From ocean ports, to trucking companies and air freight, three key pillars underpin the next-generation supply chain, according to a recent Deloitte report. These are a connected community, holistic decision-making, and intelligent automation.
As the global population continues to grow, urbanize, gain purchasing power, and shift to e-commerce, the logistic industry finds itself at an inflection point. At the beginning of a revolutionary transformation, the industry is beginning to implement enabling technology and new business models to match package volume demand and keep abreast of client and consumer expectations.
The first of the three key pillars in the next-gen supply chain, according to Deloitte, is “connected community,” or the ability to connect with partners to see across the network. Smart ports in Hamburg and Rotterdam, for example, already have integrated data platforms that exchange information on arrival and departure times with participating ports, shipping lines, and marine terminals. The real-time data exchange has driven optimized ship offloading, with a 20% reduction in dwell times.
Some platforms are even taking digital freight end-to-end. Cainiao, a firm which connects e-retailers with end-to-end logistics, has amassed more than 90 trucking and air carriers, six digital fulfilment hubs, and 266 IoT-connected warehouses. The firm uses AI-powered applications to match shippers with lowest-cost and fastest routes, and already processes 42 million packages per day.
The second pillar identified by Deloitte is holistic decision-making, or the ability to harness and harmonize data to continually learn and optimize. Though most logistics firms are already data-driven, the time gap between data collection and action is compressing.
A mix of new data sources from connected assets (such as IoT warehouses and trucks) can be used to harmonize transportation and inventory management, enabling greater agility and throughput.
Maersk, for example, already has a fleet of 270,000 IoT-enabled cold containers, transmitting data on temperature and location. DHL, meanwhile, announced a goal of 10,000 IoT-connected trucks in India by 2028, aimed at delivering 95% reliability on inventory and temperature tracking.
In retail, sensor data is being used to tackle inventory management problems – including overstocks and out-of-stocks which cost the US retail industry an estimated $2.1 trillion.
The final pillar is network automation, with the outlines of a global, touchless supply chain already forming. Autonomous cargo ships are in development, with some ports already boasting a fully robotic offloading process. Warehouse robots that can lift, move, and sort are also gaining in dexterity and use.
Numerous firms are advancing autonomous vehicle technology, with many focusing on trucking applications. Last-mile automation, including drones and droids, is also moving from concept to pilot projects.
“Over time, a global population of consumers demanding greater delivery volume, speed, flexibility, transparency and convenience will force players to adapt. To get started, organizations should define their future ambitions and where to play in the future movement of goods ecosystem,” said Michael Daher, principal at Deloitte Consulting and US transportation practice leader.
“Guided by a strategic vision, organizations can begin examining how the foundational pillars, connected community, holistic decision-making and intelligent automation, can help them win in chosen segments and markets – and the foundational and emerging capabilities required to enable those pillars.”