Needless to say, the term Industrial 4.0 has become quite ubiquitous. In the same way Logistics 4.0 has also picked up steam, speeding up and improving the logistics process.Needless to say, the term Industrial 4.0 has become quite ubiquitous. In the same way Logistics 4.0 has also picked up steam, speeding up and improving the logistics process.
The Industrial Internet of Things, or IIoT, helps manufacturers boost productivity and efficiency. Yet to effectively deliver the manufactured goods from the manufacturing facility to the customer with fewer errors, smart logistics is needed.
Indeed, the demand for smart logistics is getting higher, as a report by Allied Market Research suggested the global connected logistics market was valued at US$16.8 billion in 2016 and is projected to reach $27.7 billion by 2023, growing at a compound annual growth rate of 7.60 percent from 2017 to 2023.
Logistics 4.0 and its components
To make logistics smart, more and more stakeholders are adopting Logistics 4.0, which, like Industry 4.0, leverages the power of IoT and data. “Logistics 4.0 operates under these same principles, but with a different set of component parts. Specifically, it makes use of ‘smart’ containers, vehicles, pallets and transport systems in order to create a fully networked supply stream that offers supply chain managers, shippers, freight forwarders and others the necessary visibility to route transport and perform other logistics tasks in an optimal way,” said a recent blogpost by flexis.
According to the post, an immediate benefit of this is it provides visibility to the stakeholders. “For instance, a supply chain manager with access to data from an IoT-enabled warehouse might be able to detect, based on heat and light conditions, that a particular product or group of products was likely to become damaged. Even if it were too late to prevent the damage, merely knowing about the problem would enable the warehouse to send out an order to replenish the damaged (and presumably discarded) stock,” it said. “In an especially sophisticated system, the warehouse sensors could send out an alert to the supplier that a restock order was necessary without requiring any human intervention at all.”
While Logistics 4.0 does have certain advantages, there are still key challenges which, according to the post, are threefold: reducing Shadow IT and information silos, breaking free from past-oriented planning and ditching the spreadsheet.
“Of these hurdles, perhaps the most important is ‘ditching the spreadsheet,’” the post said. “Not only do planners wall themselves off and actually contribute to information silos by producing plans in Excel, they also counteract the mindset of open, transparent workflows that is crucial to success in the modern supply chain. Indeed, this type of workflow is emblematic of the organizational structures that result in things like Shadow IT and siloized decision making processes, both of which make a forward-facing and future-oriented supply chain virtually impossible. Under these conditions, businesses often wind up caught in a cycle of planning based on past events and then scrambling to adjust to unforeseen breakdowns.”
Despite these challenges, the benefits of Logistics 4.0 will eventually outweigh the initial concerns for it. “In the short term, boosted end-to-end (E2E) visibility and a more holistic view of the supply chain will almost certainly be significant value-added propositions for companies that are able to achieve them,” the post said. “Looking towards the future, Logistics 4.0 has the potential to pave the way for a new, more advanced conception of the value stream that involves autonomous vehicles, also known as driverless cars, automated warehouse operations, and perhaps even the elimination of warehouses altogether in favor of predictive deliveries with full, zero-lead time integration into smart production processes.”