Tech in logistics: threat, disruptor or differentiator?

Tech in logistics: threat, disruptor or differentiator?

Technology has been rapidly changing the way we do business in the last few years across different industries. The Internet of Things (IoT) is now taking the form of the "Internet of Everything", and the effect has been experienced by the logistics industry too.

Businesses are exploring superior technologies such as 3D printing, drones and driverless cars.

However, even at the existing level, technologies such as data analytics, omni-channel logistics and RFID (radio frequency identification) technology are making the processes within the industry seamless, automatic and cost-efficient.

Technology as a differentiator: The ease of processing information and raw data to make business decisions has already spurred some businesses towards unprecedented growth. Organisations that are able to harness the processing of information to make instantaneous decisions will have an advantage over other supply chain players.

Another technology that will play a major role in the logistics industry will be blockchain. Its implications range from simple asset tracking and transparency to real-time feedback from customers.

Logistics, as the backbone of retail and e-commerce, needs to react and offer innovative omni-channel solutions that satisfy the demand for more personalised, dynamic delivery options, as well as fulfilment services at a competitive price level. Blockchain technology enables businesses to drive this innovation.

3D printing: Technology is already making a difference by changing how we do business with fewer human interfaces. Advanced technologies such as 3D printing of spare parts are used sparingly in Asia because of cost concerns; however, once the convenience and cost trade-off is understood, it will have a major impact on the way business is done.

The worldwide market for 3D printing grew at a compound annual growth rate of 35.2% to US$4.1 billion in 2014, according to Wohlers Report 2015. The industry expanded by more than $1 billion, with 49 manufacturers producing and selling industrial-grade 3D machines. 3D printing in the logistics industry can help reduce inventory storage, enable better management of design changes and reduce lead time and complexity to supply remotely. In time, the supply chain will become more efficient, more local and globally connected.

IoT and blockchain: The IoT and blockchain will be the key to efficiency within logistics functions and across entire supply chains. Real-time visibility enables information to be shared at every level -- letting deficiencies be identified quickly so that problems can be immediately rectified, or possibly prevented altogether. This can lead to immaculate inventory management and superior customer service, meaning customers can expect products and services exactly when, where and how they want them. Companies that can take advantage of these benefits in the near term will save money, increase efficiency and keep their customers happy.

Cost control and volume trade-offs: There are two main challenges in integrating technology across businesses in Asia: cost and volume. Even if businesses were willing to invest in building the technological capabilities for their Asia operations, the volumes do not justify the investment. Asia is not a mature region, and emulating Western practices and adopting new industry trends is not popular. Investing in superior technologies will be a big step for some businesses.

Jobs of the future: With the advancement in technology, artificial intelligence (AI) will be taking over more jobs within the industry. For example, freight forwarders might become redundant. In the changing technological landscape, more than any specific skills in employees, companies will be looking at more flexible, adaptable people.

Some of the skills that will be in demand in the future are data science, operations skills, technology-based skills (especially app design) and robotics-based skills.

In summary: With more and more exciting technologies emerging more frequently, job roles are definitely going to change dramatically to be able to manage new needs. It is therefore essential that businesses invest in upgrading their existing workforces and ensuring that they are hiring the right kinds of people for new positions.

Recruiting the best of the best will be a daunting task. Supply chain solutions providers will have to look deeper and wider for experts. Technology makes it easier to connect with active candidates; the question is, are they the best of the best? This is where having a great brand and a wide network comes in. You can have the best technology, but if you lack the right people, progress will elude you.


Radu Palamariu is managing director for Southeast Asia of the Global Logistics and Supply Chain Practice at Morgan Philips Executive Search. The Link is coordinated by Barry Elliott and Chris Catto-Smith as an interactive forum for industry professionals. We welcome all input, questions, feedback and news at: BJElliott@ABf1Consulting.com, cattoc@freshport.asia

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