Making the case for next-gen logistics management
January 4, 2021 / Unisys Corporation
Short on time? Read the key takeaways:
- Many logistic companies are accelerating next-generation business processes to survive disruptions and reduce costs.
- To achieve these goals, logistics leaders must move beyond the Internet of Things and embrace change at an infrastructural level.
- Logistics companies have traditionally underinvested in IT and operational technology, leaving holes in security and limiting their ability to grow and transform.
- Introducing analytics, automation and augmented intelligence gives your company the tools to grow.
The transportation and logistics landscape is no stranger to disruptions. An increasingly robust commitment to analytics, automation and AI could have smoothed supply chain turbulence. Still, unfortunately, some supply chains have been slow to fully embrace end-to-end planning and implementation.
The past few years have revealed glaring inefficiencies in how many logistic companies operate, emphasizing the need to accelerate business processes and reduce costs. To achieve these goals, logistics leaders must move beyond the Internet of Things (IoT) and embrace change at an infrastructural level.
Transportation and logistics: The backbone of the global economy
The ability of logistics companies to facilitate quick, cost-effective delivery of products from point to point is crucial, not just from a reputational standpoint but for profitability. Bottlenecks in the supply chain can stifle revenues and destroy consumer trust.
The growing adoption of transportation management system (TMS) applications and other advanced transportation technologies can offer superior efficiency and cost savings. However, they are not stand-alone solutions. Unless the correct infrastructure and IT system management (ITSM) standards are implemented, attempts to raise the bar across the industry will be inconsistent.
Advanced technologies can transform transportation and logistics
Over the past decade, major advances in augmented intelligence, analytics and automation have continuously transformed logistics companies' operations. As more advanced TMS technologies supplant legacy systems and manual processes, companies increasingly focus on ensuring their digital transformation delivers clear benefits.
According to Gartner, supply chain leaders already perceive technology as a competitive advantage with long-term value. Still, a staggering 80% of organizations are slow to adopt new supply chain applications and technologies. A report from the University of Sydney Business School reveals that while retailers are convinced of the benefits of data-driven supply chains, barriers to deployment have slowed adoption.
Obstacles include:
- Reluctance to share key data
- Challenges associated with data security
- Unfamiliarity with or distrust of new technology
- Data science-related skills gaps within the retail company
- Organizational issues
- Failure to align goals and processes with partners
According to McKinsey, logistics companies implementing analytics to create denser routes, automation to speed warehouse-to-truck operations and augmented intelligence to predict everything from distributor demand to fleet maintenance can successfully transform. Organizations that cannot build cohesive end-to-end solutions will fail.
Modern ITMS solutions underpin companies’ ability to build competitive advantages, differentiate themselves from competitors and stay ahead of market disruptions and trends. Internal goals focus on generating and utilizing real-time data garnered by deep visibility into the supply chain. External goals commit to delivering products and services to the customer faster and at greater convenience than the competition.
Increase visibility over transported goods
Integrate information technology (IT), operational technology (OT) and data analytics to monitor transportation vehicles in real-time. This can be accomplished with a combination of advanced TSM applications, geo-tracking and IoT-connected devices that relay critical information, leading to more accurate delivery estimates. The addition of augmented intelligence allows traffic delays to be avoided, inclement weather to be factored into travel time, and the most efficient route identified for constant course correction.
Reduce the impact of human error
Automation, augmented intelligence and data analytics can all be leveraged for comprehensive risk management. Replacing manual processes with automated ones can prevent human error (the cause of nearly a quarter of all downtime in manufacturing), helping to eliminate costly transportation delays, wasted resources and undelivered products.
Integrating artificial intelligence (AI) and machine learning (ML) into your operations allows manual or paper-based tasks to be minimized, reducing errors and freeing staff for more complex, higher revenue-generating processes. Robotic process automation (RPA) can facilitate logistics customer invoicing and transport planning needs.
Improve cost control and operational agility
By combining OT and data analytics, your organization can receive early warnings about vehicle and equipment failures. Implementing IoT-connected sensors can enable predictive maintenance, delivering impressive cost savings. According to research from Deloitte, predictive maintenance can reduce maintenance planning time by 20-50%, increase equipment availability and uptime by 10-20%, and drop costs of overall maintenance by 5-10%.
Developing and deploying augmented intelligence programs can help your organization plan new transportation strategies and travel routes for greater cost efficiency. Benefits include reducing freight costs, transit times, fuel usage and other overhead expenses, with the side benefits of improving the agility of key operations and enhancing customer satisfaction.
PricewaterhouseCoopers (PwC) Australia cites that organizations committed to developing and deploying digital capabilities can transform linear supply chains into ecosystems.5 These “digital champions” can achieve annual savings of 6.8% in supply chain costs while gaining a 7.7% revenue increase.
Enhance supply chain cybersecurity
According to Australia’s Cyber Security Strategy 2020, the Australian Government is funding a $1.35 billion Cyber Enhanced Situational Awareness and Response (CESAR) package. The report identifies transport as one of the top 14 industries most affected by cybercrime.
IoT connectivity and other technologies may offer more efficient logistics functionality and introduce new security vulnerabilities. A single data breach can cause costly unplanned downtime and loss of revenue as well as reputational damage and reduced public trust. AI and data analytics can enhance cybersecurity, enabling high-level anomaly detection and threat identification applications to provide a protective shield for key business systems and processes.
Support logistic resiliency
In a recent Gartner survey, only one out of five respondents claimed they already have a highly resilient logistics network with good visibility. An overwhelming majority don’t possess the agility to react to sudden changes in the industry and can’t quickly shift sourcing, manufacturing and distribution activities to accommodate shifts. However, more than half say increasing resiliency is a priority and expect to become highly resilient in the next 24 to 36 months.
Step into the future of transportation and logistics with Unisys
Logistics companies have traditionally underinvested in IT and OT, leaving holes in security and limiting their ability to grow and transform. Introducing analytics, automation and augmented intelligence gives your company the tools you need to succeed. When you partner with Unisys, you also gain the systems you need to pivot your digital transformation efforts to meet ever-evolving customer and workplace needs while improving resiliency.
