How digital technology is transforming the transportation and logistics sector

The Digital Technology Disruption

The transportation and logistics sector is currently being disrupted by digital technology. The influence of digital technology will be significant and many hope that it will transform the industry and increase service-level improvement. It will also offer new opportunities for all stakeholders in the supply chain to improve their warehouse operations and last-mile deliveries.

Digital technology will foremost improve information sharing and transparency and help to improve customer engagement.  Also, more consumers will require faster deliveries and this will lead to new last-mile operations and distribution patterns. In the section below, we will look at four technologies that will have the highest impact to disrupt the transport and logistics sector.

Four technologies with the highest impact

1. Data Analytics

Data Analytics is expected to help the transport and logistics sector to overcome challenges in demand forecasting, pricing and performance analysis. This would create new value-added services and increase efficiency in logistics operations. Data Analytics has a great impact on demand forecasting, route planning, and capacity forecasting. As computer power has increased, data modeling and data computing are making it easier to analyze large data sets. The value-added services based on data analysis are many and include resource and asset efficiency, increase customer satisfaction and performance analysis. Already today data analytics is making the organization more efficient and support decision making. As the development of computer power will continue, many aims to move from descriptive analytics to prescriptive analytics to optimize and simulate processes.

Case Study: How Alibaba is leveraging Big Data to deliver Smart logistics

2. Internet of Things (IoT)

The cost of computing power and data storage is decreasing along with new connectivity technology, IoT has captured a lot of interest.   The future aim for supply chain management is to build a control tower platform to track and trace goods and shipments.  IoT technology can enable real-time tracking and monitoring of cargo and fleet management optimization. In order to improve lead-times, fleet operators can use IoT technology for remote diagnostics of their trucks and monitor driver behavior for fuel and time efficiency. From the consumer side, real-time tracking and tracing of parcels would add value and improve the customer experience.

Case Study: Traxen Smart Containers
Case Study: AHRMA Smart Pallets

3. Blockchain

A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a time-stamp, and transaction data. Blockchain technology will impact the end-to-end supply chain and the whole sector regarding information sharing, compliance, and cargo deliveries. Start with the concept of smart contracts; this will improve goods handling in ports and cargo transport with ships. For many shipping companies, costs in trade compliance and documentation can be minimized in the port terminals. Further on, Blockchain technology can improve verification of goods and deliveries transforming analog data to digital. This would improve the flow of handling goods and transports and increase the transparency for shippers, 3PLs and freight forwarder.

Case Study: IBM and Maersk Blockchain solution

4.Platform design with Cloud technology

The transport and logistics sector is aiming to automate and simplify the process involving transport and logistics operations. As data storage cost has declined and with the development of bandwidth technology, it is now possible to build cloud solutions. These solutions can be in the area of online booking, cargo handling, container management, and customer management services. With the help of the cloud platform, it would also be possible to use the full potential of data analytics to in real-time analyze large data sets from booking, fleet management, and distribution data.

Case Study: Oracle Cloud for Supply Chain Management

Other technologies to consider in the long-term

Other technologies that will impact the transport and logistics sector in the long-term and should be considered are autonomous transportation, robotics, 3D printing and Augmented Reality. Today, there are pilots ongoing with the above-mentioned technologies and the robotic system has seen the good potential and is predicted to have a high return of investment. Robots in material handling, inventory, and storage operations are today used by Amazon and DHL.

Case Study: Vision Picking at DHL Logistics
Case Study: Amazon Warehouse Robots
Case Study: SAP and UPS 3D Printing
Case Study: Scania Truck Platooning

References

Mckinsey Supply Chain 4.0
Deloitte Industry 4.0 & Supply Chain
PWC Supply Chain 4.0
Weforum Supply Chain 4.0

2 comments

  1. Really interesting article. Very good case videos. Did you know that we at Gartner also help our clients with supply chain management?

    Like

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