Regular readers know that I am a big technology advocate and the simple reason for that is because it has the potential to makes our industry run cheaper, faster, smarter and simpler. Who can argue with that? So here’s one man’s take (with a little help from DHL!) on Logistics Trends 2016.
It’s an exciting time to be a member of the logistics industry. Everywhere you look there are monumental changes going on. A platoon of driverless big rigs hurtle (safely) down a European freeway. RFID sensors track containers across the world from source to destination, and the shipper has full shipment visibility at all times. Cloud computing has given small to medium size companies affordable access to big data and analytics, enabling them to run their businesses much more efficiently and productively. Technology wearables and robotics are starting to make their presence known in warehouse management. And the list goes on…
So the question becomes what new technologies do you adopt and when? Unfortunately I can’t answer that. It depends on your specific situation, the area of the logistics industry you operate in, how far along the technology curve you are and numerous other factors.
However it is crucial to keep yourself educated, informed and willing to embrace change. As more “millenials” enter the logistics industry, and the “baby boomers” bow out and head for Margaritaville, change will accelerate. If you don’t stay ahead of it, embrace the new technologies and make the changes in your business practices, your competitors certainly will.
One company that does have its finger on the pulse is DHL. Every year they publish the “Logistics Trend Radar” and the new 2016 version is now available. It’s an extensive report covering all aspects of the logistics industry and I particularly like the way they separate into two segments, “Social and Business Trends” and “Technology Trends.” They also break the trends into low, medium, high impact over less than or greater than a five-year time frame.
I summarize some of the reports main findings below and recommend you download it and read it for yourself. It’s an excellent overview of where the logistics industry is heading and can give you some keen insight on how to position your company for best future competitive advantage.
Social and Business Trends
This is big data predictive algorithms giving logistics providers the power to actually predict demand before requests or orders are placed. The resulting more efficient resource and capacity utilization reduces lead times and enables Leaner inventory management. These predictive algorithms can also be utilized for supply chain risk management and maintenance.
Batch Size 1
This is mass production of highly customized goods in response to increasing consumer demand for personalization. Apple kind of gave you a taste of that in the early days of the iPod. You could choose from a range of different colors which was unheard of prior to that. One extreme of this is having Amazon produce a “one-off” product in the back of their delivery van, with a 3-D printer, and deliver it 30 minutes later. Adidas uses a similar concept by developing small high tech “speed factories” located within regional sales markets.
On Demand Delivery
Utilizing the power of the crowd and flexible courier teams to enable customers to take delivery of their purchases where they need it, when they need it. Sophisticated real-time location, routing and app based analytic technologies are already emerging and will significantly change parcel delivery in the coming years.
Unprecedented amounts of information can be captured at multiple points along a supply chain offering end to end visibility. This offers massive potential to optimize capacity utilization, reduce risk, improve customer experience, and even create new logistics business model. Companies become smarter, faster, and more efficient.
Logistics providers can tap into modular cloud services on demand. This allows highly scalable service and management capabilities without requiring the traditional development, set up, and maintenance costs of owned IT infrastructure. This pay per use model becomes much more for small and medium-size companies.
Unmanned Aerial Vehicles
As a self-confessed drone geek I couldn’t pass up the opportunity to mention them! DHL see them as providing a new form of express delivery via carefully coordinated air networks. They will really start earning them money in areas of high traffic congestion and very remote locations. Drones can potentially increase speed and customer satisfaction, lower costs and, in hostile environments, save lives.
This is only a handful of trends that DHL discuss. Download the Logistics Trend Radar 2016 Report for a much more detailed exploration of logistics trends in 2016. There is something of value in there for a broad range of logistics companies. I highly recommend it.