Blockchain closely tracks and transmits timely data and creates transparency, which lets retailers closely monitor inventory levels, which could lead to dynamic supply chains.
Blockchain and automation are emerging as new forces promising to transform shipping into a real-time, highly visible process. But the industry is still learning its way around these technologies, which requires not only the reworking of processes, but rethinking conventional practices behind these processes as well.
That’s the gist of a new study conducted by Penske Logistics, Infosys Consulting, Penn State University, and Korn/Ferry, which examines the global outsourced marketplace and leading trends for shippers and third-party firms in the shipping and logistics industry. “Real-time problems require real-time solutions,” the report’s authors state. “And manufacturers need to know that parts needed for production will arrive on time and in the quantities needed.”
Visibility means flexibility
The challenge runs through all processes that touch today’s shipping and logistics services, the report’s authors state. “Decisions on modifying the course of a shipment can be made at nearly any point in the supply chain,” they said. “Due to real-time visibility into the supply chain, a product is no longer on a set course once it leaves the warehouse. Weather disruptions, traffic delays or even a shift in consumer demand can alter a product’s course to ensure it arrives when and where it is needed. Innovative solutions to capture and analyze data, as well as the ability to optimize the supply chain, are providing greater value and flexibility to shippers.”
The key is to tear down “the silos between functions and process areas within the organization, and creates greater flexibility and responsiveness to deal with problems as they emerge,” the researchers add. “The real-time exchange of data allows companies to make decisions earlier, which can minimize the ripple effect of supply chain disruptions.”
This year’s study – now in its 22nd year — shows the importance of adapting to emerging technologies such as blockchain and automation. While 30 percent of third-party logistics providers and 16 percent of shippers see blockchain as a potential application, they have yet to engage with the technology.
“When a blockchain is managed all the way to the end user, it also has the potential to create demand chains as it closely tracks and transmits data in real time related to consumption,” the study’s authors explain. “By partially eliminating the multiple-party path of information that has historically been transmitted, shippers can get a greater understanding of real-time demand.”
Blockchain technology “breaks each movement down into a block and documents transactions every time a shipment changes hands,” the report states. “Linking the blocks together creates a record of the parties involved in the process and provides specific details associated with each movement, which all parties can access. The goal is to create one version of the truth, link information and create transparency.”
How real-time analytics eases the supply chain
There is also opportunity for real-time analytics that will facilitate the movement of goods across supply chains, the report’s authors continue. “Data generated through blockchain technology could provide more opportunity to analyze information, which is becoming more important in today’s data-driven supply chain. Because blockchain closely tracks and transmits timely data and creates transparency upstream and downstream, retailers can closely monitor inventory levels, which could lead to dynamic supply chains.” The challenge with blockchain now, the report adds, is a lack of standards and agreements among vendors and enterprises.
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The study also examined the potential of on-road automation, such as driverless vehicles, and ways in which automation is providing returns across the supply chain through digitalized load matching and warehouse robotics. The survey also finds a lack of investment in digitization and automation, including a lack of in-house talent to develop, implement and monitor these systems.
“Automation and digitization within the supply chain is driving change in two areas — the ways in which data is collected and utilized as well as technological advances on equipment used to transport goods,” the study’s authors report. Shippers and logistics firms “are collecting, transmitting and analyzing increased amounts of information, and data-driven decision making is the key to increase asset utilization, improve efficiency and decrease volatility.”
The amount of technology used on trucks has also increased, the survey finds. Technologies already available include “adaptive cruise control with braking, lane departure warnings, collision-mitigation systems, right-side object detection sensors, electronic stability control and telematics devices. Technologies currently in development include self-driving trucks, truck platooning, traffic jam assist and auto docking.”