The Role of Technology in Transforming Global Logistics

Technology is booming like never before, and what's cutting edge now might be obsolete in the coming years. Such rapid advancement leaves companies scrambling to keep up, but the benefits are often well worth it. Logistics and supply chain management have seen massive growth and are expected to grow at an accelerated rate. 

Global supply chains have become increasingly accessible thanks to rapid deliveries, the evolution of transportation and the use of integrated technologies that make communicating and tracking inventory virtually instantaneous. Rapid responsiveness means consumers get their products sooner, while companies have ample opportunities to fine-tune their logistics to make their supply chain more efficient.

Innovation continues to drive the same rapid advancement in technology, and many have turned their sights on solving modern logistical challenges. From demand forecasting and inventory management to ensuring final-mile delivery is completed without a hitch, technology makes supply chain logistics easier, safer and more efficient than ever. 

Key Technologies Used in Logistics & Supply Chain Management

As technologies grow and evolve, so do the industries reliant on them. In logistics, key emerging technologies set the stage for improved supply chain management, resulting in happier customers. From improving delivery speeds to creating virtually instant data analytics reports, these technologies continue to transform the logistics industry.

Automated Warehouse Management Systems

Automation is slowly replacing the need for human manual labor. While the logistics industry once relied on human labor for everything from packing and picking to shipping and delivery, robotics and automated warehouse systems have become more common.

An automated warehouse management system is software that helps manage and automate warehouse operations. It can capture data, track inventory and direct workers efficiently. However, other technological advancements, such as robots capable of sorting and packing goods, also set trends in today's warehouses. 

Robotics help you save time and labor by reducing the need for lighting and temperature control, and you can stack goods higher without being concerned about potential worker safety. This can be a game changer for warehouse optimization.

Internet of Things Devices

IoT devices help boost monitoring and tracking in the supply chain. Businesses utilizing IoT devices typically see better inventory management as they follow products, raw materials and deliveries across the supply chain. These devices can also help with demand forecasting, fleet management and real-time tracking. They can be particularly crucial for cold chain logistics providers, as they monitor and provide live data about temperature and location.   

Blockchain

While many think blockchain technology is specific to cryptocurrency, it extends far beyond Bitcoin into supply chain management. A blockchain is a decentralized ledger that records transactions in a tamper-proof way. It allows transactions to be distributed without a central intermediary.

With blockchain, businesses can trace every step of the supply chain process, improving transparency and security. From sourcing to distribution, every movement can be verified to reduce miscommunications and identify potential risks or unauthorized modifications.

Artificial Intelligence and Machine Learning 

Both AI and ML have become essential to logistics providers. Experts predict that by 2030, AI will be one of the most important technologies in the industry, thanks to its ability to outperform humans in essential repetitive tasks. AI and ML can optimize routing to find the most efficient ways to ship products to customers, rely on historical data to forecast demand and provide insight into predictive maintenance by tracking the performance of machines.

AI also supports data optimization with natural language processing and ML. By quickening the process of data analytics far beyond any human analyst's capabilities, AI allows for virtually instant information processing, from historical to real-time data, to optimize the supply chain. Other AI tools, such as digital twins, allow for real-time simulations that can help reduce risk, create agility and allow experimentation without affecting the company's bottom line. 

The Role of Technology in Optimizing Logistics Operations

Optimizing logistics operations is critical for businesses and offers key benefits, such as reduced costs, improved efficiency and improved customer satisfaction, which result in higher profitability for companies.

Fortunately, cutting-edge technology helps achieve these benefits. Investing in technology can improve operations by:

• Ability to monitor stock levels in real time: The last thing a company wants is to run out of stock and lose out on sales. Rather than waiting for human workers to tally up inventory numbers, several technologies offer real-time inventory tracking. AI-powered IoT technology can tell companies exactly how many products are in stock, when the next shipment arrives and when they should increase or decrease stock to avoid stockouts and overstock situations. 
• Route optimization: Transportation is one of the biggest challenges faced by the logistics industry. Inefficient route planning can result in longer delivery times and unnecessary transportation costs. AI plays a critical role in transportation management systems, analyzing data in real time based on traffic, weather and regulatory constraints to identify the most efficient way to transport goods.
• Improved transparency and control: Supply chain logistics requires transparency and control for optimization. Companies should know where their goods are at every stage of the supply chain to keep them flowing while avoiding overstocking or stockouts. This requires location tracking, which is easily accessible through modern technological advancements. GPS tracking, RFID and barcode scanning help support transparency as inventory moves through the supply chain.

Implementing these tools can be difficult for smaller-scale companies. However, partnering with third-party logistics providers can help. These providers often offer affordable, extensive turnkey logistics services.

Benefits of Technology in Logistics & Supply Chain

Many factors drive the continuous advancement of technology in logistics and supply chains. Consumers expect same- or next-day deliveries when they purchase a product, and there's regulatory pressure to improve logistics and reduce environmental impact. As costs for supplies, materials, labor and transportation continue to rise, companies face increasing pressure to reduce operational costs without sacrificing quality. 

Implementation of industry-standard and cutting-edge technology offers the following benefits.

Lower Operational Costs

Reducing operational costs is key to increasing profits, and technology can help. Predictive analytics and demand forecasting make it easier for companies to know how much product to stock based on historical data and seasonal fluctuations. Automation also assists in reducing operational costs by removing the need for human labor. While some costs are associated with purchasing and maintaining the machinery, robotics can make repetitive tasks more efficient overall.

Improved Delivery Speed

Route optimization only scratches the surface of improving delivery speed. Efficiency also comes from an uptick in autonomous delivery systems. Autonomous delivery involves using robotics to transport goods without a human driver. Using autonomous vehicles and delivery drones improves last-mile delivery services and is expected to become more prevalent in the coming years.

Better Decision-Making and Fewer Errors

Data analytics and ML models assist in improved decision-making. These tools provide sophisticated analysis and interpretation of large data sets. The AI-supported analytics lead to more accurate predictions, which improve companies' logistical decisions. Seasonal fluctuations, current market trends and inventory optimization, which are supported by technology, help improve companies' bottom lines. 

Greener Logistics

Supply chains put a massive strain on the environment, from producing greenhouse gas emissions to burning renewable fuel. While recent regulations have pushed for the advancement of sustainable procedures, companies have another incentive to adopt green logistics: brand reputation. Consumers are increasingly searching for sustainable brands, making this a lucrative switch from a marketing perspective. 

Modern technology makes it easier to implement sustainable practices through route optimization, which can reduce fuel consumption. Additionally, using more efficient packaging allows more products to be shipped and stored in the same space, further reducing environmental impact.

How Technology Enhances Customer Experiences in Logistics

Companies have a vested interest in ensuring customer satisfaction. Without customers, there's no demand for products. Companies can implement modern logistics technology to remain competitive in the current market and improve customer experiences.

• Real-time shipping updates: Keeping consumers in the loop with their shipments helps build trust in your brand. Real-time shipping updates help facilitate this, thanks to RFID and GPS tracking. It also allows companies to create real-time notifications about deliveries and delivery time windows, and precise ETAs and punctuality encourage repeat customers. Real-time tracking also provides visibility that improves delivery reliability. 
• Flexible delivery schedules and self-service options: Enhanced technology integration lets consumers choose flexible delivery schedules that work for them. For example, many companies allow consumers to choose between delivery speeds and opt for fewer packages and a longer shipping time. Many modern advancements also accommodate self-service options, such as having deliveries sent to specific retailers or mailboxes for pickup when it's convenient for the customer.  
• Improved delivery range: Optimizing a company's supply chain logistics through technology can improve the delivery range. It's increasingly common for companies to have inventory stocked at strategically chosen warehouses across the country or world so it can be delivered quicker, even in remote or rural locations. Expanding the delivery range can result in more satisfied customers and improved sales. 
• Simplified returns: A company's interaction with a consumer doesn't always end after a product is delivered. Sometimes, things go wrong, and a consumer needs to return their purchase. Reverse logistics handles goods and services that return to the supply chain. Customers trust companies that offer robust return policies if their product is defective or doesn't work as intended. Technology helps improve customer satisfaction during the return process by allowing for quick retrieval or replacement and the ability to track their return and refund. 

Implementing technology in the supply chain has significant benefits for consumers and companies. This win-win solution can help your company foster a loyal consumer base while optimizing logistics. 

Challenges & Future Trends in Logistics Technology

The logistics sector faces many challenges. However, future trends in the role of technology in logistics strive to erase these obstacles and help the industry continue to grow. The global logistics market is expected to have a compound annual growth rate of 11.5% for the next several years, resulting in the industry growing from $258.7 billion in 2022 to $445.8 billion in 2027. 

Common challenges the industry currently faces include:

Data Breaches

As more and more logistics processes become digitized, the risk of data breaches rises. Logistics companies continue to be major targets for hacking, ransomware and data leaks that spell trouble for companies and their consumers. Logistics companies can take steps to prevent this, including:

• Keeping software and systems updated: Ensure any weaknesses in your software and systems remain patched to eliminate vulnerabilities. 
• Robust security measures: Training employees on the importance of security measures can help reduce the risk of data breaches. Implement two-factor authentication and strong passwords. Applying encryption to essential data through blockchain or other technology helps protect sensitive information, even if it's stolen. Unless the hacker can break through the encryption, any information they've stolen is rendered useless.

Need for Skilled Workers

Despite AI, robotics and ML replacing human labor for repetitive tasks, the need for skilled workers in logistics continues to rise. Labor shortages threaten the logistics industry, contributing to higher costs, increased transportation delays and reduced overall supply chain efficiency. Instead of requiring unskilled labor, such as warehouse workers and truck drivers, the modern logistics industry needs skilled, trained employees capable of utilizing the technology to its fullest.

This leaves logistics companies with few choices. They can attempt to hire new staff with the skill sets needed or upskill their current staff. Either way, companies must invest in training or recruitment or risk being unable to fully utilize their integrated technology. 

Integrating New Technology

To benefit the most from new technology in logistics, it must be integrated into the existing supply chain. This can be complex and result in significant costs, especially for companies relying on legacy systems that don't integrate well with modern advancements. Ensuring systems work together requires developers to focus on debugging, fixing and relearning software.

Team members, from warehouse workers to company executives, need to understand how to use the new integrated technology that's likely to continue to evolve. This creates a need for a company culture of continuous learning while routinely investing in continuing education to keep everyone on the same page.  

Over the next several years, industry experts expect several trends to continue dominating logistics and supply chain management. 

Drone Delivery and Autonomous Vehicles

In the coming years, drone deliveries and autonomous vehicles may help reduce the need for human labor for deliveries, decreasing the risk of accidents and harm to human workers. They could also reduce expenses to support human labor and delivery times. These tools operate using advanced technology, such as GPS, collision avoidance systems and advanced flight control tools. 

As autonomous vehicles, such as drones and trucks, become more sophisticated and air traffic regulations evolve,  drones are likely to make up a significant part of last-mile deliveries. The price to deliver a single package is expected to drop to as low as $1.50 to $2 in the future with further integration into the supply chain.

Big Data for Supply Chain Optimization

Optimizing the supply chain is critical for companies seeking to remain competitive, and big data powered by AI and ML processes provides the support needed to make it happen. Optimization can occur at any stage of the supply chain, and technological advancements continue to make this process more feasible for many companies. When AI can process massive data logs in seconds to spit out key metrics, real-time data and suggestions for optimization, it becomes an invaluable asset to any supply chain.

Digital Twins

Digital twins are virtual copies of physical assets and processes. They allow real-time monitoring of goods through the supply chain while opening the door for finding optimization opportunities and making agile decisions. Digital twins can also be employed to play with different scenarios. For example, a digital twin can simulate what would happen if a certain event occurred, such as a blizzard that closes an important route. That data can be used to plan alternative routes, making problem-solving easier when these events occur in real life. 

Augmented Reality and Virtual Reality Implementation

AR and VR provide several benefits to logistics providers, especially in training. These technologies can help employees develop hands-on experience without facing real-world risks. Through VR training, employees gain an increased sense of confidence and retain more information. These technologies can be pushed a step further, such as using AR headsets to guide workers through picking and packing and using VR headsets to simulate a real-world scenario, such as what to expect during peak seasons. AR and VR technology can also be a major asset to consumers who want to see what an object would look like in their space.

Conclusion

Modern technology paves the way for global supply chain growth in the future, reducing the need for human labor, minimizing the risk of human error and speeding up the movement of products. Adopting these new technologies is critical to remaining competitive in an increasingly digitized supply chain and world. Consumers aren't going to wait around for products they could receive quicker from another company, 

While companies have plenty of benefits to onboard these advanced technologies to remain competitive, resources to implement them can be a barrier. That's where partnering with 3PL providers comes into play. 3PLs specialize in supply chain logistics and operate them for other companies. By partnering with a 3PL, such as Atlas International, you gain the benefits of cutting-edge technology for a fraction of the cost of implementing them internally. 

Atlas International's logistics division uses the latest technology to help support your company, regardless of size. Whether you're overseeing a small start-up or a major company looking to outsource logistics to the pros, Atlas can help. As a full-service logistics provider, our team can help with everything from supply chain management, benefitting from first- and final-mile distribution, to tapping into our vast warehouse network with over 1,000 locations across North America. Reach out today to learn more about our logistics services and how we're prepared to provide customized solutions that work best for you.