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May 30, 2018

A guest article by Dr. Tanya Goldhaber, Associate at Founders Intelligence

How consumer demands and digital technologies are overhauling the world of logistics

Dr. Tanya Goldhaber, Associate at Founders Intelligence

Dr. Tanya Goldhaber, Associate at Founders Intelligence.

When people think about exciting new technologies that are changing the world, logistics isn’t the first thing that comes to mind. However, this field is finally getting its long-overdue tech makeover as both a result of its increasing importance to customer experience and new technological developments that are finally giving transparency to an industry that’s long been dominated by paper and spreadsheets.

Why now is the time for the logistics revolution

An important driver of innovation in logistics technology is changing consumer demand. In the past, it made sense to move products in bulk from a warehouse to retail outlets. As more consumers have started shopping online, however, it now makes increasing sense for manufacturers to ship products directly to them. Companies like Amazon are also redefining customer expectations with next-day or even same-day delivery, and so we see companies investing more in their logistics processes to keep up.

Digitalization

New technologies allow companies to modernize their logistics processes and to keep up with the ongoing global digitalization process.

Many of the core processes in logistics have been slow to modernize – and are therefore open to disruption. This industry, rife with middlemen, manual processes, and data silos, is now finding that technology companies are making many of these old processes and systems obsolete, and simultaneously delivering significant cost savings and efficiency gains.

At Founders Intelligence, we see six key technology areas that are driving the current trends in logistics:

  • IoT: Connected sensors on trucks, pallets, and in warehouses allow goods to be continuously monitored in transit.
  • Robotics: Many warehouse processes can be automated, and “dark warehouses” are the future, where robots will do the vast majority of the work.
  • Artificial Intelligence (AI) & Predictive Analytics: New ways of processing and generating insights from the wealth of data now available mean we can reach new levels of process optimization.
  • Autonomous Vehicles: Trucks that can drive themselves can address high cost and shortage of labor and enable efficiency gains.
  • Blockchain: This innovative way of holding and sharing data enables better transparency and trust among providers.
  • Human Augmentation: Augmented Reality and exoskeletons will allow people working in logistics to be much more efficient – and safer – than they are today.
Augmented reality glasses

Augmented reality glasses will allow warehouse workers to receive information like where to go, what packages to pick up, and where to put them overlayed directly on their field of vision. Trials so far have seen productivity increases of almost 50%. Photo from Lehrstuhl fml of TU München under CC license.

Tapping the potential of digital logistics

Technologies like IoT, AI, Predictive Analytics, and Blockchain offer the most immediate potential for large corporations like Henkel, who often don’t operate their own fleets or warehouses.

Examples of possible benefits include:

  • IoT allowing manufacturers to know the position and condition of shipments, allowing reductions in theft or the ability to address temperature fluctuation in real time.
  • AI & Predictive Analytics enabling companies to use their data to better predict demand or optimize supplier arrangements.
  • Blockchain offering manufacturers better visibility of their end-to-end supply chain and facilitating better communication with logistics suppliers.

There are hundreds of innovative companies that can help companies take advantage of these technologies quickly. Lots of start-ups are already partnering with large corporates to achieve logistics transformation. With many exciting possibilities already available – and competition heating up – there’s never been a better time for manufacturers to consider innovation in the space.

About Founders Intelligence

Founders Intelligence helps some of the world’s leading companies to capture growth by taking advantage of new business models, developing a culture of innovation, and creating partnership opportunities. Born out of Founders Forum, a global community of the world’s most successful tech entrepreneurs, we are at the forefront of digital and innovation thinking. Our cross-industry approach enables us to draw parallels and access opportunities early, so our clients like Henkel, Shell, Diageo and Visa can consistently stay ahead of the curve.