Current supply chain mechanisms, logistics have become increasingly sophisticated in the past decade alone. As customers demand faster delivery, with equal eager if not more, green alternatives are constantly sought after for footprint conscious ways to have packages delivered. Paris 2015 has certainly shaken up the IoT paradigm to give us a new perspective of how major economies around the globe will be operating from early 21st century, onward. Perplexing upstream resource mechanisms on one hand and mystifying consumption requirements on the other; thus, the Demand-Supply balance has never been more complex. Nonetheless, the Speed of Delivery remains a top priority for businesses to maintain, perishable the goods may be, or not. As Same-day Delivery capability has become the crucial success factor for logistics service providers to differentiate, businesses return to the drawing board to maximize operational agility in response to increasing needs for speed. As businesses embrace new marketplace outlooks and operational agilities that allow them to reengineer and grow with ever changing consumption behavior, progressively, Non-asset Based business models become preferable to increasingly ineffective Location-based Delivering systems. The new sharing economy works in mysterious ways indeed.
Amazon’s robotics application to Fulfillment Centers, including drone deliveries, signals the era of change in Supply Chain business is now. AI (Artificial Intelligence) real-world applications have further amplified the viability of the technology and its role in the paradigm shift. More and more processies will be automated in the close future. For example, logistics fleets will be programed with precalculating algorithms to maximize utilization rates. The IoT (Internet of Things, c’mon now!) will allow the e-brokerage mechanism to transact with a magnitude of retail stores instantaneously, real-time. That means supply chain operations will adjust to a new “leaner” system, with reduced turnaround time as activities and processes get automated. As a result of technological designs by smart people in each inter-operational industry with subject matter expertise, initiatives take place automatically without human involvement beyond the initial design. Thus – a “leaner” business model.
Astonishingly, to no ones’ guess, the word “lean” has been associated with emerged IoT capabilities on numerous occasions. What does “leaner” mean and how does it relate to scaling? Does it mean becoming a minimalist? How does it relate to Por-Piang philosophy? We touch on these areas at the end of the chapter. For starters, let’s take a look at 5 technological scenarios to shape 2030 logistics.
1. Autonomous/Self-driving systems: optimized operation and safety
Before the retail giant employed drones for Last-mile deliveries of the future was hailed by the media as an effective innovation, Amazon was making significant efforts to minimize wasted down time of supply chain workforces, particularly in warehouses. Thus, the vision-guided fully autonomous mobile robots were developed to be applied to various operations such as the genius fork-lifter that is capable of handling customer orders and perform pick-up/on-site placements, not only without human involvement but 4 times more than what humans can do. The autonomous vehicles are predicted to become a reality in 2030, 5%
The epitome of luxury, Rolls-Royce, on the other hand, has announced a plan to manufacture a zero-crew autonomous cargo ship, or dubbed by media the “Ghost ship”, where the captain is pulling the orders and directing itineraries from a stateside control room. The concept incorporates a mixture of technologies, namely the sensors and closed-circuit television that allows cross-continental remote control abilities required to navigate obstacles and routes with susceptible weather conditions all the way to on the spot adjustments to predetermined itineraries, as well. All of which capabilities maximizes freight safety and operational 2Es (Effectiveness and Efficiency) in the same token, simply by removing crew space requirements, e.g., sleeping quarters, kitchen, entertainment and personal hygiene facilities, and etc., opens up more room for freight capacity.
2.Big data replaces fuel as top priority
Ship it before they buy it: Big Data replacing fuel has nothing to do with Paris 2015, as magnificent a game changer it may be. Amazon is a superb example of quizzing every drop of useful information out of gathered big data. Where orders currently come through the .com, processed in a cloud to the closest Fulfillment Center with the goodies, collected and out-the-warehouse by Kiva bots, then delivered to doorsteps via UPS and/or drones; Amazon now wants to beat bricks and mortar retailers of all sizes to the punch with the original online concerto – amazon.com. The model, from A to Z, is probably already as good as a tough customer can ever expect from logistics, unless crime can be prevented before the act. In the future, predictive models will be used to calculate highly probable consumption behavior and ship the goods to predetermined locations before the customers even know they want it.
Big data replaces fuel: The predicting strategy is particularly effective with releases of highly expected products such as the iPhone or the Prius, to name a few. When enough customers in a geographical location search Amazon.com for expected releases, the predictive model can calculate immediately the relative quantity to be shipped to the location, proactively. Predictive power based on big data yields good actionable data that, coupled with Amazon’s owned transportation fleet, significantly reduces Fulfillment time. Thus, by logistics becoming a Data-Centric industry where data yokes more success to transportation than fuel, data will inadvertently surpass fuel as the most valuable operational component for optimizing logistics 2Es.
3.Trucking Uberization or E-brokerage
The growth of online retailing as a positive direct effect of the IoT will render new logistics solutions that impact legacy retail businesses in major ways. Where business models adjust to embrace Mobile-based applications, logistics service providers with idling assets (transportation fleets) will need to adjust to a new Uberization model, as well, where truck supplies are linked to transport contract demands the same way Uber works – through an App. Shipping destinations and load capacity requirements of the transport truck is automatically calculated and matched; thus, bypassing the middle-man tier, altogether. Bundled freights, where various items from different origins with the same local destination are loaded on the same truck, will be by all means a possible option for patrons on the demand side and is expected to increase gross income margins by maximizing utilization rate of operating fleets and minimizing marginal costs from operations, in one bullet. Uberization is expected to be developed in an in-house software concept in the close future through strategic partnerships from various industries, as well.
4. Blockchain Technology: Operational Optimization
Blockchain, simply put is a Distributed database technology that allows every party involved real time transparency. The programming breakthrough figured out how to structure data and concatenate blocks of transactions in a way that allow the digital records to be shared across designated networks, and the most astonishing feature, by-passing central command hub altogether, and in so doing, maintaining the same level of accuracy and integrity whilst optimizing operationallity. “No single party has the power to tamper with the records: the math keeps everyone honest”, opinioned Forbes in a piece. Over “forty of the world’s top financial firms are experimenting with the tech”. With such capability businesses can track movements of assets/products in supply chains over a host of geographical areas concurrently. For example, a typical clearing house has a good chance of suppliers delaying or canceling deliveries, ergo, laying the entire itinerary on the line. Where good managers plan for contingencies, a Blockchain can observe operational glitches as it happens and coordinated solutions with suppliers and strategically involved parties, on the spot.
Early birds catch the worm
A bright future lies ahead for Self-orchestrated Supply Chain systems. By 2030, the 5 developments hold the promise of propelling the industry to become an “Intelligence-embedded Supply Chain” system, according to Forbes, which will significantly improve competing capacity. Same-day delivery will change to Same-hour delivery with at least same ‘hours’ turnaround. Inventory procedures are expected to streamline and save around 50% of existing confusions as the tech better support robotic applications. Warehouses will reduce by 30% of its size with augmented space utilization, while the physical location moves closer to customer-condensed areas and operate autonomously in that territory. Early birds learn to adapt to harness the potential technology has to offer, i.e., optimize operational 2Es and gross income margins, albeit on occasion that means minimalizing to both existing and new businesses. Initially to differentiate, and ultimately, to maintain as robust competitors survive adapt and emerge in the long run.
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Reference and Pictures by forbes.com, rt.com, edition.cnn.com, dailymail.co.uk, plus.google.com, overdriveoneline.com, truckingnewsonline.com, pexel.com