Yesterday, we started our series on the effects of emerging technologies on 3rd party logistics providers by speaking about the future of logistics technology and if 3rd party logistics providers are prepared. In today’s post, we expand upon this idea to focus on how those technologies will impact the service offerings of 3PLs.
Technology has always been the driving force behind logistics and even more so after deregulation of the transportation industry as 3rd party logistics providers offered technology solutions to customers. In the past centuries, people looked for ways to move goods faster, in greater bulk and more economically. The problems were solved primarily by the invention of the railway, automobiles (including trucks), modern ships and airplanes. The invention of the computer, the Internet, and related technologies revolutionized the logistic industry with such technologies as web-based programs like transportation management systems. Now the industry is on the brink of another revolution.
Today’s emerging technologies are more concerned with speed, accuracy, security and seamless delivery. These technologies include 3D printing, drone, the internet of things (IoT), driverless vehicle and augmented reality. Here is a brief discussion of how each of these technologies will change the way 3rd party logistics providers work in the future.
The concept of 3D printing has been around since as far back as the 1980s. However, it was only recently that the technology turned into a reality and became available on a mass scale. This revolutionary technology makes it possible for anyone to create products or parts of products using metals, plastic, mixed materials and even human tissue.
So how is it going to affect logistics and supply chain management? Additive manufacturing will democratize the manufacturing process, according to Ed Morris, director of the National Additive Manufacturing Innovation Institute (NAMII). It will enable manufacturers to “print” on demand, which will shorten the supply chain by making it unnecessary to have large quantities of finished products stacked in warehouses.
The implication of 3D printing for the logistics industry has potential upside implications. 3rd party logistics providers of the future will deliver raw materials instead of many finished products and may even provide 3D printing services at the point of delivery, which will be an additional source of revenue.
Visibility is one of the biggest problems for goods in transit. The application of the Internet of Things (IoT) along with cloud-based GPS will make it possible to keep track of individual items and their conditions. IoT makes use of Radio Frequency Identification (RFID) chips that “talk” to each other. Chips attached to individual items will transmit data such as identification, location, temperature, pressure, and humidity.
The implication of this capability will be immense. Goods will no longer be lost or misplaced in transit since each product will transmit its location. With immediate notification comes direct action and the avoidance of damaged goods when the chip signals oncoming adverse weather conditions, such as high temperature or humidity. Not only that, they will also be able to transmit traffic conditions and drive-specific data, such as average speed and driving patterns back to the central office. As supply chain and transportation visibility is a hot topic for Logistics Managers and Directors, 3rd party logistics providers, who adopt this type of technology, are surely to reap the rewards of highly satisfied customers.
A drone is an unmanned aircraft that can either be controlled remotely or left to fly autonomously through software-controlled flight plans embedded in their system. Drones are small, light, inexpensive to operate and can go where other modes of transportation cannot. Although 3rd party logistics providers haven’t started using the technology yet, there is little doubt that they will embrace it in the future.
In the future, 3PL companies will use drones to deliver small packages quickly in both urban and remote areas. Because of their high speed and precision, the use will shorten the supply chain and significantly reduce the costs of transportation. The only things, which are preventing the widespread use of this technology are issues related to government regulations, safety, size and weight limitations.
Although still in the trial phase, driverless vehicles have shown great potential as tools for logistics and supply chain management. The ability of driverless vehicles to sense the environment and navigate with zero human interventions makes these futuristic cars/trucks ideal for delivering products to customers. A big part of transportation costs is the driver’s salary. 3rd party logistics providers may substantially reduce their overhead by using driverless vehicles for delivery. Furthermore, such hot topics in the trucking industry as the trucker shortage and the long withstanding capacity crunch may cease to exist with the availability of driverless, autonomous trucks.
Another advantage of using driverless vehicles is that they are better drivers than people are, and thus the risk of accidents will be almost zero. They will not get drunk, race with other cars, take risks, become angry, lose concentration, doze off, talk on the phone, or send messages while at the wheel.
Augmented reality (AR) provides a direct or indirect view of the real world augmented by computer-generated sensory inputs, including sound and video. AR gives you an enhanced view of the world around you in real time and makes you more aware of your environment. In the future, employees at 3rd party logistics providers will use AR technology, such as wearable devices, to gain critical information about the freight they are handling, such as contents, weight, and destination. Understandably, such visibility through AR technology will improve the handling of goods, increase the speed of delivery, and reduce overall costs.
How do you think these technologies or other emerging technologies will change the service offerings for the way business is done by 3rd party logistics providers? Let us know in the comment section below!
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