Home Logistica Digital Transformation in Logistics: Logistics 4.0

Digital Transformation in Logistics: Logistics 4.0

The exponential growth of online commerce worldwide promotes the acceleration of a trend that is changing the business world in all sectors: digital transformation.

Augmented reality online shopping concept. E-commerce and digital marketing. Hand holding digital tablet smart phone use AR application to check order pick time on storage factory background.

The exponential growth of online commerce worldwide promotes the acceleration of a trend that is changing the business world in all sectors: digital transformation.
This is putting pressure on systems within the existing supply chain. The logistics services sector is estimated to reach a value of $ 16.445 billion by 2026. The confluence of forces between Amazon and Alibaba, automation and robotics, electrification, and sustainability, among others; will change the logistics industry to become a more efficient, fast, and adaptable sector to consumer needs.

Digital Transformation through the value chain.

Technologies such as sensors, IoT, data analysis, and robotics in specialized applications, are already applied in the logistics sector. For example, autonomous vehicles, and technologies for telematic monitoring, such as the one previously discussed in this previous blog post:

The future of road transportation: Driverless Trucks

In this blog post, I explained the case of Peloton, which has created an interconnected truck train system that reduces operating costs. Another interesting technology is the one developed by the startup Locomation and applied in a pilot version by Wilson Logistics. This technology proposes a complete autonomous driving solution for heavy trucks. In this case, their innovation goal is to increase safety and efficiency for road transportation.

Innovations in warehouse robotics are aimed at solving the logistics sector’s chronic labour shortage, with technologies from automated forklifts to robots for the picking task development.

Digitization of operational processes is another of the great importance areas for digital transformation. Operations such as phone calls and faxes for orders and shipments are not efficient, mainly because they lack transparency and progress tracking shipment visibility. Digitization can provide real-time data on all aspects necessary for task development (available containers, rates, etc.), which allows us to streamline and monitor processes.

Digital Transformation is modular

Processes digitization, as well as the implementation of new technologies, should not necessarily be implemented using a quick method or betting on an “all or nothing”. Modularity for an intelligent digital transformation is a feature of gradual, assimilated, and assimilable implementation. That allows the correct systems to flow towards sustainable progress and, above all, scalable. These companies’ digital transformation processes will become the norm, with the tangible need because of the times we are living, not only for business development but also for the long-term sustainability of company processes.

This logistics’ modular digital transformation can be divided into three basic areas: Warehouse management, plant logistics, shipping, and distribution logistics.

Warehouse management automation

Excess stocks, large volumes of different types of merchandise, and difficult access to relevant and up-to-date information are the most common reasons for seeking modernization and automation of warehouse management.
It is necessary to guarantee the correct identification of materials and goods, as well as in-and-out warehouse movements. Real-time data generation, which is easy to consult, can begin to solve problems that plague modern logistics, almost by tradition. In addition to data collection and analysis, optimal storage automation and warehouse material picking are useful to prioritize operations within the warehouse according to the management system that you want to implement.
The goal is to transform the warehouse from uncontrolled to controlled, using mobile technologies for holistic communication, IIoT (Industrial Internet of Things), digital twins, AI, among others. These are technologies that allow the dynamic management of processes in the warehouse, with the possibility of intelligently adapting to current demand based on a series of criteria, such as storage positions occupation, goods or materials turnover rate, seasonality, etc.
Eliminating warehouse management human interference could be the last stage of warehouse management digitization. An autonomous warehouse with a custom-built infrastructure; robots and automated stackers, autonomous vehicles, intelligent picking … All the technologies combined in a personalized “dance” to satisfy the specific and unique needs that the warehouse may require.

Intralogistics Intelligent Management

Vehicles that do not work, production lines’ late or insufficient services, lost components, these and many other reasons force companies to seek to optimize their intralogistics processes.
To optimize intralogistics (plant or manufacturing logistics), mainly requires in-depth knowledge of all the processes and systems within it. For this, the analysis and collection of data that allow generating knowledge to automate logistics flows, as well as the processes standardization focused on a supply plan, are the first steps towards intelligent optimization that generates solutions in real-time.
Human Capital Management is one of the intralogistics optimization priorities. Using data it is possible to create systems for operators to work on a prescribed schedule, where the same system automatically creates and assigns tasks to personnel taking into account their actual workload and expected workflow. The objective is to eliminate downtime and activities that lack added value, as well as monitor the assigned task fulfilment.
A total Intralogistics digitization would be focused on the Big Data and predictive models results, with fully automated systems, M2M (machine-to-machine) communication, generating more interaction and real-time data exchanges.

Shipping and distribution logistics

The low effectiveness of picking and dispatch processes, poor or insufficient control of order/delivery integrity, or the delivery process lack of flexibility, are among the usual factors for the shipping and distribution logistics digitization.
Like the previous phases, automation is the goal of shipping and distribution logistics. Orders and deliveries distribution dynamic management, forging evaluation, and selection systems coordinated with inventories and prioritizing deliveries according to certain characteristics; are the elements for modular digitization during this phase.
Based on Big Data analysis, it is possible to produce customers predictive patterns, to configure products inventory, machinery, and human resources. Artificial Intelligence can facilitate the delivery processes’ dynamic and operational management in a fully automated way. The neural networks created by the AI will allow predictive management, where relevant patterns can be distinguished with anticipation of delivery preparation. An attractive alternative to solve and accelerate solutions to the Last-Mile Delivery challenges.

Last Mile Delivery, the great and imminent logistics challenge.

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

Logistics companies must work proactively and attract smart digital talent to compete, stay efficient, grow in new areas, and deliver value for customers. Logistics companies must be agile in developing digital solutions to keep pace and maximize profits.
Digital Transformation and new technologies are fast becoming irreplaceable tools for the necessary supply chain transformation. New technologies are critical to optimizing capabilities, enhancing performance, and improving quality while ensuring supply chain efficiency. More and more companies are turning to innovative solutions capable of harnessing the potential offered by digital technologies. It is time to look forward, and according to the possibilities and characteristics of each company, to implement and study solutions to enter the Digital Transformation Era and grow with it. It is the only possible option if we want to be competitive and survive.

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1 comment

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Rachel Smith -

Really informative read, Ignasi! Digitization has significantly transformed the supply chain in recent years. It not only streamlines business operations but also ensures enhanced mobility that results in better communication and collaboration between the team as well as the customers.

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