Industry 4.0 is touted as the future, although its adoption is often seen as a challenge. Staying ahead of the game during the digital revolution is definitely not easy due to the speed of innovation being faster than adoption. This is no different for the logistics industry! So how can we prepare for the future? If Industry 4.0 is the end-game, what would a road map look like?
By Pang Mei Yee, Vice President and Head of Innovation, DHL Customer Solutions & Innovation Asia Pacific
The fourth edition of the Logistics Trend Radar launched in June this year, aims to be just this. It’s a dynamic tool that captures the development of 28 society, business, and technology trends that will have a significant impact on the logistics industry. While I can’t go through each of these trends, here are the top seven on my radar (especially in Asia)!
This key emerging trend highlights the immense logistics opportunities as more consumers adopt the ‘always-on, always-connected’ lifestyle.
Homes with smart locks are enabling new services like Amazon Key which allow at-home deliveries even if no one is there! Smart Fridges and assistants like Alexa and Siri will further automate ordering of groceries and supplies, allowing auto-replenishment models. In fact by 2020, over 50% of goods are estimated to be automatically replenished through connected homes.
Next-Generation wireless will further fuel such consumer behaviour. While IoT is not a new trend, recent breakthroughs in wireless technologies and networks are accelerating its application! Newer networks like 5G and low-power wide area networks (LPWANs) can enable seamless connectivity for indoor and outdoor applications. For example, applications like NB-IoT, Sigfox, offer low energy demands which increases battery life and wider area coverage. This will improve logistics asset monitoring (from forklifts to containers), and globally utilized tracking and condition monitoring capabilities, as device battery life plays a key role in IoT deployments.
Virtual Reality & Digital Twins
Virtual Reality & Digital Twins applications are evolving for users to design, simulate, and evaluate logistics environments. Digital Twins, i.e. the digital replicas of physical assets connected via IoT, are being used from visualizing entire virtual cities in Singapore, to creating twins of supply chain and factory processes. With the twin, operational teams gain visibility on all processes (from factory capacity and cycle times to inventory management and throughput).
Soon, supply chains will be able to detect and respond to activities in the real world which are reflected in the twin.
This can range from maintenance to monitoring package conditions, leading to faster and more agile supply chains.
Low-cost Sensor Solutions
Trends like Low-cost sensor solutions have increased in relevance with solutions from dimensioning for fast and efficient freight measurement, to smart wearables tracking worker health and safety already being implemented to improve future operations. Advanced computer vision and deep learning will further improve accuracy in operations by automating quality and inspection checks, and cycle counting of individual items.
The impact of Artificial Intelligence (AI) is yet to be seen beyond simple automation of back-office processes. Not only is AI enabling predictive operations (such as demand planning using data from online stores to predict spikes), but also powering new customer experiences. For example, customers with an Amazon Echo could ask DHL where their parcel is and receive shipment updates instantly.
Big Data Analytics
Big Data Analytics has evolved to become crucially relevant within the next 5-years. In fact, DHL’s Analytics Lab is trialing machine learning and intelligence analytics to develop predictive supply chain solutions; from planning demand patterns for inventory planning, to predicting lane risks based on temperature excursions.
The lab’s recent development includes an analytics model to help a manufacturer mine its supply chain data to better profile and forecast demand. The model uses machine learning to predict how much and when customers would order specific products. The initial results have shown to improve fulfilment rates and improve customer satisfaction levels. The use of analytics on supply chain data can also be applied to transportation of temperature sensitive goods. Poor temperature control of goods like pharmaceuticals could result in life-threatening delays. Our team has even successfully crowd-sourced analytics solutions that had the ability to predict when temperature risks would occur across shipment routes.
Smart Containerization and smart packaging solutions are also up and coming. Standard containers have transformed global shipping, but newer formats (modular, flexible, connected) will make it more efficient and agile. Even in urban logistics, standard containers will be needed to meet growing demand as parcels can be bundled for deliveries and returns within cities! As containers become the final mode of delivery (such as Swift Box or try-and-buy models), these can also be reloaded for outbound shipments or returned parcels enabling new packaging concepts (such as zero packaging). As goods volume increases, smart containers and packaging will be essential for efficient supply chain and waste management.
So, these are my top 7 trends to keep an eye out for. What’s on your radar?
For more details on all 28 key trends, explore our DHL Logistics Trend Radar 2018/19.