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Logistics 4.0: The New Transportation Era

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E-commerce was launched in the 90s. By this time, logistics processes were only meant to take the goods from one site to another. Today, the landscape has changed: we are in the era of Logistics 4.0. in which customer experience, efficiency, and sustainability prevail.

Logistics 4.0 is a consequence of the digitization processes and the Industry 4.0 framework. It means putting in constant communication devices located in containers, vehicles, pallets, transportation systems, etc so decisions can be made quicker and with more information.

An example of a company that is embracing this philosophy is Revoolt. Revoolt is a last mile delivery company that bases its business in three main pillars: electric vehicles, Internet of Things and cloud. Their fleet is composed by connected electric vehicles that send and receive data from the OBD port of the car. This data is stored and analyzed in their cloud platform.

 

The theory that underlies this new way of understanding logistics is the 7Rs of Logistics (“Right Product, Right Customer, Right Quantity, Right Condition, Right Place and Right Time”). Now that the market demands are so high, companies need to put in place systems that allow them:

  • To enhance customer knowledge, so they can improve customer experience.
  • To install continuous improvement systems to achieve market efficiencies.
  • To take action on the environmental impact of operations.

To do so, there are many technologies that are transforming the logistics industry as we know it.

The Internet of Things

Thanks to connected devices located all over logistics and supply chain management processes, we can extract real-time data that are immediately usable. Among the various applications that IoT has in the sector, we can find the following:

  1. Supply chain monitoring,
  2. Vehicle tracking,
  3. Inventory management,
  4. Safe transportation,
  5. Predictive maintenance,
  6. Process automation.

Besides, the most advanced IoT platforms already have systems that cut human error:

  • Through alert systems when any of the data being monitored falls outside the norm. This way, technical teams can act as soon as possible.
  • Through remote update systems (Over-The-Air updates systems), which allow updating the software whenever there is a new version available, without the need for physical intervention. This also allows facing the security problems associated with connectivity.
  • Through remote configuration systems, which are even more crucial in a sector such as logistics in which almost all connected things are in motion.

Data-driven Technologies

When we talk about the Internet of Things, we are mentioning the value of the data gathered thanks to the connected devices. Hence, there are some technologies such as Big Data or Artificial Intelligence that allow improving logistics systems thanks to the data analysis.

The important thing about the data is not only how and when they are collected, but also how they are analyzed and treated. Thanks to IoT-enabled devices, data can be obtained in real time through many different points. With the agglomeration of all these data, companies can make more accurate and exhaustive decisions from the moment in which the product is ready to be shipped until it arrives in the hands of the client.

For its part, Artificial Intelligence is a clear enabler for human action. We are talking about machines or devices that can react to certain situations based on the data. For example, when a certain quantity of product is ready to be shipped, a device can issue an alert, make a call to the closest vehicle, calculate the time it will take to get to the warehouse and thus, issue a message to the customer with the estimated arrival of the order.

Blockchain

Blockchain technology is revolutionizing Logistics 4.0. Often, in logistics, data are entered manually in computers and machines or are handwritten. In the age of technology, to what extent can we trust this type of data that can be subject to fraud as easily as manually modifying a number or letter?

Well, in this sense, Blockchain is bringing “trust” because it allows keeping the record throughout the flow of physical goods. This simplifies the transparency and traceability of supply chains. An example of when to use Blockchain technology is in pharmaceutical products, which may need specific handling such as cold transport. In these cases, a break in the cold chain can be a serious accident with many entities involved. Thanks to a reliable record in Blockchain, companies can establish measures quickly and transparently.

 

As we have seen, technology is entering very strongly to change the way in which logistics processes are carried out in companies. All of them aimed, on the one hand, to improve the customer experience, with more transparent track-and-trace tools. And on the other, to generate efficiencies in companies, which have a greater volume of data in order to make informed decisions, and even to establish automatic processes thanks to Artificial Intelligence or Machine Learning.

But when we talk about Logistics 4.0, not everything is connectivity and data per se. We also have examples such as Amazon Prime Air, where drones make the deliveries, and which aim to combine all the aforementioned technologies to better serve customers. On the other hand, what is being the revolution of the new methods of physical transport is the autonomous car, by which the human condition of any of the processes will be eliminated.

However, as technology advances, we must bear in mind that security is crucial. Imagine there is a hack in merchandise vehicles or an intervention in programs that identify your customers. How much would it cost to you? It is necessary that, within Logistics 4.0, security is ensured to avoid any type of attack that puts the integrity of the data at risk.

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Article written by Cristina Marcos, Marketing Manager at Barbara IoT.

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