With the perpetual advancement of technology, retail logistics are undergoing rapid change. What used to be complex is now being blended with technology to create more efficient, self-orchestrated systems.
Knowing these 5 key trends will help you ensure a competitive edge as they reshape retail logistics in the coming years.
Also known as 3D printing, additive manufacturing shifts the value in manufacturing from the company that owns the inventory or equipment to the company that owns the intellectual property. Customers with 3D printing capabilities will simply download patterns and create their own parts on site.
Some industries have already adopted this paradigm. For example, the aerospace industry is using 3D printing technology to print spare parts at the point of need, rather than store and ship from a central warehouse. This not only saves money on inventory, but it keeps airplanes in the air instead of on the ground.
If you haven’t investigated 3D printing, it’s time to start. Distribution centers may become printer farms in the future rather than the warehouses of today.
Artificial Intelligence and Robotics
Warehouses have had automated picking and packing equipment for years, but advances in artificial intelligence (AI) are causing even bigger changes. Imagine a warehouse where intelligent robots pick and pack material. The robots then use AI to calculate the least cost or fastest route for delivery and arrange for pickup.
If you aren’t already using route planning or truckload planning software, you’re falling behind. If you are using multiple siloed warehouse management systems and logistics systems, it’s time to look at integrating for more efficiency.
Supply Chain Visibility and Orchestration
Most supply chain executives want more visibility into their supply chains. Visibility enables rapid fact-based decisions, minimizes inventory and improves customer service. According to an Aberdeen Research survey of 161 Chief Supply Chain Officers, 85% of them said they plan to increase supply chain visibility using a control tower approach.
With greater visibility comes greater ability to orchestrate the supply chain for efficiency, service and lower costs. Insight into a supplier’s inventory or operation status allows you to react quickly when there are changes in demand, and you can use the insight to store inventory nearer to the point of demand, saving on transportation and logistics.
It seems like every day brings news about advances in self-driving autos, but the real news is in self-driving delivery vehicles. Amazon recently filed a patent for controlling self-driving vehicles navigating on roads with lanes that switch direction at certain times of the day. Two companies teamed up recently to test a self-driving beer delivery truck that made a 120-mile trip without a driver at the wheel.
Autonomous vehicles will play an increasingly larger role in “last mile” deliveries as well as long-haul trips. While it may be too soon to invest in a new fleet of self-driving trucks, it’s important to stay abreast of the happenings in the field. When it breaks out, transportation will change quickly.
Blockchain and Smart Contracts
Most people think of blockchain as the ledger that keeps track of Bitcoins. That is the least exciting part of its capabilities. Blockchain enables “smart contracts“ that eliminate disputes over quality issues, late payments, delivery disputes and many other issues that plague logistics companies.
A smart contract, like any contract, consists of agreed upon terms and conditions for execution and delivery of products and services. When a party to the contract meets a condition, such as delivering goods, the smart contract automatically triggers the next step in the process or the associated payment. To prevent fraud, the smart contract might require an electronically signed proof of delivery, ensuring both parties are in agreement. Once the conditions are met, payment or fulfillment is automatic.
The financial services industry has embraced blockchain and smart contracts for currency trades and fund reconciliation. Major companies such as HP, IBM and GE are investing in the technology, which is expected to have a major impact on almost every business.
While your customers won’t be asking for smart contracts right away, it won’t be long before they do. This is another technology to stay abreast of because it will change the way you manage retail logistics very quickly once it’s ready.
These are just a few of the trends and technologies that will change the future of retail logistics. Some are here now; some are a year or more away. In either case, you should be tuned in to these changes that will have implications affecting your business and operations.
Brian Alexander is Executive Vice President of Unyson