Over the last two decades, logistics has undergone a tremendous change in its operations as well as its functions. It has played an important role in bringing about changes in recent times, particularly through the strategy of digital transformation. From operational functions that focus on the supply lines and the delivery to customers to an independent supply chain management function, these operations are led by a CSO- Chief Supply Chain Officer in some companies. From advanced planning processes such as integrated S&OP or demand planning, operational logistics has often been outsourced to third-party LSPs in the supply chain management function. Industry 4.0 has created a huge disruption among companies which has made them rethink the way they design their supply chain. Now, without further ado, let’s learn more about Logistics 4.0, the sources of digital waste, and how to reduce it in the future.
What is Logistics 4.0 and How Does it Work?
According to MaschinenMarkt, Logistics 4.0 in the narrower sense implies the networking and integration of logistics processes within and outside of trading companies and production facilities, right up to decentralized real-time control of logistics networks.
Logistics 4.0 is not something that is planned once and then maintained in the same form for the rest of its period, instead, it is something that constantly learns new things and continuously adapts to certain requirements, and hence, it is always being implemented.
Logistics 4.0 focuses on the use of new, advanced, and innovative technologies. One particular example is forecast-based supply chain management. Certain logistical key figures can be optimized with this and other new types of technologies. They are:
- Delivery reliability
- Delivery flexibility
- Delivery quality
- Service label
- Ability to deliver
But, for companies to achieve these key figures, they need to implement new concepts for controlling, planning, monitoring, creating information and material flows in Logistics 4.0. The main objective is to identify the right technologies for optimization and also include all levels of corporate logistics in the digital transformation.
As for solutions of Logistics 4.0 are concerned, they are aimed equally at internal and external processes. For example, in order to coordinate information and material flows from raw material suppliers to customers more efficiently, complex and global value chain networks demand entirely new strategies to supply chain management.
Technologies Used in Logistics 4.0
There is a wide range of advanced logistics 4.0 technologies to choose from. New solutions are added on a consistent basis. Especially, in this dynamically challenging environment, companies are well focused and driven towards developing concrete solutions and applications for their own requirements.
Cyber-Physical Systems or CPS is one of the important components of the logistics reality of the future. It includes embedded systems such as buildings, means of transport, and other pieces of equipment. The main tasks of these systems are as follows:
- To seize physical data by means of sensors and to control physical processes by means of actuators.
- Access globally unrestricted data and services as required.
- To assess and maintain the accumulated data and to interact actively or reactively with the digital and physical world.
But in order to meet these tasks, the CPSs are interconnected via digital networks and also have numerous multimodal human-machine interfaces that deliver distinguished and apprised opportunities for control and communication.
Furthermore, in the course of Logistics 4.0, manufacturing companies or logistics service providers will jointly utilize warehouses, reversed logistics chains, as well as distribution centers. The global logistical super networks facilitate remarkably quicker and more well-organized deliveries. ‘Logistics-as-a-Service’, ‘Logistics Marketplaces’ and ‘Logistics on Demand’ are also formed with the help of the Internet of Things (IoT).
Beneifts of Logistics 4.0
When we take a look at the benefits logistics 4.0 has to offer, there are quite a few. Some of the major benefits are:
Ensuring Data Quality
This is one of the major advantages of Logistics 4.0. It helps in the collection and processing of data within networked systems. Evaluation of connections is just as important as product-specific master data. Data quality is also vital in these times of advanced digitalization.
More Scope in Negotiations
Companies have more latitude in price negotiations as they depend on an international network of contacts. Logistics 4.0 helps in improving your overall negotiating position.
Global Resource Procurement
Companies no longer need to rely on domestic resources alone, this is possible with the help of global networking. Smaller and medium-sized companies also get to gain access to raw materials and suppliers all over the globe because of global sourcing.
Opening Up New Sales Markets
Digital transformation makes it way simpler to determine new sales markets. International networks make your company’s proposal unrestricted to inquisitive parties on all continents. If you make your services and goods open to international associates at an early phase, your probability of designating yourself successfully and sustainably on the market will expand.
Digital Waste Averts Supply Chains From Leveraging the Potential of Supply Chain 4.0
In today’s supply chains, many sources of digital wastes are quite common and can be found increasing quite substantially. It is considered rather vital to comprehend and get to know about the sources of waste and also to develop solutions to prevent them from coming up in the future.
Data Capturing and Management
Available data is handled manually quite frequently and at the same time, not updated regularly. One of the examples of this is the shipping notifications in warehousing, which are received but not used to optimize the inbound process. Additional data could also be leveraged to improve processes, such as sensing supply disruptions- a warning can be sent out to make planners aware of any situation that arises, hence helping them mitigate supply disruptions at an early stage.
Physical Process Execution of Humans and Machines
Nowadays, assembly line replenishment, transport management, warehousing, etc. is frequently carried out based on just a hunch, but not actually leveraging available data. A simple example of this is improving the pick-paths in the warehouse. Warehousing operations don’t allow dynamic routing and real-time allocation of new orders.
Integrated Process Optimization
Integrated process optimization has gained a lot of attention among companies and they have started to implement an integrated planning process. But still, very often, this process is done in silos and has resulted in not all information is leveraged to achieve the best planning result attainable. Moreover, it can be repeatedly monitored that automatically determined planning or statistical forecast data is manually overwritten by planners. The organizational setup, governance, incentives, and processes are required to be aligned within and between associates in the supply chain if you are focusing to get to the advanced level of integrated process optimization.
At present, new technologies are coming into the field at full pace and companies are trying to get their hands on the latest pieces of equipment and also trying to render their clients with top-notch services such as AI services to stay one step ahead of their competitors. Welcome to the new age of Logistics 4.0 and prepare to be amazed at what it’s got in store for us in the future.