Logistics 4.0: Drivers, Challenges and Opportunities
Without Profound Digitization of Logistics, Industry 4.0 Would Only Be a Buzzword
Just-In-Time Manufacturing and Delivery
Long gone are the days when the sale of goods took place primarily from companies' warehouses. On the one hand, manufacturing and retail companies have cut back on their storage capacities to reduce warehousing costs. On the other hand, customers increasingly expect suppliers to adapt their products to their wishes and needs. But that's not all: developments are moving more and more toward 3D printing or additive manufacturing. This means that the topics of batch size one and shorter supply routes are becoming increasingly important. And these trends are continuing unabated. On-demand production should nevertheless take place on time. This can only be achieved by digitizing logistics along the entire supply chain, particularly in the case of complex products with many suppliers.
Cost Competition in the International Arena
The next offer is often just a mouse click away in the digital age, even in B2B. Thanks to global networking, it is easier than ever to compare offers in terms of quality, price, and execution. The particular difficulty faced by European and mainly German companies is that they are competing with low-wage countries. Of course, this also applies to the logistics industry. Not to be forgotten: the rapid and ongoing development in e-commerce is leading to sharply rising parcel volumes with ever shorter delivery cycles at the same time.
Tracking without Blind Spot
In the end customer business, it is now standard for consumers to find out where their ordered goods currently are. Companies, too, want and need to see the current status of their orders at any time. However, it is not just a matter of knowing where the shipping company is at the moment, for example, with ordered materials or the end products to be delivered. Instead, manufacturing companies need information about the production progress at their subcontractors - and that in real-time and with little effort on both sides!
Worldwide Networking - Decentralized and Almost Down to the Last Corner
When it comes to international economic relations, there are only a few blank spots left on the map. This not only makes for very complex logistical relationships in some cases, but also for sometimes quite long transport routes that nevertheless have to be overcome as quickly as possible. In addition, the infrastructure is by no means as well developed everywhere as in the industrialized countries, for example.
The issue of skilled workers also plays a crucial role in logistics. It is becoming increasingly difficult to find young talent - a trend that is very likely to continue. In addition, solutions are needed to ensure communication even with people - such as warehouse employees or drivers - who do not necessarily speak German or English.
The Ecological Footprint
Like all sectors of the economy, the logistics industry is also required to implement suitable measures for environmental and climate protection. This is why companies are constantly optimizing their transport logistics, and not just for cost reasons - to avoid empty runs, find the best possible routes, and sensibly link different means of transport.
The term Logistics 4.0 refers not only to the effects of technological developments in the area of Industry 4.0 on logistics but also specifically to the contribution of logistics to the design and support of Industry 4.0. The latter is primarily about the networking of processes and objects and the links in a supply chain - whether suppliers, manufacturers, wholesalers, and retailers, logistics service providers, or customers.
Information and communication technologies (ICT) are used to interlink supply chain members. These ensure greater efficiency through automation, process acceleration, and error reduction, among other things, as well as greater effectiveness through more flexible and individualized processes, products, and services. In this way, value chains can be optimized and integrated into value-creating networks.
When numerous logistics processes are automated by means of AI-based control, employees - whether in the warehouse, transportation, scheduling or purchasing - are relieved of these activities and can instead concentrate on more complex, value-adding tasks. In addition, intuitive user interfaces not only eliminate the need for intensive user training, but also help overcome language barriers.
Mobile maintenance and service teams can manage inventory in the cloud in real time while on the road. The trunk is effectively a mobile warehouse. When the spare part is removed from the car, the employee books out the component via his app. If the stock level falls below a predefined limit, material planning automatically orders more.
Contract service providers are a mainstay in mechanical and plant engineering. Companies can respond much more flexibly to volatile markets and seasonal peculiarities by outsourcing even complex production units. This shortens lead times and reduces costs. However, it is crucial that the machine builder retains control and knows, for example, whether the partner is producing on schedule.
Even in unplanned changes, for example, if the subcontractor requires additional input material at short notice, the manufacturer is dependent on the subcontractor's information. However, it would be idle to query the processing status of all subcontractors constantly. Not to be forgotten: Especially in mechanical and plant engineering, production managers, shift supervisors, etc., travel a lot within the company and are sometimes difficult to reach.
The solution is a prime example of the digitization of logistics: There is a permanent, automated exchange of information and data between the partners, with the data also ending up in the right place. If a delivery is delayed, for example, the logistics department needs to know to reschedule the shipping company. If, instead, the material has to be reordered, the purchasing department has to take action.
The development continues. According to a Fraunhofer study, modern technologies such as voice and gesture control have already found their way into logistics. In order picking, for example, pick-by-voice or pick-by-light systems have proven their worth. Data glasses in combination with virtual and augmented reality are used to sort components, optimally stow sea freight containers, or load and unload trucks.
A recent British study concludes that - boosted by the further growth of the e-commerce industry and the need to make the last mile more cost-effective - autonomous vehicles will take over delivery in the foreseeable future. This may involve both cargo drones and technology for autonomous ground delivery.