How Industry 4.0 technology is changing the future of logistics
Customers, including businesses, are now used to getting their orders delivered quickly. As a result, manufacturers and suppliers are having to meet these expectations, without always having the infrastructure to match.
Industry 4.0 has a range of technologies and processes that can help them meet these demands. By taking advantage of this new machinery and the data it produces, logistics operators and distributors can improve their efficiency and performance easily.
Otherwise known as Logistics 4.0, these systems are helping distributors and manufacturers overcome many industry challenges. They're also benefiting customers. This article will outline what the technologies look like and explain the benefits they're bringing to the logistics industry.
What is Logistics 4.0?
What are the latest trends in logistics technology?
What are the benefits of Logistics 4.0?
How does Logistics 4.0 benefit customers?
What is Logistics 4.0?
Logistics 4.0 is the name given to supply chains, warehouse management and transport operations that are equipped with Industry 4.0 technologies. These technologies enable logistics operators to collect more data, automate basic processes and make continuous improvements across their network.
The main aim of introducing this technology is to increase logistical efficiency and performance. As the industry becomes increasingly competitive, moving towards a Logistics 4.0 model is giving distributors and logistics businesses the capabilities they need to operate effectively. This means getting products to customers quickly, easily and at a low cost.
What are the latest trends in logistics technology?
As customer demands increase, faster delivery of a greater range of products is required. With eCommerce now being the main point of sale for many businesses, optimising the connections between the online and offline world are key to successful logistics operations.
To meet these requirements, logistics businesses have started to adopt specific Industry 4.0 technologies. Here are the main technologies trending within the industry
Automation
Whether it's finding products, packing, processing, or loading them onto vehicles, there are many repetitive processes within logistics operations. Integrating automation and robotics into warehouses and distribution centres means these tasks can be completed more efficiently without putting greater strain on human workers.
For operators, this helps to reduce workforce costs, fills the gaps in worker shortages and speeds up key processes. Warehouse robots, cyber-physical systems and small automated guided vehicles are just some technologies already elevating human input in logistics processes.
In the future, the entire logistics operation will be supported by automation. This includes products being loaded onto autonomous vehicles ready for direct and efficient delivery to customers.
Blockchain
Blockchain may be more closely linked to the finance industry, but it is also playing a key role in connecting global supply chains. Acting as a secure digital ledger for transactions, using this technology means third parties aren't required to verify or record these payments. It also means the data can be decentralised while remaining secure.
By making data sharing across global networks easier, blockchain technology makes the supply chain management of a product more efficient and visible to all stakeholders.
It also makes the digitisation of certain supply chain processes possible. For example, each product can be given its own authentication code rather than a paper certificate. This makes their identities more difficult to tamper with and easier to track across a whole system.
Augmented or virtual reality
Augmented or virtual reality is when computer simulations are used to enhance or create new environments. For example, augmented reality technologies can overlay data or information onto the real world via handheld devices or glasses. In contrast, virtual reality is when a whole world is created digitally and can only be experienced via a headset.
In the logistics industry, these technologies are starting to play a part in helping workers pick, pack and deliver products more efficiently.
In the warehouse, augmented reality glasses can help workers find the product they need more efficiently by showing its location and the best route to get there. Similar glasses can also be used by drivers and package handlers to find the best delivery routes, provide handling information and verify drop-offs.
Similarly, a virtual reality version of a warehouse can be created and explored by a person wearing a headset. This means people can test out these warehouse spaces to see if any changes can be made to optimise them without the cost and commitment of creating a physical space.
Big data analytics
As smart supply chain operations develop, more data is collected and can be made available to logistics providers. Big data analytics systems mean this information can be used to make better data-driven decisions.
From optimising routes for delivery drivers to tracking and improving last-mile processes and managing warehouses more efficiently. There are a variety of ways big data can be used to help logistics companies save money and deliver a better service.
Transport management systems
A transport management system (TMS) is a technology specifically designed to enable smart supply chain management. By connecting each step of the network together in one central platform, a TMS enables businesses to plan, track and optimise the delivery of goods effectively.
This not only gives logistics providers insights over their shipment performance, compliance and key operations, but helps customers track their packages more easily too. Even across complex or global supply chains, TMS technology helps businesses to meet their customers' expectations more effectively.
What are the benefits of Logistics 4.0?
New digital information and communication technologies are helping the logistics industry to deliver better customer service in a range of ways.
Navigating complex supply chains
With the introduction of Industry 4.0 technologies enabled by reliable, ultra-fast 5G, it’ll become much easier to share data and communicate with different businesses in the supply chain. Manufacturers and suppliers can exchange data and information seamlessly. Plus, increased visibility of the network makes smart supply chain management and optimisation possible.
However, this does raise challenges when it comes to cyber security. Creating an infrastructure that allows for the safe sharing of data and information without threatening intellectual property is a major concern, particularly for manufacturers.
Better demand planning
With more data comes more opportunity to analyse and plan ahead. As well as being able to spot and fix issues in the supply chain before they become a problem, increased data sharing means manufacturers can more accurately predict customer demand.
This means they can schedule production processes more accurately and inform business decision-making when building out a strategy or making investments. Having this information will mean customers get better, more efficient service and enable manufacturers to future-proof their businesses.
Improved warehouse management
As customer demand has increased, warehouse design has had to adapt to keep up. Fully equipped with connected devices, every operation in smart warehouses can be optimised for maximum efficiency and speed.
By equipping their warehouses with autonomous, flexible inventory management and artificially intelligent picking systems and robotics, logistics operators are able to meet customer demand in an efficient, safe way. Plus, they can use the collected data to continuously improve operations and stay ahead of the competition.
Some of these operations include:
• Omnichannel ordering: warehouses now must manage orders from a variety of sources, sometimes on behalf of multiple vendors.
• Reverse logistics: collecting end-of-life goods from businesses, often while delivering new items, and arranging their disposal in compliance with environmental regulations.
• Returns handling: communicating directly with consumers on behalf of vendors; managing the collection, storage, and sometimes repair, repackaging and resale of products.
• Specialist storage: storing a broad range of goods (many of which will require specialist storage) introduces issues of quality control and compliance.
Increasing resilience and agility
By equipping a supply chain with digital technologies and using data to optimise and understand it, logistics businesses can quickly and effectively adapt to changes. Whether there's a sudden increase in demand, wholesale changes in the market or an unexpected shift in a business model.
A smart supply chain management system can help logistics businesses adapt and keep running smoothly through any challenges. In short, these technologies help to make a logistics operator more resilient and agile.
How does Logistics 4.0 benefit customers?
By connecting the supply chain and optimising the movement of products across several stakeholders and systems, Logistics 4.0 benefits customers as well as logistics operators.
Increased supply chain visibility
Smart supply chain management systems, particularly those with a TMS, give customers better visibility over the movement of their orders. Known as 'track and trace', it enables buyers to see exactly where their purchase is as it moves through the system and even adjust delivery times if required.
This is particularly important for business buyers who need to be aware of all the stakeholders involved in delivering a product for compliance purposes. It also helps prove the authenticity of products alongside standard certification checks.
Reducing environmental impact
Understanding the carbon footprint of the products they're buying is increasingly a concern for customers of all types. Tracking a product through its packing, distribution and delivery is useful in monitoring how many carbon emissions are released during these processes.
With an increased awareness around environmental impact, customers are starting to take their carbon footprint into account when choosing delivery options. So, it's key that logistics businesses start tracking this as part of their smart supply chain management.
Faster delivery
While manufacturers and distributors work to improve the quality, efficiency and breadth of their services, customer expectations are rising. The last-mile delivery of a product can often make or break a customer experience. It’s also the hardest part of the journey to track, making lost and damaged items a common occurrence for courier companies.
With deliveries that don’t show up on time (or at all), and distribution centres or drivers who aren’t contactable, there are a lot of things that can go wrong during the last part of a delivery. All of which add up to unhappy customers and lost future revenue. Logistics 4.0 technologies help to avoid these problems.
Plus, as the data from these operations is collected, manufacturers can compare the performance of their carriers and easily determine the ones who aren’t meeting their targets. This will enable manufacturers to both reduce their distribution costs and keep customers happy.
How is Essentra Components getting ready for Logistics 4.0?
As a manufacturer and distributor, Essentra Components has been developing a long-term strategy to continuously improve delivery to customers. By making investments in warehouse management software and collecting, analysing and using a range of logistics data, the Essentra Components team delivers thousands of products to customers every day.
Plus, by gaining regular feedback from customers via both a Net Promoter Score and a post-purchase questionnaire, the team ensures that logistics processes are as optimised as possible. By using this measurement, the team can make continuous improvements to supply chain management and make sure they always deliver a hassle-free service to customers.
In the future, Essentra Components hopes to find a way to open up the product supply chain to customers so they can have even greater visibility over their products and work to make its own supply chain net zero by 2050. Although sufficient data security makes this a challenge, the team is continuously working on a long-term strategy to make this happen for customers.