As supply chains worldwide come under renewed pressure, the role of logistics in the digital era has become increasingly apparent. Ecommerce, global manufacturing operations, and cross-border businesses all rely on the movement of goods - and when one link is under strain, entire chains can be affected.
While technology has been the driving force behind many advancements in logistics, it has also posed some significant challenges. Ecommerce, for example, has decentralized distribution to a degree that would have been unimaginable even a decade earlier.
Recent surges in the price of shipping and other supply issues have all bought logistics into sharp focus. Where before it was hidden from the consciousness of consumers and everyday life, the importance of logistical operations is now very much in the public domain.
The Vitality of Logistics
As the digital economy takes hold, the role of logistics has evolved and has needed to become more complex. The so-called “Amazon Effect” on e-commerce businesses delivering to the door of customers has moved from next-day to same-day, with barely anyone noticing. There are more pickup and delivery points than ever before.
And the volumes are unprecedented. According to FedEx, package deliveries are expected to hit 100 million a day by 2023 in the US domestic market alone, with e-commerce accounting for 96% of that growth.
These trends present a wealth of opportunities for logistics companies, such as new sources of revenue, an increase in last-mile demand, and more customers. However, it poses significant challenges, including low-profit margins, high resource demand, and increased complexity.
The vitality of logistics has never been more visible than it is today. Delivery drivers take up a large portion of the gig economy, the story of a ship blocking the Suez Canal hogged the headlines globally for a week, and even the pressure on energy prices is down to strained supply chains.
There is no doubt that the most digitally mature logistics companies that adapt and evolve will thrive.
How to do Logistics in the Digital Era
Whether you are a third-party logistics provider or an in-house operation, it is essential to be prepared for the digital era that’s already well underway. This will not be yet another post simply calling for more automation and real-time visibility - these areas are well covered. Instead, we will show you how to do it.
Integration is King
The first factor you need to consider is integration. This will be essential in terms of driving your business towards digital maturity. The first step is to bring together the data streams into one platform, such as an advanced API management solution. Once you’ve integrated the data, you have the foundation to pursue the next big thing in logistics.
And it’s not 4PL.
Embrace the Supergrid
Noted by DHL as one of the highest impact trends in the forthcoming decade, the Supergrid concept is essentially the integration of all things logistics. Here’s the definition set out by DHL:
“Going beyond 4PL logistics and logistics marketplaces, supergrid logistics refers to the next dimension of consolidation, orchestration, and optimization of global supply chain networks, integrating swarms of different production enterprises and logistics providers. This opens up new business opportunities for various players, including established 4PL providers, specialized companies, and even smaller local couriers and startups.”
As the logistics giant indicates, the Supergrid concept can transform global supply chains. Using warehouse management software (WMS), e-commerce platforms, and other cloud-based distribution solutions can help your business integrate internally and with other parties in the supply chain.
By embracing the Supergrid concept, your business will be moving with the times and slotting into an increasingly complex supply chain. The idea is to implement an open network that can operate with other systems, including those from third parties.
The reality is, unless you are a multi-billion dollar organization like DHL or FedEx, you will not have the resources to do everything. Therefore, by operating with partners and other stakeholders across the supply chain, you will be able to win clients and retain business.
AI is Now a Necessity
The emergence of AI was the dominant theme of the 2010s, particularly during the latter half. We are now almost two years into the 2020s, and AI is no longer emerging.
It is a necessity.
The key is not to take AI on its own. It has developed with other new technologies such as machine learning, increasing computing power, and big data. A famous example of these three concepts in action was demonstrated in a video by Ocado, a British online grocery retailer, showing robots packing orders from thousands of customers each day.
Billed as the Factory of the Future by the Economist in 2018, there’s no doubt that the future is here right now. The likes of Amazon and other e-commerce giants have taken this technology to a new level by trialing deliveries with drones.
While some of these trials may appear to be gimmicky, and some are, they are indicative of the way things are going.
You Cannot Ignore Big Data
Due to digital transformation, supply chains throw out a vast amount of data and critical information. The challenge is to capture the data and use it efficiently. Using data management solutions, like DiCentral’s EDI software, you can control the flow of information, remove any duplicates, and resolve errors quickly.
Given the importance of data to AI and machine learning technology, having a clean, accurate set of data will be the bedrock of your business.
It will also optimize other key integration technologies like APIs, which in turn fuel the rise of the Internet of Things (IoT).
Universal Adapter at the Heart of Logistics
To bring each of these elements together, you will need APIs. They serve as the engine room of digitally mature businesses, funneling optimized data between different systems and third-party partners. As a logistics company, you will be occupying an essential role in the supply chain, and integration is vital.
APIs make this more accessible and with an API management platform, you will be able to retain complete control over operations and data.
The key is to incorporate APIs into a wider integration strategy. Data, technology, and concepts all need to sync in order to deliver the results your clients demand. The world of logistics is becoming more complex, but by reaching digital maturity you will be able to meet the challenge and thrive in the new era.