Implementing High Tech Supply Chains with Smart Logistics
Famed American General John J. Pershing once said that soldiers win battles, but logistics wins wars. For many of today’s businesses, the same thing holds true. Without reliable, high-performance logistics systems and processes, these businesses will grind to a halt. They would not be able to access the raw materials they need to build or transport their products to consumers within a reasonable timeframe. As a result, businesses such as these, spend huge sums of money and time looking for and implementing ways to improve their logistics operations.
Today, most of those efforts center on a relatively new concept known as smart logistics. It is a catch-all phrase that describes the use of a variety of technologies to improve the speed and accuracy of logistics operations while increasing transparency and resilience. However, like most industry jargon, it takes a bit of careful study to understand which technologies fall into the smart logistics category and how to best use them to improve logistics and supply chain operations. This article provides an overview of the technologies involved in most smart logistics initiatives and discusses how businesses can use them to the greatest possible effect. Let’s dive in.
Smart Logistics Objectives
A smart logistics supply chain approach, in its most basic form, seeks to accomplish three objectives. The first is to reduce or eliminate choke points throughout the logistics system. That often means removing as many humans as possible from the process in favor of automation. Automated systems excel at repetitive tasks, handling them faster and more reliably than humans. Therefore, automation is one of the key pillars of any smart logistics initiative.
The next thing smart logistics aims to accomplish is improve operations through data collection and transparency. That is where Internet of Things (IoT) devices come into the process. It is their job to serve as the eyes and ears of the supply chain, both to verify that things are always running at peak efficiency and to identify the causes of any problems immediately when they arise.
Finally, smart logistics also tries to make smarter, faster decisions to facilitate efficient operations at all times. That is achieved by incorporating a variety of artificial intelligence (AI) solutions that aggregate the data pouring in from IoT sensors to eliminate every shred of waste and delay from the logistics process.
By focusing on those three objectives, businesses can develop a smart logistics strategy and implement it to perfection. Here is how.
Step One: Identifying Proper Smart Logistics Use Cases
Before embarking on the design of a smart logistics strategy, the first thing businesses need to do is determine how and where smart logistics could benefit their operations. Here are a few broad use cases to provide a frame of reference for the effort:
- Ensuring product production quality – this prevents slowdowns in logistics connected to product spoilage.
- Monitoring and anticipating shipping damage – this helps businesses prevent slowdowns related to damage in transit, and to preposition replacement products to keep things moving.
- Improving inventory and capacity planning – using smart logistics to stay one step ahead of customer demand or supplier constraints.
- Maximizing warehouse utility and improving conditions – monitoring warehouse environmental conditions and ensuring efficient space utilization.
Settling on a well-defined use case and overall goal is a key part of developing a workable smart logistics strategy. Only then can the organization move on to the next phase of the process.
Step Two: Designing the Smart Logistics System
The specifics of the next step, again, will vary from project to project. However, there are some broad best practices businesses can adhere to if they want to ensure the successful design and implementation of their smart logistics systems. The first is to start small. Smart logistics system design is an in-depth and complex undertaking. Therefore, especially at the outset of the smart logistics journey, it is important for organizations to not bite off more than they can chew.
The second important best practice is to begin every system design by looking for the simplest way to satisfy operational requirements. Supply chains and logistics operations work best when they are as simple and straightforward as possible. Introducing too many layers of technology runs the risk of adding extra failure points that can hurt, not help, the situation. Logistics system expansion will be possible when needed, as long as dead-end or proprietary solutions are not part of the initial plan.
Step Three: Securing Data and Ensuring Privacy
The next step of the smart logistics planning stages is developing standards for data security and privacy. Smart logistics technologies like IoT sensors and AI systems produce huge volumes of data. In some cases, that data, if exposed, could pose a risk to the business that owns it. Or it could represent an opportunity for a competitor to gain critical insight into the business’s operations.
For that reason, it is important for smart logistics systems to employ strategies like end-to-end and at-rest data encryption. Additionally, it is a good idea to create strict data access policies that limit access only to employees that need it in their work. Those who do have access should also have adequate data security training and understand their role in keeping the business’s logistics data safe and private.
Step Four: Creating Monitoring and Management Procedures
The next thing to do is create procedures to monitor and manage the new smart logistics systems the business plans to use. This requires a two-prong approach. The first prong is the designation of employees to monitor the performance of the smart logistics systems themselves. It will be their job to monitor assets at the device level to make certain that everything works as it should. It will also be their job to make sure the data streams coming from the smart logistics hardware is accurate, timely, and getting to where it is needed.
The next prong is to decide on the key performance indicators (KPI) that will serve as a measure of the system’s relative success or failure. To do this, a business need only go back to its goals outlined in step one. In most cases, that will point the way toward which KPIs to monitor and assess as a part of the business’s smart logistics strategy. In some cases, it may be desirable to monitor multiple KPIs to judge overall smart logistics system performance. However, if it seems necessary to monitor more than two or three KPIs, there is a good chance that the system design, as completed in step two, is broader than it should be.
Step Five: Integration with Other Systems
The final stage of the process is to decide which external systems might benefit from gaining access to the data produced by the in-production smart logistics systems. For example, near real-time information regarding product movement through the supply chain might make a perfect addition to a business’s ERP system. There, it could enable critical insights to guide procurement, manufacturing processes and planning.
It might be beneficial to connect smart logistics data to the business’s CRM system, where it might power customer-facing product tracking or API-based data access for large customers. That type of integration could create critical advantages in customer service which other competitors may not have the technology to match. In that way, smart logistics systems can turn into key differentiators in markets where true operational advantages are hard to come by.
Your Smart Logistics Partner
The adoption of smart logistics technology offers businesses in multiple industries a rare opportunity to improve their already lean and efficient operations. However, it is not something to take lightly, or it could turn into a costly and complicated hindrance to effective logistics processes. That is where Outsource IT can help. We offer consulting services to help businesses handle project planning and execution, as well as procurement services to help identify, purchase and implement the right technology to power a smart logistics initiative. So, if your business wants to chart a course into the smart logistics future, contact one of Outsource IT’s knowledgeable account managers to get started today.
