Prior to the Coronavirus disease (COVID-19), today’s global internet economy had radically altered supply chains, as more companies looked to introduce new efficiencies and expectations to the expansive and complicated workflows dominating logistics management. Now, in the face of a pandemic that has disrupted supply chains and turned economies upside down and turned up consumer demand with online ordering, companies must adjust both their mindsets and their processes to keep up.
For those in charge of leading these initiatives, that means understanding the key changes defining the logistics space right now. To get started, here are five steps that leaders can take to meet the moment.
The last 20 years have been defined by an unbridled digital transformation that, along with bringing millions of platforms online, has produced a deluge of data. This era of big data can be expansive, driving company-wide efficiency and effectiveness standards in every industry.
However, what started as a slow, gradual transition has transformed into a sprint. Notably, IBM estimates that 90% of the world’s data was created in the past two years to the tune of 2.5 quintillion bytes every day.
As a result, companies trying to derive supply chain insights are drinking from a proverbial firehouse, awash in resources but unable to process and distill this information into an actionable form. A 2018 Forrester study, which was conducted just as big data started becoming excessively large, found that 73% of an organization’s data goes unused, meaning today’s companies are only deriving limited insights from the information they collect.
Therefore, no matter the department, the present demands call for a new focus on fully utilizing the data you’re already sitting on.
When it comes to making meaningful decisions based on big data, few technologies are moving the meter as much as artificial intelligence (AI).
Not only is this technology increasingly equipped to derive insights from vast swatches of company data, but, when coupled with developments in Internet of Things (IoT), it will transform the manufacturing and shipping industry.
For example, companies are automating supply chain decisions based on weather events, geopolitical climate, global shipping data and container sensors. As the AI models are implemented and large amounts of data flows through the algorithms, these systems become smarter over time. Activities that were once manual are now automated with higher degrees of accuracy and lower rates of re-entry error.
Growers are able to predict crop yield with greater precision due to machine learning models that, when combined with on-phone cameras, can automatically count the kernels on a single ear of corn. As that grower takes samples throughout their fields, the yield prediction gains accuracy and profit becomes more predictable.
3. Bring on the blockchain
Few technologies today garner as much interest and intrigue as the blockchain. For companies managing complicated supply chains, it’s poised to make a significant impact in 2020.
Notably, the blockchain can combine information from IoT devices with a tokenized data transfer mechanism to provide clear, transparent records at every point of the supply chain. The blockchain takes automation to an entirely new level while bringing unprecedented transparency to the process.
At the same time, this technology is lauded for its ability to identify and track processes, leading to significant improvements in the authenticity and integrity of shipped products. Consumers are increasingly demanding more insight into the shipping and receiving process, and blockchain technology, when coupled with other technologies, can allow companies to provide this service with ease.
While this has implications for virtually every industry, some of the most obvious examples of this include high-risk cargo like pharmaceuticals, biologic agents, produce, livestock and medical devices.
At the very basic level, having an immutable record that can show the chain of custody for a given product will protect companies and people from fraud.
4. Fight for 5G
All of these priorities, from effectively utilizing big data to integrating IoT and blockchain technology, will be made possible by the introduction of 5G, which brings lightning-fast connectivity anywhere, allowing every aspect of the supply chain to flourish.
As a result, onboard telemetry has greatly improved for agricultural, construction, and forestry equipment, improving performance and reducing downtime through predictive maintenance. However, these pieces of machinery are being operated in areas that have been traditionally “dead zones” for data connectivity—remote mines, disconnected farms and dense forests.
Having a blanket of 5G coverage will allow these assets to be managed in a more efficient manner, and having insight into their usage will allow for a higher level of productivity not seen to date.
5. Gradual is good
Change is scary, and many organizations may not need to rip the Band-Aid of old processes off in one fell swoop. Instead, consider running new digital processes in parallel with specific products or processes. This can give all stakeholders an opportunity to get on board.
Status quo interaction is a real thing, and breaking emotional attachments to established methodologies is no easy task.
Incredible efficiency and accuracy can be gained by digitally augmenting high-touch customer and employee interaction points, but only if those experiences are adopted in a meaningful way.
The final word
The digital age is challenging assumptions about established practices, as new capabilities allow companies to rewrite their rules that propel their efforts forward. However, change itself isn’t the goal. In fact, ambiguity about direction and purpose can confuse customers, disengage employees, and muddle the waters of improvement.
By focusing on the trends that matter most, logistics leaders can forge a clear vision that rightly allocates resources toward the ultimate goal of a better, more profitable system.