The impact of Blockchain on logistics

Surely there were many times that you’ve heard that Blockchain is a revolution in economics and the key to future. And that’s right. In addition, if we talk about sectors such as logistics, its impact will be brutal…
But, do you really know what Blockchain is and why is it the key to future?

What is Blockchain?

Blockchain is a complex concept that we been hearing a lot lately, but actually not so difficult to understand…

Internet has changed the world. However, there is something that has not changed much: we do not trust each other, for that reason, especially when it comes to transactions; we need another part to verify who we are. That is why until now, intermediaries, such as banks or Paypal (very present in online transactions), have been an essential part of the system.

The problem is that these intermediaries, while guaranteeing certain security, obtain our data and market with them. Blockchain is a solution to this precisely.

Here is an example: A person (sender) wants to transfer 2.000€ to someone (receiver). The normal procedure at that time is that the sender demanded that the bank withdraw the import from an account and transfer the Money to the recipient’s account.  In just a few hours (perhaps less), the bank will have made the operation and the money will have gone from one place to another with a simple automatic balance of accounts.

At this point, there is only one problem, that neither the sender nor the recipient have had any control over the operation process and only the banks involved have all the information. In addition, both the issuer and the receiver are subject to the conditions (and commissions) of the bank.

This is where Blockchain comes into play, which basically comes to get rid of the intermediaries, taking away power to the banks and granting control of the processes to the users.

Therefore, we can define the block chain as an enormous book of accounts, a database in the form of an accounting book, from which all those who participate in the network keep a copy and where all transactions are recorded. In this book of accounts, the records (which are to be the blocks) are linked and encrypted to guarantee security and protect the privacy of the transactions that are carried out. It is an immutable and distributed registry, which is both integrable and programmable.

Here some important keys about blockchain:

I give you some important keys to the blockchain:

  1. Transactions do not necessarily have to be economic, it can be any type of transaction.
  2. Consensus is one of the major keys: if we all have the same information, this information is given for a fact. Everything works by consensus of the parties, and the past cannot be erased or modified, nor can it operate outside the rules given by the network itself.
  3. In order for a transaction to be carried out, there must be several users who verify it and that the corresponding block (each block has a number of transactions that can vary) is registered in the large book of accounts that we talked about.

This infographic shows how it works in a very illustrative way:

blockchain a la logística

Blockchain platforms

It is important to know that there is not a single kind of blockchain, there are many blockchains that can be used not only for money transactions, but for any kind.

There are three types of block strings:

BLOCKCHAIN ​​PUBLIC

In this type of block chain there are no restrictions to add nodes (users) and anyone could use a client to start participating.

Bitcoin is an example. In fact, this concept was born by the hands of the famous digital currency.

This model gives rise to blockchain networks of thousands of independent nodes that are distributed throughout the world. The problem of this model is that in business environments, where privacy and performance have a decisive weight, it is difficult to assume it and implement.

PRIVATE BLOCKCHAIN

Private blockchain is more exclusive, for only the ones authorized by the owners. In addition, this type of blockchain has very specific uses.

In this way, without losing the blockchain essence, networks can be configured between actors of a particular field, and participation is more controlled.

MULTICHAIN

In this case, we speak of an evolution to improve the characteristics of the use of private networks. Starting from an open source philosophy and license, it allows the creation of regulated networks “with permissions”, in which an administrator can define and grant different kind of permissions. It is a platform that allows to design, implement and operate blockchain blocked registers quickly and easily. To create private blockchains, means that the creator can decide who can connect to the platform to send and receive transactions, create assets and blocks. In addition, you can also decide to open your blockchain and make it public. The platform allows you to create your own digital currencies to make exchanges and keep track of transactions on your network.

The impact of blockchain on logistics

How and to what extent does all this affect the logistics sector?

As we all know, international trade requires complex transactional logistics operations involving a large number of entities, as well as requiring the control of information flows and money. On the diagram you can see the complexity of the process. They are processes that involve more than 10 different entities and where more than 30 documents are generated and moved.

These different participants are all around the world and many times they do not know each other. The lack of knowledge and trust, forces to implement an enormous amount of paperwork and of operations that do not add value. In a container transport from Asia to Europe by ship, 40% of the time is lost in waiting, essentially due to customs and operational procedures of all kinds due to lack of confidence between the parties.

blockchain a la logística 2

Different solutions in the logistics field have varied over time. Initially we talked about architectures that departed from a central server. This model evolved resulting in solutions in the cloud today widely used.

The blockchain is presented as a new model. A future model that will bring decentralization, confidence and collaboration towards the efficiency in logistics operations.

Imagine the scope of blockchain in logistics! It would allow you to connect to importers and exporters, logistics operators, financial entities, insurers and any other agent involved.

This new model would help accelerate processes, ensure a more agile operation, reduce costs, more transparency and improve the auditability of the process.

The advantages, as you can see, are enormous!

When will be implemented?

Technology promises and allows us to ensure that it will produce a radical change in how we do things today. But we are not facing any change, we are facing a paradigm shift. In front of a change of what we know for something totally new.

Let’s say it is in an initial phase and there are still many challenges to face, both in a technological and operational point of view and of legal and regulatory matters.

The challenge is great and ambitious. And the projects are, for the moment, ideas in the development phase.

In addition, we must take into account that intermediaries, who have become an integral and essential part of the economy and society, will not make it easy the transition for this innovation to happen. Before this revolution that we so much talked about, succeeds these same intermediaries will put all the means to reject it or, in a more optimistic case, adapt it to their own interests and needs.

I leave you a video where you can see a real case of implementation of blockchain in the world of logistics by IBM for Maersk.

 

Anticipatory Shipping: The Amazon patent that allows sending products before the users have even purchased them.

logisitca-amazon

Advances in technology and innovation make the future we saw, just a few years ago, in some cinematographic films, not as a fantasy any more but now becoming part of our daily life.
It comes to mind “Minority Report,” “The Fifth Element”, “2001: A Space Odyssey” and “Robocop.”

HAL 9000, the computer that we saw in “2001: A Space Odyssey” could interpret the feelings of the characters and was able to predict when they would turn it off. We do not know if Amazon was inspired by the film when creating “anticipatory shipping”, but this algorithm is something similar because it can predict the demand of users for the purpose of sending products before being purchased and they can be delivered in an hour.

In 2012, Amazon presented a patent for a delivery system designed to reduce delivery time, by predicting what users will buy before they were actually buying it and shipping the products to their homes even before the sale has been made: “Method and System for Anticipatory Shipping Package“.

Today, the Amazon commitment with users and buyers who choose the Premium service marketplace is the one or two-day delivery. Although there are already some locations where the deliveries can be made in less than 24 hours. The aim of the e-commerce giant is to minimize delivery times and in order to make this possible, the key are the so-called predictive models.

The idea is aiming to ensure that online shopping can be as immediate, as to buy goods on a physical location, in which you can pay and take the product at the same time.

How is this possible?

Big Data plays a key role in this. Thanks to stored data in the order history of each customer on Amazon, the online sales giant can predict how many new books of Dan Brown’s latest novel, how many Samsung 7 or how many drones will be sold in a given area: neighborhood, city, etc.

This model simulates the reality by analyzing the customer behavior in the past and even though it is not exact, it allows to approach the number of orders that will be carried out. Given this estimate, Amazon sends a variety of products to its distribution centers and even trucks assigned to an exact area. From the user finally ‘clicking’ on the button, until the arrival of the purchase at home, the shipping can take just a few hours or less.

We cannot ignore that carrying packages from one place to another, has a cost. Even for Amazon. But if there is anything that characterized them in the past, is having an efficient logistics that allows them to make a difference and their excitement to innovate.

What happens if their predictive model is wrong?

This part also is under control through a system that is able to calculate whether it is worth (speaking of costs, of course) to return the product to the plant or if it is better to send discounts and promotions to customers in the area where the products are (always a lower value than the cost of returning the product to the plant). The idea is not so far-fetched. It allows offering great deals to customers and making them happy, as well as the liquid stocks are reducing costs and maintaining a complex logistics machine running.

Amazon is very sure of their prediction algorithm and its reverse logistics capabilities, which in the US is now already sending products to certain customers without them even done “the click”. It is already in the last phase, where they will be able to know the purchase of a product even before we know it. Really incredible and disturbing, they know more about us than ourselves.

Implementing the model worldwide where customers are counted by millions, with hundreds of distribution centers to control all across the planet, and thousands (maybe more) suppliers is not an easy task. But it is undoubtedly a brilliant step to the future and a unique way to differentiate them from the competition.

Alan Key said:
❝The best way to predict the future is to invent it❞.

The future of road transportation: Driverless Trucks

camions-sense-conductor

A year ago or maybe a bit more, we`ve been hearing the media talking about a near future in which vehicles can go without a driver handling the steering wheel. But not only by media giants, like Google or Uber, even manufacturers such as Ford and Mercedes-Benz predict a future where autonomous vehicles can be driven without a person.

Mercedes-Benz presented what they consider the truck of the future, which is called “Future Track 2025”. A model that represents a breakthrough in efficiency, security and networking. It is a vehicle with an automatic, integrated system that allows the driver to rest or perform other tasks meanwhile the truck is in charge of getting cargo to its destination, safely and efficiently.

The prototype of Mercedes-Benz, as you can see in the link below, represents a revolution of traffic and infrastructure, for professional drivers and the road transportation sector. Among many other objectives and advantages, it ensures the highest level of traffic safety, promoting the creation of networks and intelligent data management, preserving resources and reducing emissions. Having in mind that over 90% of accidents are caused by human error.

It has recently come to light, that the giant Google has a patent that describes a driverless vehicle for packaging transportation. As reported by the journal Quartz, Google pretends that the packaging recipients receive and type a PIN code at a corresponding locker, in the truck when it arrives to their door.

The patent does not provide details about the vehicle autonomous operation. Although it refers to common elements of driverless cars or other vehicles prototyping: laser and radar sensors, video cameras, navigation maps, communication systems, connecting vehicles to an external controller, etc.

Google wants to deliver packages from self-driving trucks

The industry is showing great optimism to the possibilities, but the truth is, although they are already testing this technology, driverless vehicles present more obstacles than just the technological:

High Costs

Currently, the costs involved in creating a vehicle with this kind of system and driving it on the streets are very high. Which undoubtedly makes a mass production of driverless trucks still a dream.

Road safety rules and other legislative barriers

Legislation is still not prepared for this, in almost any country in the world.  A few months ago the biggest problem in drones development and innovation, broke at the legislative level. In this case it does not look very optimistic. Governments, both local and national, are unsure about the idea of putting millions of human lives in the hands of robots.

In case of driverless vehicles, for example: Current regulation takes for responsible, the person behind the wheel, driving. Imagine in case of an event or accident, the responsible will be the robot!

Rejection by part of the sector.

We cannot forget that millions of people are working as full-time professional drivers and certainly this type of technology will be rejected at the first sight. This is not something new in human history. Technological revolutions involve stop doing certain things and start doing other instead. Like manufacturers of carriages were jobless when cars appeared. Surely, professional drivers can do other things related to people and goods transportation, in which they are involved. In any case, it will be a long road where everyone have time to adapt, if they want to.

However, the benefits are many: security and management, resource optimization and even in an environmental level. People with disabilities, either by age or disease, a group that is growing in number, anxiously await such solutions to change their lives, giving them the autonomy they had before.

All these factors, in a short, medium term, would start leaning in favor of accepting driverless vehicles. We will begin seeing them as normal on our roads in about five or six years from now, I dare to predict.  The first radical change, will come in the next 2-3 years. It will be unstoppable the introduction of electric cars, then the autonomous cars and probably much later they will gain the ability to move not only on land but also on other surfaces like water or air. In short term, we are facing an exciting future, if we make the best of it. And in this case, innovation must move businesses and entrepreneurs, to bet to this new world that awaits us.

Logistics of electronic commerce (e-commerce)

Logística-del-comercio-electrónico

Despite the dramatic increase in e-commerce and its technologies in recent years, logistics is one of the aspects to be improved, especially in small and medium-sized online shops. Generally speaking, large companies that have stepped into the world of online sales and have done so successfully have been able to give due importance to logistics and transport within their business. In fact, this is a key aspect for the successful performance of the business.

Actually, e-commerce is a major challenge and an overly complex problem that cannot be solved following a traditional logistics model. E-commerce logistics has very specific needs that require customized solutions and flexibility.

We start from the premise that there are multiple platforms for e-commerce today. Businesses and entrepreneurs can choose whether to use free solutions (Prestashop, WooCommerce, etc.), private ones (Trilogi, etc.), or even SaaS solutions (Shopify, Tiendy, Jimdo, etc.).

Finding a universal solution adapted to the vast amount of existing platforms is no easy task. Perhaps this is the first barrier, but not the only problem to solve…

Major needs in e-commerce logistics

– The product is not sent to just one point, but it must reach every customer.

– Delivery problems can generate conflict with the customer: dissatisfaction, poor brand image, loss of customers, etc.

– Online stores should be aware that the cost derived from logistics influences and determines the profitability of many operations.

– In order to guarantee the service, it is essential to properly manage aspects such as the supplier selection, deadlines and after sales service, among others.

But if we go a little further, the complex logistic challenge presented by electronic commerce is paired with the demands of the new customer, willing to be able to track his/her order in real time, within extended hours and with a customized delivery service (schedules, different deadlines depending on urgency, costs, etc.), an efficient and effective returns management, and a good after sales service.

The so-called e-Logistics has 3 main factors:

Storage

This part of the process should include order picking systems focused on small orders; the ability to manage the stock efficiently; quality packaging; and reliable and effective systems of preparation, consigning, controlling and monitoring in real time.

Distribution

Here we refer to the traceability of the distribution process; flexibility and quality in product delivery; international scope; urgency services, etc.

Information systems

We need to have a reliable and accurate management of stocks; and efficient deadline plan; advanced management systems (real-time monitoring through radio frequency, route planning and optimization, tracking of goods, customer service, etc.) and the integration of logistics information systems in the online store.

To round up this information I invite you to read this article on Cloud Computing in the supply chain (http://ignasisayol.com/en/informatica-en-el-nuvol-cloud-computing-el-futur-de-la-cadena-de-subministrament/).

Some of the solutions adopted specifically by small and medium-sized businesses as we mentioned before are the deliveries in stores or designated centers, which can reduce costs for both the store and the customer and can generate brand confidence in starting businesses.

Logistics applied to the online store is a pivotal point of the business strategy. It is also the most important differentiator for a company that sells products online and no doubt it is still the greatest challenge when developing an e-commerce. Hence the importance of choosing a good provider of logistic services to avoid putting too much effort into something that is not their core business.

Finally, it is worth mentioning that the importance of logistics in e-commerce brings about interesting initiatives like “Amazon Logistics”. The new Amazon Logistics service offers access to the distribution network and the Amazon customer service to all the external sellers using the company’s Marketplace platform. In this way small and medium businesses that generate products and services can have access to the world’s leading e-commerce logistics service.

Technologies that will make roads safer, more comfortable and efficient

 

1425040529_222265_1425041313_noticia_normal-300x168 (1)Technology has advanced at a breakneck pace bringing major changes in nearly all industries. However, if we talk about transportation, or roads in particular, these advances have not been much noticeable, which means that, despite some exceptions, our roads today are very similar to the roads we travelled a decade ago. Although they occupy vast extensions, virtually anywhere in the world, roads and motorways have an untapped potential.

But the fact that they have not been applied or implemented does not mean that there is no research and development of technologies designed to make safer, more efficient and comfortable roads. In fact, there are many projects, some completed and many others under development, which open up a world of possibilities and allow us to figure out what the roads we will be travelling in the near future will be like.

Environmentally-friendly and self-sufficient

In this regard, there are plenty of projects, initiatives and prototypes…

In Holland, for example, a trial project has been carried out to turn roads into energy generating surfaces. The idea is to replace conventional asphalt roads with a new compound that is able, among other things, to capture solar energy and convert it into electricity. Solar panels are covered with highly resistant materials. This makes it viable for cars to drive on them while capturing the energy of the sun. Beyond the environmental concerns, this option may turn out to be more profitable. It is estimated that these roads would have a lifespan of 20 years and that it would take us 15 years to repay them through the energy generated. This can be achieved once the testing phase has been completed and mass production can be performed.

Other projects also propose solutions to use the day solar energy to supply the lamps that illuminate the road at night.

Some go further and have created systems with sensors which, when applied to lamps, make them light up only when they detect the presence of a vehicle. Thus, a great amount of energy can be saved, using it only when really necessary because there are users on the road.

But not only sunlight can be used to generate energy on the roads. An Israeli company has created a system based on a compost of crystals which, embedded in the asphalt, are able to generate energy through the pressure exercised by the vehicles circulating on them.

Even the wind produced by the speed of vehicles can be used through small turbines located on the sides and median strips of the roads.

As you can see, there is a wide range of technologies that are being developed to ensure that our roads become self-sufficient energy generating systems. We could refer to them as “intelligent roads”.

Safer

In order to increase the safety of our roads, a set of initiatives are being tested and they will soon be implemented.

Removing the ice on the roads is one of the biggest challenges. One proposal in this regard is to use solar energy to get rid of the ice, thus making the roads safer.

Thermodynamic paint is probably one of the realities that we will soon see on the roads, consisting basically of creating new road markings that change colour based on temperature. That is, the road itself would warn drivers of any risks ahead by changing the colour of the road markings.

Besides everything explained above, there is the commitment of many car companies to fit their vehicles with new technologies that enable greater safety, efficiency and comfort.

Implementing collaborative logistics

logistica colaborativa

As I mentioned in a previous article a few weeks ago, moving away from the traditional model towards a collaborative logistics model implies a radical change for any company; a change based on the implementation of a collaborative culture. The most important factor to achieving this aim is to build trust, which requires a win / win attitude on behalf of the organization, an attitude oriented to a situation where we all win, not just me.

I recently discussed as well the importance of proactively sharing management data and results as a key aspect for the growth of the supply chain. This model is based on the existence of joint business plans and information sharing as essential collaboration elements. But once the theory and the basic premises of collaborative logistics are settled, we need to ask the big question: how can we implement it?

We can divide the actions into three distinct and progressive groups:

  1. First stage. We carry out a collaborative planning business plan, which should include an initial and final agreement between the partners.

If we take into account that operating in accordance with a collaborative culture requires trustworthy relationships, this first point is essential to establish and build trust between the parties or partners. In this first step is where organizations must establish collaboration rules, define the expectations of both parties and discuss the resources they will invest in this process.

In order to begin this trustworthy relationship and achieve the objectives, it is essential to specify aspects like the real opportunities to optimize the benefits and the performance indicators, and to establish the roles of each partner; among others.

Sharing information and constant communication in each part of the process is the basis of this activity and it allows generating a joint strategy which, in turn, enables to reduce exceptions to the minimum and makes monitoring of the implementation easy.

  1. The second stage relates to sales and ordersforecasts.

Sales forecasts are usually performed by one of the parties, which then informs the other party involved in the process, and this forecast is finally used as a model or guide for the elaboration of another forecast.

To determine which part or partner involved should start the elaboration of the first sales forecast, it is necessary to identify where each organization stands within the supply chain.

Once the former issue has been settled and agreed, it is time to identify and make a list of the exceptions to the sales forecast. In other words, considering the assumptions used to make the forecast, clearly identify how we react in the event of deviation of each of them. When we start a collaborative process, it is especially important to make everything clear and objective, so that in the case the forecasts are not accomplished, the parties do not blame each other.

After completing the sales forecast, the next step is the elaboration of an order forecast. And in this case it is exactly the same as in the sales forecast: we need to indicate in what stage of the process each organization is to determine which part will elaborate it.

Once the scenarios have been set and the parties have agreed on who should prepare the orders forecast, it is time to identify the exceptions to the orders forecast made.

  1. Finally, the last major step is supply.

Depending on the competencies of each party and the conclusions reached in the initial agreement, orders can be generated by the supplier or by the customer. Regardless of these initial agreements, which may vary based on the resources, information systems or other key aspects, it is essential that every order complies with the agreed provisions and that the intention and responsibility of all parties to meet them remain incorruptible.

As a conclusion, it is worth mentioning that the first steps in the implementation of a collaborative model require a high degree of objectivity and transparency. It is especially important to clearly define the initial hypotheses, the performance indicators and a permanent attitude of information exchange. This is the only way to build trust, which is so essential in the early stages. Once the process is underway, everything is easier, but at the beginning we must be careful not to blame each other.

In short, we succeed together or we fail together.

The importance of logistics metrics

 

indicadores_kpi-510x312-450x275We can define logistics as the management of the company materials flow from suppliers to customers, in a way that the customer is reached in due time and at the lowest possible cost. Therefore, logistics is responsible for planning, implementing and monitoring the storage, the flow of goods and services, and the information regarding origin and destination, always according to the customer’s needs.

In logistics, like in many other fields, it is also essential to measure how we do things, as this is the only way to know where we are and how to improve our performance.

If we bear in mind that logistics accompanies the product or service throughout the process, measuring and knowing how to measure it is a key aspect. Indeed, one of the greatest challenges for companies is to implement indicators that allow for an efficient and effective measurement: real, useful data that can be easily interpreted. Only thus can we make the right decisions that lead to a continuous improvement of the service we provide to our customers.

In addition to using the data to make comparisons, both within the company and in front of competitors, data are also essential for organizational strategies.

The new technologies also play a crucial role in the logistics performance measurement. Thanks to these technologies, relationships and communications with suppliers and customers are closer, processes are much more flexible and agile, the information is more updated and accurate, and the most important –we dramatically reduce the effort to achieve it.

No doubt, when we talk about logistics performance, the companies with the most effective performance measurement system are those that are committed to innovation and have the right indicators, in line with their corporate strategies.

Through the logistics performance knowledge, assessment and continuous measurement, the aim is to ascertain the efficiency results and reach solutions to attain the highest performance possible within the supply chain. In short, it is to identify problems or areas for improvement and act accordingly, to determine the degree of competitiveness in the market, to maximize the use of resources and assets to boost productivity and efficiency and, of course, to reduce costs.

Integration of a logistics measurement system in the company

It is important to note that the aspects to be measured are only those that are important to the company. Therefore, the development of indicators should be only implemented on those activities and processes essential to achieve the company logistics objectives.

What activities or processes are to be considered as relevant to the objectives? The characteristics, needs and goals of each company will determine where to tip the balance, but we could generalize that the relevant processes are those related to receipt, storage, inventory, distribution, delivery, invoicing and information flows. We need to take into account that the indicators we implement have to be measurable, comparable and that enable us to take action to improve the quality of services.

Continuous improvement is also essential in this regard, as setting the indicators is not just defining them, but innovating in the metrics and improving performance. We shouldn’t be afraid to define indicators and realize after a while that they are not adequate. What we should totally avoid is not defining indicators for the fear of getting them wrong.

Benefits of logistics performance measurement

Perhaps the most obvious is that these measures allow to visualize the state of the supply chain, optimising the time spent diagnosing its health. Besides, it contributes to making the right decisions so that the improvements can be made in a shorter period of time; it helps to improve the service, which will have a positive impact on the relationship with the customer; and it allows the departments involved to take the necessary time to put the focus on global impact decisions and act on that basis.

In times like these of constant change and permanent crisis, it is more important than ever to optimize our resources and focus on what’s critical for our customers and our business, where the definition of indicators, monitoring and continuous improvement are key points to achieve it. Come on then!

From Integrated Logistics to Collaborative Logistics

logistica-colaborativa-300x259The term Collaborative Logistics is being increasingly used these days and it refers to an evolution of Integrated Logistics promoted by the current economic situation on a global scale.

Logistics operators are in constant search for new strategies that allow them to reach customers and offer the best price while ensuring a high quality service. This need has led to a trend towards collaboration between partners, customers and other members of the supply chain, the so-called “stakeholders”. These collaborations mainly consist of integrating resources for the mutual benefit.

Integrated Logistics was intended to optimize the management of information, material and product flows throughout the chain. Collaborative Logistics is meant to foster collaboration and teamwork towards tactics that contribute to the benefit of a group or a community.

 

Collaborative Logistics addresses the need to innovate with the aim of improving service to end customers and to the rest of the supply chain: suppliers, carriers and logistics operators, as well as quality auditors. In this regard, we need to develop strategies focused on providing effective solutions to business problems that affect all the parties in the supply chain. We can use the saying “there’s strength in numbers” to summarize this concept of logistics. Teamwork based on trust, transparency and convergence is key in technology solutions.

Three essential elements are the basis of any collaborative process:

 

  1. Teamwork based on trust and transparency that allows developing joint operations and strategies so that all parties involved are benefited. Thus, it is essential to define the objectives beforehand.
  2. A set of agreed rules to help cope with routine and unexpected situations.
  3. The various partners involved in the collaborative process must be willing to discuss difficult issues and negative aspects that may occur within the collaboration.

 

The intention is to improve the service quality, reduce costs and time, and approach administrative processes from a proactive attitude. These are some examples of the issue at hand:

Order reception usually follows a reactive model: the company waits until they receive the orders (via web, email, phone or others.). An implemented model of collaborative logistics consists of having the necessary information to anticipate and generate customer orders accurately in terms of time, quantity and delivery points.

As for the restocking of supplies, in general, the provider does not exactly know what we intend to buy, in what quantities and on what dates. Using the collaborative method, he would have the necessary information (inventories, consumption rates …) and he would improve his service and be able to provide it automatically.

The same applies to freight and logistics operators. If both had access to the necessary information, the result would be a significant reduction in costs and time for both parties.

Likewise, any other external agent or freelance provider who renders a service could be smoothly integrated in a collaborative community.

The New Information and Communication Technologies (ICTs) have become powerful tools for improving supply chains. The growth of electronic commerce and the need to improve processes towards the collaborative category have made ICTs an essential strategic element in terms of operability and productivity, as well as profitability. Some of the most widespread technologies today, besides the usual barcodes, RFID and EDI systems, are some web systems along with CRM and BPM tools. They all aim to contribute and help to share information between customers and suppliers. However, we need to resort to “The Cloud” as the quickest and most effective system for data sharing and managing the entire information flow.

In addition to the companies and the end customer, the concept of collaborative logistics also offers a side benefit to the environment. Because of the need to use fewer devices and tools and, therefore, lower fuel costs, the result is a dramatic and necessary reduction of CO2 emissions into the atmosphere.

As there are only advantages, we just need to decide when to get down to it…