How Does Technology Help to Manage Logistics Virtually to Cut Down the Cost?
Supply and demand are two fundamental factors of a business that keeps it operational. Demand originates from the consumers and suppliers may or may not influence it. Technology Trends To Manage Logistics Virtually to Cut Down the Cost.
What they have full influence on is supply. Starting from the delivery of raw materials up to the final product reaching a consumer, efficient logistics plays a critical role in the supply chain. More optimized a business’ supply chains, more costs it can cut.
And for that, new technology is providing an essential helping hand. Large businesses are deploying new and innovative distribution methods to curb the expenses involved with delivery vehicles and the workforce.
Some relevant innovations and how they are saving companies on supply chain management are mentioned below:
1. Delivery drones
Commercial drones are one of the devices that are gaining mass popularity with passing days. It is estimated that this market will become a $141 billion industry by 2023.
Example of drone delivery began back in 2013 with DHL delivering medicine with their prototype Parcelcopter.
The most popular example of drone delivery is Prime Air by Amazon. The company claims that its drones can transport orders with a weight of up to 5 pounds in less than 30 minutes.
A study conducted by Deutsche Bank back in 2016 found that drone delivery could cost as low as $0.05/mile, whereas a premium delivery costs around $6.
“Lights out” is a manufacturing process that is fully automated with the presence of minimal to zero workforces. Automation uses a combination of software and technology in various areas like inventory sorting, packaging, and labelling.
One of the best examples of automation is Audi’s body shop in Ingolstadt. The robots working here do the job of around 800 employees.
Another example is the fully automated warehouse of Cainiao, the logistics arm of Alibaba Group. The establishment has the largest congregation of automated guided vehicles in China.
A report by Strategy& estimates that automation will cut global logistics costs up to 5% by 2020, up to 20% by 2025, and up to 47% by 2030.
3. Cloud computing
Cloud-based applications are helping businesses to understand logistics prices associated with every area in real-time. Also, cloud computing systems can detect logistical patterns through analytics to help optimize the movement of goods and reduce costs.
Known as freight forwarding, several companies have emerged in recent times, with Flexport serving as a prime example. The relatively small company of 1,000 people serves more than 10,000 clients.
According to 3M EMEA department, the company saved around 35% on transport costs and reduced CO2 emissions by 50%.
4. Self-driving vehicles
The majority of self-driving vehicles are available to the general public with little use in logistics. However, numerous companies are testing such cars in long-haul delivery.
Embark is a US-based company whose autonomous truck completed a 2,400 km journey around the country.
TuSimple is another firm manufacturing self-driving vehicles that can drive even at nights with the help of night vision.
DHL estimates that’s self-driving trucks can help businesses save up to 40%/km in logistics costs.
Internet of Things (IoT), wearable technology, robotics, and electric vehicles are the other contenders that are capable of lowering logistics costs in the future.