; something that in the end will be passed down as savings towards consumers and more profitable operations to companies.
It is only logical that reductions in costs in the area of transportation trickles down towards saving on other areas like labor for example. Today there is a very high demand for truck drivers and it is sometimes impossible for the current community of transporters to cover the needs of the market. New strategies like Uber trucks and such are creating a new way for truck drivers to get in contact directly with companies or individual customers and render their services. The initiative is great at cutting down unnecessary costs and allow not just the drivers, but also the customers to have better control over the transactions and the specifications they need a transportation company to over for them. Theses types of solutions are equally effective for large companies as they are for smaller retailers and home businesses and they are very customizable and their service is highly personalized. Personalization seems to be the way of the future, and those who are already on the bandwagon are reaping the benefits.
* Featured Image courtesy of Mike at Pexels.com