The global financial impact from cargo loss as products journey through the supply chain was estimated to be $60 billion in 2016. This astonishingly large figure demonstrates the urgent need for an overhaul of our outdated logistics systems.
Fortunately the world of logistics is on the cusp of a radical transformation – fuelled by the powerful combination of mobile computing, analytics, and the cloud. But although this opens up fantastic opportunities, many global organizations are struggling to change fast enough to remain competitive in such a rapidly evolving market.
Against this fast moving backdrop, it is easy for poor decisions to be made that will impact an organisation’s bottom line considerably if left unchecked. This is a huge global issue because, according to Accenture, an astonishing 8-10% of a developed nation’s GDP spend is on logistics.
Faced with these enormous challenges, some first mover businesses are starting to embrace digital transformation and are moving their logistics processes and systems to the cloud for a more flexible and agile approach to logistics management that will also reduce costs.
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AI and IoT driving change
Using a cloud-based model, it is far easier to take advantage of emerging trends such as AI/machine learning and IoT, which offer the prospect of smarter, more efficient logistics operations.
Take anticipatory logistics for example, which uses machine-learning algorithms to log previous customer activity and information, allowing suppliers to anticipate customers’ needs and move products or resources closer to their location in preparation for an order. The result is a win-win: the customer gets their order faster and is very happy with the service, while the supplier benefits from greater customer loyalty and a more streamlined process.
Another thing that has been complicated and incredibly expensive to achieve in the past concerns the ability to track the entire logistics chain in real-time. This is changing now that organisations can use cloud-based platforms to manage live tracking and alerts from IoT and mobile GPS devices. By bringing all of these data points into a single platform in real time, combining these with powerful web-based analytics capabilities, and making this information accessible via a smart web-based dashboard, organisations gain valuable insights every step of the way. Examples include: improvements in capacity planning, dynamic routing, predicting shipment delays, bottleneck alerts, and temperature tracking for fresh foodstuffs.
Another branch of AI – cognitive computing – is also making in roads in logistics operations. Using a cognitive approach – where the logistics system provides valuable information extracted from a mix of structured/unstructured data, and the employee then decides on the best course of action – can lead to even more informed decision making and more optimal outcomes.
The Ascent of Autonomous Agents
Of course a discussion on IoT and logistics would not be complete without a mention of emerging autonomous agents such as drones and self-driving trucks.
Self-driving trucks are due to be trialled in the UK from 2018 as part of a £8.1million project to reduce business costs (and also cut pollution), while drone delivery services are currently being tested by a number of large retailers and logistics companies in a bid to solve the problem of “last mile” deliveries. Clearly this will usher in the need for a raft of new processes, as well as challenges around how best to manage the ever-growing volumes of IoT data in such a rapidly changing environment. For any organisation considering autonomous agents, a Software as a Service (SaaS) logistics platform removes the burden of needing to future-proof technology investments.
Increasing Your Delivery Happiness Score
Underpinning all of these technological advances is the focus on delivering highly personalised experiences that put customers at the heart of the process. A recent study found that over 86% of customers rate the quality of delivery they receive as part of their online shopping experience, making it crucial that companies offer the best customer experience possible. This means turning on a dime to respond faster to customer orders and personalising the experience to best meet each customer’s specific needs.
One organisation that has already overhauled its business operations to facilitate more informed, faster decision-making is DHL eCommerce. A division of the world’s leading logistics company, Deutsche Post DHL Group (DPDHL), it provides e-commerce related logistics such as fulfilment, cross-border delivery and domestic delivery in various markets.
DHL eCommerce is committed to staying one step ahead of the competition by offering the best-in-class and most customer-centric technology solutions. Finding a technology platform that could help orchestrate first and last mile delivery and give more granular insight into these crucial stages was imperative for the firm.
Charles Brewer, CEO DHL eCommerce explains: “With e-commerce growing at such a rapid pace, we see a fantastic opportunity for high-quality solutions that will offer a great customer experience and more choice, convenience and control for online shoppers. We set about finding a platform that would be scalable, future-oriented and flexible to allow us to optimise our delivery operational efficiency and FarEye fits the bill.”
FarEye’s SaaS platform runs on a Business Process Management engine and provides DHL eCommerce with smart analytics and a real-time view of the logistics trail, meaning that it can keep the customer informed at every step, and make parcel shops more efficient.
DHL eCommerce is also taking advantage of tools including efficient route optimisation, live tracking, and predictive delay calculation, while the mobile application ensures delivery agents can pick and deliver seamlessly with real-time updates.
According to Brewer, this means that: “We can deliver ‘delight’ by having complete visibility of the logistics movement and keeping customer informed at every step, in real time”.
In summary, we are living in an exciting era where the pace of change in logistics across all industries is enormous. The requirement to rethink and redesign logistics processes has never been stronger. With a cloud-based approach, organisations can deliver on the promise of smarter logistics, boost their bottom line, and deliver an outstanding service to customers too.