How Technology is Changing the Future of Transportation and Logistics
As supply chains expand their global reach, transportation and logistics companies continuously seek new ways to increase flexibility, sustainability, and transparency. Emerging technology is critical to addressing those challenges and can lead to operational and financial benefits for leading supply chain businesses.
From initial product development to “last mile” delivery options, emerging technologies are making supply chains more efficient, productive, and cost-effective. Some benefits of technological innovation specific to the transportation and logistics industry include:
Robotics, sensors, tracking software, and automation are some of the advancements used by logistics and supply chain companies to create “touchless” supply chain infrastructure. Artificial intelligence (AI), machine learning (ML) algorithms, and advanced computer-based analytics and software help managers optimize processes and automate maintenance, improving efficiency across all segments.
Supply chain visibility improves with full product tracking from the manufacturer to the final delivery destination. Cloud-based communication systems, high-speed internet, advanced software, sensors, and other logistics technology services make end-to-end visibility possible for all stakeholders.
Technology that boosts productivity ultimately reduces costs while improving services. Sensor devices, tracking software, and barcoding technology reduce the need for human intervention and accentuate the role of information technology throughout the supply chain. In addition, software using AI and ML can optimize delivery routes, lower shipping times, and help logistics managers make decisions that lead to effective cost-reduction strategies.
Faster Delivery Times
Full automation, partial automation, robotics, and AI-enhanced tools that optimize routing can speed up transportation and improve service levels between segments. Sensors, tracking tools, and related logistics technology services monitor vehicles and traffic to provide faster routing options. Predictive analytics produced by AI and ML-powered software help mitigate risks, automate maintenance and increase the lifespan of vehicles and equipment.
Digital transformation technologies promise to catalyze systemic changes that reduce CO2 — a stated goal of the World Economic Forum. As supply chains grow in size and complexity, transport decarbonization will play a critical role in reducing greenhouse gas emissions. AI-enhanced tools optimize delivery routes and shorten travel distances, helping companies reduce CO2 and increase their Environmental, Social, and Governance (ESG) ranking.
Technology Benefits All Supply Chain Segments
The supply chain is an interdependent network that benefits from gains made by all partners. Some advantages of supply chain and logistics technology for other segments include:
Superior Product Development
Supply chains ultimately depend on customer satisfaction, making product development and quality control a top priority. Technology can be applied to each stage of the product development life cycle to improve quality, performance, production, and marketing. Other benefits for this critical segment of the supply chain include:
- Increased accuracy of feasibility studies
- Enhanced product design with computer modeling applications
- Boosted profitability with analytics applications that optimize price points
- Upgraded product strategies with marketing software that accurately measures customer satisfaction
The ultimate goal of technological innovation within this segment is to augment the human capacity to create high-quality products that perform better and last longer. Besides giving producers a competitive advantage, superior products benefit all transportation and logistics partners through increased consumer demand.
Precision Marketing Strategies
Effective marketing strategies thrive on data and open information systems. Applications that eliminate data silos enhance communications, amplify marketing efforts, and enable managers to make effective decisions. From product development to final delivery, supply chain data enables businesses to create new products, evolve existing offerings, make system improvements, and craft precision marketing strategies.
Improved Customer Service
Consumers expect top-quality products, fast delivery, and prompt after-sales service at increasingly higher standards from order placement to final delivery. Electronic commerce software and systems promise increased speeds, easy payment processing, and multiple communication venues. Improved logistics operations upgrade delivery services for customers while reducing costs and complexity for businesses.
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Supply Chain Technologies That Benefit Transportation and Logistics
Emerging technologies like AI, sensor devices, and tracking software improve operations between multiple supply chain segments. Enhanced connectivity, data silo elimination, and software integration play a critical role in advancing supply chain management, particularly as partners become increasingly interdependent.
Advanced Analytics Applications
Data is the fuel that powers the new economy. As more government agencies, businesses, and individuals come online, massive amounts of data are created, collected, and stored in data warehouses. Used to its full potential, this data helps managers optimize processes and make decisions that improve efficiency throughout the supply chain.
Modern software leveraging advanced algorithms and high processing power has emerged to handle the high speed, increased volume, and diversity of supply chain data. Some applications for the logistics and transportation industry include quality control, temperature monitoring, predictive maintenance, and delivery times to supply chain partners and consumers.
Machine Learning, Artificial Intelligence, and Augmented Intelligence
Logistics and technology companies use ML, AI, and IA to build “smart” machines capable of executing functions that typically require human intelligence. Supply chain management professionals use these tools to:
- Optimize inventory management
- Automate shipping transactions
- Improve delivery routing
- Enhance temperature, humidity, and pressure monitoring
- Automate decision-making for multiple management processes
- Aid forecasting and decision-making
While AI and ML research has produced innovative tools that catalyzed innovation, all fail to replicate the human capacity to create and innovate. Augmented Intelligence (Intelligence Amplification or IA) combines human ingenuity and experience with the algorithmic power of machines to enhance (instead of replacing) human intelligence. When used to its full potential, IA helps companies identify and mitigate risks, monitor supplier performance, and efficiently manage resources.
Internet of Things (IoT)
IoT technology embeds sensors, software, and other tracking technologies into objects to connect and exchange data with multiple transport management systems. With numerous uses spanning almost every industry, IoT technology creates seamless interaction between devices with minimal human intervention.
IoT technology has numerous applications specific to transportation and logistics companies that include:
- End-to-end product tracking
- Vehicle monitoring
- Dynamic route planning
- Quality control
- Temperature, pressure, and humidity monitoring
As supply chains grow in size and data complexity, IoT enables the growth of “touchless” systems that streamline and simplify processes. Besides increasing efficiency, IoT technology can lower costs, boost productivity, and reduce delivery times.
High-speed 5G networks amplify the potential of IoT technology with multi-Gbps peak rates, high data capacity, and ultra-low latency. With the ability to connect users, machines, and objects in a single information space, 5G enables real-time monitoring of all items on the supply chain.
Robotics and Automation Tools
Robotics and automation technology improve warehouse productivity by replacing labor-intensive activities typically performed by humans. Advanced systems used by leading companies manage hundreds of orders per hour in addition to identifying and manipulating objects in multiple positions and varying orientations.
While most systems are limited to smaller product sizes and lighter weights, development is underway for advanced systems that handle heavier loads. In the interim, robot arms and automated guided vehicles currently support human workers to boost productivity and reduce costs.
Computer models are widely used to create products and develop processes; however, the final results rarely replicate the digital version. In addition, current modeling technology fails to provide real-life insights into how individuals use these products and systems and what areas need improvement.
Digital twin technology solves this challenge by replicating objects and operations in the virtual environment. This allows engineers to engage with a digital model similar to its physical counterpart to refine how it works and make enhancements.
Shipping companies use digital twin technology to improve packaging and packing, and manufacturing firms use it to test new equipment and upgrade workspace layouts. In addition, logistics and transportation companies use models with real-time data to optimize routes and reduce delivery times.
Auction Delivery Systems
Logistics companies increasingly use auction systems and ride-sharing applications to match deliveries with available capacity, negotiate rates, and pay for services. In addition to arranging long-range deliveries, some businesses use crowd-sourcing applications to employ taxi drivers, seniors, and students to deliver packages in their local community.
API-Led Connectivity Solves Critical Logistics Challenges
Companies on the path to digital evolution face multiple obstacles on the route to innovation. Learn how AVIO addresses those challenges by downloading AVIO’s on-demand webinar, Challenges Facing the Transportation and Logistics Industry — And How MuleSoft Can Solve Them.
Lead Solution Engineer, MuleSoft
Vice President of Sales, AVIO Consulting
Watch Jeff and Mike as they discuss how MuleSoft integration solves critical challenges, discover new use cases, and answer audience questions.