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What is Logistics 4.0?

clock 5 minutes | 17 Dec 2020

Drone delivering package

The impact of Industry 4.0 on manufacturing and the supply chain has been widely explored. Its technologies and processes during product design, testing and build have been the subject of many articles and studies.

However, this digital transformation is having just as much impact on the end of the supply chain as it is at the beginning. Logistics 4.0 is defined as using the data and analytics collected by smart manufacturing to improve operation efficiency and performance, meaning it holds plenty of opportunity for Logistics Managers.

So what are the Industry 4.0 technologies that are having the biggest impact on logistics operations and what does this mean for the future of our inbound and outbound processes?

Logistics 4.0 technology trends

In their recent study, McKinsey and Company found that there were four main technologies that will influence manufacturing logistics as Industry 4.0 grows.

These four areas are:

  • Digital control towers: these will enable real-time data to be captured from across a logistics operation, allowing a team to fix problems quickly or even prevent them happening.
  • Network engineering: by having a dynamic network design, logistics operations can adapt and continuously improve, enabling maximum efficiency and speed
  • Fleet management: innovations in truck technology mean that driver data can be easily shared and inform logistics decision making, such as telematics or fuel efficiency.
  • Carrier analytics: by continuously analysing data from third party carriers, manufacturers can ensure they’re getting the best possible performance and even compare pricing.

These technologies will not only enable logistics teams to increase their efficiency and performance, but get products to customers quickly, easily and at a low cost.

Smart logistics shown with an industrial robotic working in a factory warehouse

A complex supply chain

With the introduction of Industry 4.0 technologies enabled by reliable, ultra-fast 5G, it’ll become much easier to share data and communicate with different businesses in the supply chain. Whether the manufacturer is sharing details with a customer or a supplier is talking to a manufacturer, increased visibility of the supply chain will enable continuous improvements across the entire network.

However, this does raise challenges when it comes to cyber security. Finding the infrastructure that allows for the safe sharing of data and information without threatening intellectual property is a major concern, particularly for manufacturers.

Demand scheduling and planning

With more data comes more opportunity to analyse and plan ahead. As well as being able to spot and fix issues in the supply chain before they become a problem, increased sharing of data will mean that manufacturers can more accurately predict customer demand.

This means that manufacturers can schedule in production more accurately and inform their own decision making when building out a wider business plan. Having this information will mean customers get better, more efficient service and will enable manufacturers to future proof their businesses.

Better warehouse management

As the way that customers buy has moved from paper inventories to online, the shape and technology of warehouses has had to adapt to keep up with demand. Fully-equipped with connected devices, every operation is planned for maximum efficiency and speed and to manage an increased workload, including:

  • Omnichannel capabilities: warehouses now have to manage orders from a variety of sources, sometimes on behalf of multiple vendors.
  • Reverse logistics: collecting end-of-life goods from businesses, often while delivering new items, and arranging their disposal in compliance with environmental regulations.
  • Returns handling: communicating directly with consumers on behalf of vendors; managing the collection, storage, and sometimes repair, repackaging and resale of products.
  • Specialist storage: storing a broad range of goods (many of which will require specialist storage) introduces issues of quality control and compliance.

However, Industry 4.0 technologies are enabling warehouses and distribution centres to overcome these challenges. By equipping their warehouses with autonomous, flexible inventory management and artificially intelligent picking systems and robotics, industry-leading logistics operators are able to meet customer demand in an efficient, safe way. Plus, they can use the collected data to continuously improve their operations and stay ahead of the competition.

Robotic warehouse management

Faster, easier delivery

While manufacturers, retailers and distributors work to improve the quality, efficiency and breadth of their services, customer expectations are rising. The last mile of a product’s journey can often make or break customer experience. It’s also the hardest part of the journey to track, making lost and damaged items a common occurrence for courier companies.

With deliveries that don’t show up on time (or at all), and distribution centres or drivers who aren’t contactable, there are a lot of things that can go wrong during the last part of a delivery. All of which add up to unhappy customers and lost future revenue.

Logistics 4.0 can help to overcome these challenges with:

  • Automated and predictive delivery management: customers receive automated notifications to their email or phone letting them know exactly where their item is, and if its estimated time of arrival has changed.
  • Real-time item tracking: customers can check on their item’s status at any point by accessing a user-friendly system with access to every part of the delivery process.
  • Real-time route planning: rather than planning a route at the start of the day, drivers will have access to real-time route planning technology, helping to save time and fuel, and avoid delays.
  • Centralised data: no more phone calls to staff who have no information on your item. 5G will enable delivery information to be accessed quickly and easily.
  • Automated communication: artificially intelligent chatbots and personalised, automated messages will keep customers up to date without taking up human resource, as one chatbot can serve multiple users at the same time.
  • Machine learning: technology used by distribution providers will be able to learn from every delivery made, taking the data collected and using it to plan better future journeys.

Plus, as the data from these operations is collected, manufacturers can compare the performance of their carriers and easily determine the ones who aren’t meeting their targets. This will enable manufacturers to both reduce their distribution costs and keep customers happy.

Assembly line processing

How does Logistics 4.0 benefit customers?

In the consumer market, expectations of a quick, easy delivery have been set with years of online shopping. However, connecting the dots of the supply chain to ensure customers get this level of service is a constant challenge for manufacturers.

As a manufacturer and distributor, Essentra Components has been developing a long-term strategy to continuously improve our delivery to customers. By making investments in our warehouse management software and collecting, analysing and using a range of logistics data, we deliver our products to customers on time easily.

Plus, we ask for regular feedback from our customers via a Net promoter score. By using this measurement, we can feed in changes to our operations and processes to make sure we always deliver a hassle-free service to customers.

Industry 4.0: the terms you need to know