Impact Of Logistics Chain Over the Next Decade
In today’s fast-paced world, the efficiency and sustainability of the logistics chain is one of the most difficult and time-consuming hurdles that every business must face. A smooth transportation process through different distribution channels will improve the relationship between suppliers and the customers, significantly impacting the bottom line.
The Future of Logistics – How Technology Will Impact the Logistics Chain Over the Next Decade
Over the course of the next decade, there is no doubt that new technologies and logistics will go hand-in-hand, as rapidly evolving technology changes will have a profound impact on the logistics industry. The future of logistics will be tied to a great extent to this emerging technology in many ways. This discussion will center on some specific technological developments which are already occurring, some which will either be refined over the next ten years or are expected to be introduced.
Technology and 3PL Companies
Currently, some 3PL companies have only begun to play with these new technologies which will be used to enhance processes in the near future, others are energetically gearing up for the challenge.
3-D Printing is one of those technological advances which many companies are interested in, and in a recent 3PL Selection and Contracting Survey, more than 40% of companies wanted contractors to provide knowledge and expertise in this area. Almost 20% of contractors were in fact, already using 3-D Printing, but only a minuscule 1.5% could actually provide any real expertise in the area.
The Internet of Things (IoT) is technology which has gotten a tremendous amount of buzz for its ability to connect devices to the internet for feedback and improved performance. In the logistics industry, this will be used to decrease waste, increase speed, and lower overall costs for manufacturers.
Driverless vehicles is a technology that could provide enormous cost savings for manufacturers and transportation companies, and for that reason 42% of them want 3PL companies to have this kind of capability and expertise. At present, only about 1% of contractors are actually able to offer any kind of support for driverless vehicles, but look for that to change during the coming decade.
Delivery is About to Become More Complex and Much Cheaper
There won’t much change over the next decade to the upstream part of the distribution model, because factories are not easily relocated. However, the downstream portion of that model will change significantly as distribution centers become far more sophisticated. The flow of goods between factories, distribution centers, and consignees made along the way before reaching a consumer, will be drastically altered, driving costs down.
There are several technological advances which will make this possible. About half the total cost of delivery is currently allocated to transportation and the fuel required by carriers. Soon, driverless electric vehicles which operate at night on pre-selected optimized routes will wipe out a big chunk of that cost. Drivers which are currently needed to perform the moves will also be reduced significantly.
Another element of efficiency will be introduced as distribution centers are relocated closer to the end-consumers so that next-day and same-day delivery is achievable for many other products not currently served by Amazon and other consumer goods companies. This will call for some creativity, such as constructing multi-story centers situated close to heavily populated areas.
Faster, More Efficient Picking Processes
One of the biggest time wasters in any warehouse or distribution center operation has always been the slow pace to retrieve goods by stock pickers. The future of logistics will feature the automation of this painfully slow process because it’s one of the last activities in logistics which has yet to be improved by technology. But that change is on the way.
In years past, Amazon has hired as many as 80,000 stock pickers to manage the holiday rush for buying online. This past season, 10 of their American warehouses were outfitted with 15,000 new stock-picking robots as a trial to determine the level of efficiencies gained. While the robots performed well, there is definitely room for improvement, and when that technology is refined, there will be a quantum leap in the speed at which stock picking can be performed – not to mention the savings in labor costs.
Unmanned Aerial Vehicles
This is a technology which is already being adopted, and which has enjoyed widespread application for military uses, as well as for aerial photography. Many experts in the logistics industry believe that UAV’s are an essential component of the logistics of the future since they could inexpensively deliver all kinds of packages to consumers, without the need for drivers or vehicle costs.
Rather than developmental issues, the holdup with broader implementation of the technology centers around a debate over whether it can be used safely, so as not to interfere with commercial airborne traffic. The cost of delivering goods via UAV’s is known to be about five times cheaper than through conventional methods, so when some of the regulatory issues are resolved, unmanned drones are likely to become a significant part of the logistics chain of the future.
If you’re thinking about the little blind mammals, that’s not quite the intent here – but it isn’t far off either. A company in Northampton, UK called Mole Solutions, is currently experimenting with underground tubes which can deliver palletized goods at a fraction of the time and cost of normal delivery methods. Of course, the infrastructure for this underground tube delivery of goods is totally lacking at present, but in another 10 years, it’s entirely possible that much of it will be underway. The potential for saving money on transportation and labor is staggering, and that makes it all the more likely that it will become part of the supply chain of the future.
Automated Guided Vehicles
Automated guided vehicles (AGV’s) are robots which carry out tasks in a factory setting, where manual labor presently supplies the skill and energy necessary for their accomplishment. This technological advance which is making the newest incarnation of AGV’s more proficient is highly accurate 3-D cameras, which provide precise information about all movements in proximity to the machine.
Laser scanners are also used to detect motion, and 3-D mapping of the manufacturing layout makes it possible to coordinate every given location with the map, so as to avoid accidents and problems. Employee safety is improved, and whenever it becomes necessary, the vehicle can stop, reverse direction, or navigate tricky areas such as corners. These machines take less energy than conventional fork-lifts, and they are faster, more efficient, and more accurate. Expect to see AGV’s making greater inroads into the manufacturing environment in the very near future.