With consumers constantly demanding more efficient and convenient services, supply chain management has no choice but to adjust to keep up with the times. This is especially true in logistics, as this sector of the supply chain has a significant impact on how quickly consumers receive merchandise and thus customer satisfaction. With greater digitization and the internet of things, logistics may see major improvements in the near future.
Logistics and the IoT
The term The Internet of Things (IoT) is commonly thrown around, but the meaning isn't always clear.. Forbes defines the IoT as connecting all kinds of devices to the internet. The definition seems simple enough, but the IoT is a bit more complex and links to a broader societal change.
For one, consider all the factors contributing to the IoT. As Forbes explained, smartphone prices are dropping; just about every device has Wi-Fi connectivity and digital connectivity is infiltrating every facet of American lives. Growth of the IoT is inevitable, which means its connection to logistics only makes sense.
Business Insider offered greater explanation as to how exactly the IoT is shaping fleet management and logistics. Essentially, it all comes down to automated data collection. Supply chain management is using tracking technologies so stakeholders can know where vehicles and merchandise are at all times. It's not just product-related logistics that use the IoT for tracking capabilities. Government agencies also call on automated data collection when transporting people, and companies use it in field-service vehicles when transporting employees to fulfill job duties. The greater transparency allows for better communication, risk management and efficiency overall.
Digitization of Logistics
Beyond the IoT, other technological developments are contributing to efficiency strategies in logistics. Drones and driverless vehicles are two such innovations making their way into logistics. According to Supply Chain Digital, drones are meant to make product deliveries more efficient and convenient. However, there are still challenges preventing this strategy from becoming an immediate solution. While the technology is available, thanks to autonomous piloting advancement, there still needs to be legislation governing drone deliveries.
There are also the obstacles of deciding how drones will fit into the supply chain. Will they replace other logistics services or just act as assistance? If supply chain management and consumers rely on drones for deliveries, how can they account for severe weather? As with any adjustment, it's important to look at potential obstacles and proactively come up with a plan to overcome them before instituting the change. For drones, this process is still in the works, but they may be a viable solution in the future.
Driverless vehicles are another potential addition to logistics thanks to digitization. According to Supply & Demand Chain Executive, this concept doesn't stop at cars. Now, freight train and truck companies are looking for automated options. This could reduce cost and increase efficiency, all while solving the truck driver shortage the U.S. currently faces. However, as with drones, obstacles like legislation and assurance of safety must be met before driverless vehicles can become a reality.
Technology Reshaping Consumer Demands
Digitization and the IoT aren't just revolutionizing logistics strategies. They are also shaping consumer expectations. With everything available with a few taps on the smartphone, people have become accustomed to this fast-paced lifestyle, and supply chain management aims to meet that expectation.
At least that's the case with Amazon. The e-commerce giant is revamping its logistics strategies to offer same-day delivery with a wider variety of merchandise than any other retailer can offer. However, Amazon will need the right tools to meet these goals.
There are plenty of ways supply chain management leaders can use IoT concepts like automated data collection to improve logistics. According to the RFgen white paper, "8 Signs You Need an Automated Data Collection Solution," inefficient manual processes is the number-one reason why supply chain management may need this technology. Any paper-based methods in logistics must be replaced by automated data collection solutions in order to come close to meeting consumers' increasing demands for efficiency. This transition has the added benefit of improving accuracy and transparency, helping companies see where packages are at all times.