We live in interesting times, when change is accelerating and technology is one of the key triggers, driving change in all areas, including in logistics. Logistics connects people, lifts economies and changes lives and, road transportation is the largest component of transportation-logistics.
I had the opportunity to moderate a panel discussion of leaders from the supply chain and logistics community recently and, am taking the opportunity to share my reflections around the same.
I think that the future cannot be predicted with accuracy, but alternate futures can be forecast. We can then work towards preferred future outcomes. We kicked-off the panel discussions with a helicopter view of future trends in logistics, leveraging internet technologies from 3 broad perspectives- Global & Social; Customer ie the Logistics User’s perspective and from the Logistics Service Provider’s perspective.
From a global perspective, we see climate change as a significant area of change driving demand for alternate energy & energy conservation in logistics. Countries & governments are beginning to realise, that we need to protect the environment or we are out of the game. Businesses are taking this up and we will continue to see developments around green logistics, saving energy in transportation etc.
- While technology with the always-on internet brings the world closer and, with reduced communication cost, knowledge becomes more accessible, yet from the social perspective, we see that the inequality between the incomes and achievements of the skilled worker and the unskilled worker would continue to increase. Extending this trend to the enterprise, we expect an increasing gap in competitiveness between technology savvy/digital businesses, adapting to technology and, the ones that are not. Employees as consumers of technology are bringing their personal devices & expectations to the work place and are then contributing to changing the way business itself is transacted leveraging technology.
- From a business perspective, the internet backbone is helping partners connect beyond the enterprise, businesses to deploy technology solutions globally and make transportation models more secure, flexible & dynamic. Open standards in most cases, makes solutions affordable.
From the customers ie logistics users perspective– Technology including internet technologies are driving the supply chain leaders/logistics users to seek deliveries even faster, cheaper, better and to also focus on climate change&values like transparency and conscience; Off course, during the tender process price would often beat conscience.
From the logistics service provider’s (LSP’s) perspective, we see trendsetting changes, establishing new service standards & cooperative efforts, green business etc.
- On the demand side of logistics services, we see the impacts of- Offshoring/near shoring & outsourcing would create new possibilities, the supply chain expands in all directions; urban logistics is becoming important; LSPs become consulting companies, offering complementary services to add value; risk management would become core competence of LSPs, given the disruptions due to climate change, geopolitics and terrorism…
- On the execution side of logistics services focused around technology, we see the benign impact of-lower cost of sensors ( RFID, GPS, camera, IR sensors etc), lower communication cost (IP, 3G/4G, wiFi, pvt networks), and availability of applications ( including big data analytic s for decision support) . This is broadly the 3 layered business-technology architecture ( sensors-communication-application) of the internet of things ( IoT) and is enabling -Intelligent low cost logistics including road transportation solutions.
In one of my previous assignments, I had the opportunity to lead the conceptualization, stakeholder management & implementation of a solution at our business units, leveraging RFID , GPS , mobile telecom and internet technologies over a GSM communication network, integrating the same with custom built applications for vehicle & container management, averaging over a 700+vehicles+containers per day, in each of our 4 public facilities. The implementation took over a year and succeeded in great measure, since we made a part of the overall solution, addressing business issues around safety, efficiency and customer interaction.
We benefited from improved operational efficiency, by way of
- Improved transit time between the port and the facilities and, truck turnaround time within the facilities.
- Cargo safety, security with less people looking for cargo in the facility
- Enhanced asset utilization by matching return loads and minimizing idle asset running.
And from improved customer interaction
- Aggregating demand for delivery, pickups, inspections etc that allowed customers to asses & access the status of their cargo 24 x 7 x 365,
- Improving interactions and improving the quality of feedback etc
Internet of things (IoT) implementation however would initially encounter challenges of inter-operability, security and I am not sure that a ‘bill of rights’ of sorts exists for what data service providers collect and leverage using IoT. While manufacturers of various devices spend considerable efforts in connecting or providing connectivity to devices, from a consumer’s perspective, we would need to be sure that there is no need to replace the toaster, so that it can inter-operate with the coffee maker and, what would the service providers do with our individual data.From a business user’s perspective, we understand that the larger players in the supply chain eg large retailers, would drive demand for inter-operability and security in the solutions that they implement. Taking an example from the government perspective, I understand that the People’s Republic of China mandated the use of standard GPS devices in commercial vehicles including sightseeing buses, passenger and road transportation of heavy cargo etc. This can lead to immense possibilities around dynamic monitoring, intelligent navigation, fleet management & value added services (VAS).
During the panel discussion, we agreed on the need to carry out transportation route-audits post implementation of geo-fences to improve control and review transporter performance data, with a view to improving operational efficiency. Regarding demand aggregation for inter-city movement, we felt that the support of a strong broker network would be needed for e-marketplaces to succeed in the inter-city road transportation sector.The key to success, as we all agreed is to deploy technology in the supply chain as a part of the solution to business problems, taking a process view and looking at technology’s lifeblood ie data.
I am very optimistic about the future of logistics services, with technology being deployed for demand aggregation and IoT implementations proliferating; the supply chain including road transportation, would get more efficient and collaborative.
Thank you for reading through. If you have inputs around optimizing long distance road transportation leveraging IoT, pl share.
Managing Partner, Founder, Apex Group