Digital Transformation in Transportation and Logistics

Digitizing supply chains creates massive volumes of data with greater diversity and velocity. Big Data technology advances the utility of this information to enable advanced analytics applications for transportation logistics and supply chain management that include:

• Inventory management
• Quality control
• Warehouse operations
• Real-time deployment
• Predictive strategies

Transportation and logistics management is becoming increasingly complex, and most legacy systems fail to keep up with the pace of innovation. Advanced analytics that leverage the power of data require tools, algorithms, and processing systems to provide powerful data that maximizes supply chain value.

Internet of Things (IoT) technology connects objects on the supply chain with sensors, software, and other connected devices. Data is exchanged with networks and systems over the internet to increase visibility and connectivity. Besides leveraging the benefits of "touchless" supply chain management, IoT reduces labor costs, increases inventory tracking efficiency, and allows businesses to monitor equipment efficiently.

5G boosts mobile networks with multi-Gbps peak rates, ultra-low latency, and massive data capacity. Combined with IoT technology, 5G transforms the supply chain with increased connectivity that tracks inventory at every stage of the logistics process.

Advanced software that applies to the entire supply chain enables businesses to easily modify orders, automate shipping procedures, and communicate across various communication channels. Companies that incorporate the latest advancements in software technology and Application Programming Interfaces (APIs) have the power to:

• Unlock data from legacy systems
• Increase speed between supply chain points
• Reduce security breach risks 
• Improve agility
• Enhance customer experiences
• Accelerate delivery

Traditional software falls short of maximizing the capacity potential of modern supply chains. Advanced systems integrated with APIs provide the critical link required to unlock the power of emerging software technology and increase collective value among all partners.

Cloud-based computing elevates transportation and logistics by connecting activities and processes between multiple devices, software users, and systems. By providing the infrastructure, platform, and software solutions for the supply chain network, cloud-based technology leads to financial and operational benefits that allow businesses to:

• Track materials and products with greater efficiency
• Obtain real-time updates on the status of customer orders
• Increase data storage space and seamlessly scale operations
• Integrate software systems
• Improve security

APIs are fundamental to cloud services by maximizing the features and value of software and connected systems. Along with extending features, APIs increase speed, improve security, and enhance communication on every supply chain component.

“Smart logistics” tools and technology services such as automated warehousing, cargo tracking, and remote fleet management can increase speed between all points on the supply chain. Cloud-based GPS and Bluetooth Low Energy (BLE) asset tracking provide transportation companies with instant updates on geography while cargo is in transit. 

Real-time monitoring is also used to gauge transportation performance and optimize delivery routes by tracking inefficiencies. In addition, internet-connected sensors can detect supply chain disruptions and quality issues, and address these problems in real-time with minimal human intervention.

Traditional forecasting methods based themselves on historical levels, which may be poor indicators of future demand. Advanced technologies that address this problem include embedded sensors that monitor, collect and report information to produce critical insights that improve forecasting ability. 

AI further enhances demand forecasting (and how that will impact the logistics chain) by providing predictive analytics through machine learning that accounts for additional variables. When used together, these emerging technologies can analyze patterns to predict demand with greater accuracy and respond to changes with increased agility.

Communication flows between parts of the supply chain are essential to optimal business performance. Referred to as the “digital thread”, continuous information sharing within a communication framework enables data to flow upstream and downstream between businesses and consumers. By creating a constant feedback loop, workflows are integrated and data communication is accelerated. 

Benefits of accelerated communication on the supply chain include improved customer experiences and increased responsiveness of the retail product chain from design to manufacturing challenges to product volume. The enhanced communication network between suppliers, businesses, and consumers acts as an integrated value chain where all parties collaborate to achieve efficiencies and lower costs.

Today’s customers expect prompt delivery, complete accuracy, and top quality — demands that are increasing in the digital age. Businesses can meet these needs by moving to centralized distribution models that offer real-time inventory management. By moving away from a traditional warehouse model, companies can be more responsive to demand and less dependent on inventory levels. Technological evolution provides the tools needed to meet those requirements, improve the customer experience, and gain a competitive advantage.

Increased connectivity between networks creates additional security vulnerabilities and substantially increases supply chain risks. Attackers frequently exploit third-party vulnerabilities to steal data and break supply chain operations. Besides lost business, security breaches result in irreparable reputational damage that can cost millions. Modern supply chain technology has evolved to address security risks, prevent exposures, and minimize damage resulting from cyberattacks.