How technology in logistics grew throughout 2016 is not limited to the technology that delivers products or enables better, faster picking processes. Over the last year, huge strides were made in machine-to-machine connectivity, as foreseen by our predictions, ranging from the greater use of automated identification and data capture (AIDC) and stronger resolve for more omnichannel logistics solutions.
Many of these advancements were expected to bring substantial investment into supply chains, and they did just that. But, you need to understand where the investments focused, how they relate to improving supply chains and why they are essential to omnichannel logistics solutions.
How Machines “Talk” Expanded.
Machines “talking” to one another is not a new concept. But, the amount of investment being poured into machine-to-machine connectivity is surpassing expectations. By some accounts, overall spending on connected logistics solutions globally exceeded $7 billion, and more than $13 billion will be pumped into this supply chain powerhouse by 2020, explains Andrew Meola of Business Insider. The real scope of investment into connected devices can be seen in the following graph:
This increasing level of connectivity was driven by three critical types of sensors and data processing, which include the following:
- RFID sensors found a place among large shipments. Radio frequency identification (RFID) tags were expected to become commonplace among individual shipments in 2016. However, their use felt some restraint, and most companies used them to track large-scale shipments, such as cargo containers, reports Claire Swedbery of the RFID Journal. Additionally, these sensors were used to help monitor temperature changes and ensure the best conditions possible for shipment.
- AIDC communications reduced workload, making tracking items and using analytics easier than ever. Part of the problem with the large-scale implementation of machine-to-machine connected devices was data capture. In other words, someone had to scan and enter information physically. However, AIDC tools are making analytics in the supply chain an affordable reality. More importantly, they have eliminated the chance for error from manual entry systems, explains Nicole Pontius of Business.com, so the accuracy of data is helping to produce superior results and recommendations.
- IoT-based tech spending saw a huge boost, becoming synonymous with improvements. IoT-enabled devices grew even more in 2016 than anyone expected. However, these devices are not only monitoring and reporting on events; they are responding to events in real time. When applied to the supply chain, this is the Industrial Internet of Things (IIoT). It is eliminating bottlenecks in the supply chain, ensuring maintenance is kept up-to-date and verifying the operability of all equipment, reports Jenipher Wang, Ph.D. of the WIOMAX SmartIoT Blog.
Bluetooth Technologies Got a Real Seat at the Supply Chain Dinner Table.
Bluetooth technologies offered to solve a major concern inherent in the use of connected devices, internet bandwidth, and usage. Bluetooth technologies do not require an active internet connection to function, so their feasibility seemed ideal when shipments are traversing seas or remote areas. There would still need to be some data capture and processing, which is why this trend fell into alignment with the other main technology trends in logistics. Essentially, information capture did not have to rely on the immediate availability of the internet, but it still benefited from it when available.
GPS is great, but Bluetooth enables users to access practically any information necessary, provided the right sensors are in place. Per Link Labs, Bluetooth-enabled devices can take advantage of both WiFi signals and GPS-based information to produce a more accurate report on a shipment. However, the widespread use of Bluetooth still relies on some hub, such as central communications network.
Now, Bluetooth might seem like the distant cousin to the IIoT, but it has the potential to change how companies operate. Bluetooth devices are inherently low energy, meaning they would require less charging time, which reduces overhead for supply chain operations. Meanwhile, communication distances of more than 200 feet are ideal for increasing visibility in warehouse operations. This has led more companies to adopt Bluetooth as they look for cost-effective, IoT-enabled solutions. It may not be the best when away from the “hub,” reports Go Pigeon, but Bluetooth has apparently found its spot at the supply chain dinner table.
Customers Pushed For More OmniChannel Logistics Solutions, and They Got It.
The past few years have seen a steady push for more omnichannel logistics solutions, such as online or in-store returns, purchasing or shipping. Powered by cloud-based technologies and advanced automated protocol integration (API), consumers’ demand for omnichannel logistics solutions was stronger in 2016 than ever before. More interestingly, companies saw this demand and answered the call.
Walmart launched a pick-up service, allowing customers to shop online and simply drive up to get their orders. K-Mart launched an innovative app to give customers more options, and business-to-business service got a bigger omnichannel share with Amazon Business. Considering Amazon’s promise of next-day delivery, the opportunities through omnichannel logistics solutions are growing stronger. Now, consumers can return products to Amazon stores, and recently, Amazon launched a no-employee grocery store, Amazon Go, in Seattle.
The power of shopping anywhere, anytime and without the hassle of cashiers and registers was proven in 2016, and 2017 will likely be a year of greater innovation. Ultimately, eCommerce best practices, such as striving for two-day shipping, are no longer relevant. For supply chains to stay competitive, logistics operations must be willing to shoot for nothing less than perfection with delivery times that are only rivaled by the speed of an internet connection. Take a look at how Business Insider reported the standard beliefs in “fast shipping.”
What Does It Mean For 2017?
The demand on logistics for better, stronger and faster operations will continue to grow in 2017. If 2016’s advancements are any indication, this year could be a year for the record books. Robotics are surging, IIoT-enabled devices and machine-to-machine connectivity are ready to take on the brunt of the work, but the next wave of innovation could come from anywhere.
It could be a new way of looking at logistics operations entirely, placing trust in a cloud-based system that is built on software-as-a-service (SaaS) that could replace the standard TMS model. Alternatively, 2017 could foreshadow a transition of power between logistics companies and the autonomous controls being developed. Only time will tell, but technology will continue to march forward and bring society into a new realization of what it means to get what you want when you want it and at the right cost.