Simply put, logistics is the management of the flow of goods or assets from the point of origin to the point of consumption.
In this case, logistics refers to managing tangible goods such as materials, equipment, and supplies.
Usually, logistics integrates other disciplines, and it’s a part of supply chain management as well as inventory management.
Logistics plans, implements, and controls the efficient flow of goods, services, and information to meet the consumer’s requirements. Surprisingly, even the simplest businesses of all need to have some sort of logistics or supply chain in place, so there’s no way logistics doesn’t impact our lives directly.
Also, like many things in our lives, logistics is changing thanks to technology innovation.
The evolution of technology is pushing the boundaries and changing how we do business, which directly impacts logistics as an industry. We’re getting accustomed to everything being immediate, but we don’t really stop to think about what a feat it is to have everything at our fingertips.
With that in mind, this article will talk about exactly what logistics is and how technology can help you supercharge your supply chain management.
Logistics and supply chain: similar, but different
Before we dive deeper into the concept, let’s dispel a common misconception.
Logistics and supply chain management are often used interchangeably, but they’re actually two aspects of the same process.
Logistics refers to what happens within a company. This refers to the purchase and delivery of materials, packaging, shipping, and transporting goods to distributors.
Supply chain, on the other hand, refers to all the elements outside of a company that work together to deliver your products to the consumers. This includes vendors, transportation providers, warehouses, and providers.
Let’s use a lemonade stand as an example:
Think of all the pieces that compose one. You need, at the bare minimum, lemons, sugar, and water, which you can buy at a supermarket. Then, you need to build the actual stand with the elements you probably bought at a hardware store.
That’s the supply chain: getting all the supplies from A, B, and C to build the stand and make some lemonade. Now, the well-orchestrated coordination that made those steps possible, that’s logistics.
Think of the supply chain as the end-to-end process and logistics as the different pieces that connect the source to the consumers.
Using another metaphor, logistics is the blood and the supply chain is the body. That means that if the logistics process doesn’t work, the supply chain stops.
In a nutshell, both logistics and the supply chain are inextricably intertwined and usually are parts of the same.
The role of technology in logistics
One thing is certain: the future of logistics lies in innovation and technology. The consumers of today expect goods to be delivered quickly, and that’s something technology can do.
Technology can increase productivity in the supply chain as well as minimize costs and errors. What’s more, these advances benefit all areas of the logistics industry: trucking, international transportation, supply chain management, and shipment tracking.
Let’s look at another example:
As a consumer browses the web for an article, the retailer’s software is looking for all the information that the person needs to complete the purchase.
From checking the inventory to tracking the parcel to delivering the package, technology accompanies the process from start to finish.
Take a look at this amazing chart from Deloitte that explains how technology is changing logistics and the supply chain.
As you can see, there are many ways technology has impacted logistics
How technology is shaping the future of logistics
The farther we look down the road of speculation, the easier it becomes to start imagining how technology can shape logistics, supply, and transportation management.
But not all is speculation.
There are many compelling reasons to believe that logistics is evolving. Businesses are actively looking for better ways of getting their products to their customers faster. Similarly, as digitization grows, companies are investing in increasing their digital capabilities.
Shipment Tracking Systems
In the past, when customers purchased something, they received an estimated delivery date, and then nothing–unless they made a phone call.
Today, thanks to the internet, and more recently, to the Internet of Things consumers can track their products using GPS tracking devices or apps and get information about their products 24/7.
This, on one hand, enhances the user experience, and on the other hand, saves businesses time and money.
That’s why logistics companies are investing in shipment tracking systems that enable them to monitor and manage their products.
Internet of Things (IoT)
Nowadays, pretty much everything is built with Wi-Fi capabilities and sensors. Logistics companies can leverage those capabilities and connect every piece of the supply chain.
The Internet of Things is opening more opportunities for supply chain and logistics companies. IoT can help companies reduce costs, avoid delays, and reduce accidents.
Companies can add IoT-powered sensors into cabs, cargo ships, trains, and parcels and connect them to a system or dispatcher that monitors and tracks the goods and assets. These sensors process and transmit information to every stakeholder so they can gain insights into the hidden risks and opportunities in the supply chain.
Radio Frequency Identification (RFID)
Radio frequency identification has been in use for quite a few years, and most logistics companies are familiar with it. RFID helps logistics companies save time by adding a tag or sensor on the product. This tag sends radio waves, and the company in charge of the product can receive and process that location information.
Imagine RFID as barcodes that are constantly emitting information to receivers that monitor whatever they’re attached to. Currently, RFID is used in distribution warehouses to monitor containers and in conjunction with GPS to monitor vehicles and assets.
Autonomous Trucks and Drones
Unmanned vehicles are a reality, even though the concept sounds like something out of a movie. Autonomous cars are already here, and autonomous trucks are not too far behind.
Companies like Embark and Uber have already made long hauls using self-driving vehicles, and while Tesla’s truck isn’t 100% autonomous, it’s a breakthrough technology that could reduce accidents and speed up the delivery process.
Similarly, Amazon, the logistics giant, has announced that they’re still developing their drone delivery solution, and while we won’t see drones crossing our cities with packages abreast in the near future, the fact that we’ve come to a point where goods can be delivered in less than a day is absolutely breathtaking.
Enhanced GPS Accuracy
You probably used a GPS to at least once this week, whether it was built into your vehicle or your cellphone. That being said, if you’ve been using GPS for a long time, you’ve probably realized how its accuracy has drastically improved over the years.
With that in mind, don’t forget how fleet management plays an important role in your supply chain, which is where using a GPS tracking device or app can come in handy.
Using a GPS gives you an extra layer of communication between your business and your fleet; it helps you reroute vehicles, locate stray drivers, or even recover lost cargo. In the past, tracking your assets involved getting on the phone with at least a couple of people, but now it’s as simple as opening your web browser or a dedicated app to find where your stuff is.
And if you ever thought that GPS tracking was costly, you’d better think again, because it’s not.
Last considerations about the future of logistics
While digitization has changed virtually everything about how consumers purchase goods, one thing hasn’t changed at all: people are still buying physical goods. That’s why, for the supply chain–and the digital economy as a whole–to function properly, physical goods still need to be moved from one place to the other no matter how digitized your logistics process is.
However, one thing is certain: today’s digital world seems to only be increasing the need for improved, disruptive physical logistics.
IOTrack is a smart, data-caching device that monitors location, time, temperature, impact, and positioning, which ensures enhanced visibility and reduction in product damage or loss.