What is the role of technology in the supply chain?

What is the role of technology in the supply chain?

Natalia Figas
February 10, 2021  | 4 min read

"New technology can either better enable something you were already doing, or it can allow you to do things that you never did before." (Bob Bowman, SupplyChainBrain).

Deloitte's newest, Tech Trends 2020, cited below, shows in short what the role of emerging technologies in supply chain and logistics are.

"For logistics, manufacturing, and supply chains, digital twins combined with machine learning and advanced network connectivity such as 5G will increasingly track, monitor, route, and optimize the flow of goods throughout factories and around the world."

Tasks in focus:

  • to track,
  • to monitor,
  • to optimise route planning and the flow of goods.

The next sentence brings even more explanation.

"Real-time visibility into locations and conditions (temperature, humidity, etc.) will be taken for granted. And without human intervention, the "control towers" will be able to take corrective actions by directing inventory transfers, adjusting process steps on an assembly line, or rerouting containers."

Once again, tech solutions help to:

  • improve real-time visibility,
  • take corrective actions without human labour,
  • direct inventory transfers,
  • adjust process steps on an assembly line,
  • reroute containers,
  • monitor assets and automatically keep track of stock,
  • lower costs of shipments,
  • limit delays

But leaders in the T&L sector see beyond this description and elevate technology to a strategic business priority.

Why?

Because technology-driven attitude can beat the competitors out. And - especially essential these pandemic days - assure the survival in hard times.

 

Which technologies are used in supply chain visibility projects?

A wide range of technologies are used when companies try to improve their supply chain visibility.

Let us focus on the most frequently mentioned:

  • Information exchange (EDI's, API's)
  • Location systems (GPS, GLONASS)
  • Data capturing and identification technologies (RFID, Bluetooth, NFC, barcodes, QR codes)
  • Internet of Things (IoT)

How can they be used?

Technologies provide essential information to improve visibility in your supply chain and manage assets smarter.

 

Information exchange

API and EDI are made for quicker (than manual) and automated information exchange between IT systems.

EDI (Electronic Data Interchange) enables immediate transfer of orders, invoices, shipping documents included in typical trade documentation.

  • Benefits:
    • reliable and proven technology,
    • used across almost every industry, including logistics
    • cheap implementation
    • compatible with all IT systems (ERP, CRM, etc.)
  • Limitations:
    • delays in information transfer may take up to two hours
    • although transferred data is encrypted, you need to invest a bit more in security systems for maximum security
    • it becomes a legacy technology in logistics

API (Application Programming Interface) is a computing interface that enables bidirectional communication between systems. Logistics uses API in CRMs and TMSs to pass information between carriers, shippers, brokers, and other supply chain partners.

  • Benefits:
    • API link 3PL’s and shippers to the carrier’s online platforms. This allows the customer to easily and quickly review tracking info, review and download proof of delivery forms, and ensure rates are accurate and updated.
    • APIs are an evolutionary improvement on the standard EDI message sets
  • Limitations:
    • API integration requires that all the involved systems have open APIs. Especially legacy systems do not offer this

Location systems

Location-based systems (GPS, GLONASS) provides information on (more or less) accurate location of vehicles, assets, etc. in real-time. It is basic information to calculate ETA (estimated Time of Arrival) when shipping a cargo or a vehicle arrival.

Skyrise.tech develops solutions used for tracking cargo’s location with mobile apps. For more information, contact us.

  • Benefits:
    • Obtaining real-time location of shipments
    • The possibility to provide ETA
    • Enhanced operational efficiency
    • The possibility to optimise shipping routes
  • Limitations:
    • Data about location always have some time lags

Data capturing and identification technologies

These set of technologies, such as RFID, QR codes, Bluetooth, is used for identifying objects, e.g., pallets, products, granting access or monitoring a shipment’s condition. They can also be used for location tracking.

  • Benefits:
    • Task automation, e.g., products listing
    • Obtaining real-time information on inventory levels
    • Relatively cheap to implement
    • Can function as networks
  • Limitations:
    • Range of communication is limited (from 4 cm up to 500 m - depending on the technology)

Internet of Things (IoT)

Internet of Things (IoT) gains its momentum. Smart devices with embedded sensors monitor a shipment’s environment and send alerts when a shipment’s condition is somehow threatened, e.g., by a shock or not being at the forecasted location (delay).

  • Benefits:
    • Can monitor a wide variety of factors, e.g., location, temperature, light intensity, pressure, motion etc.
    • Collect and process data in real-time
    • Help to safely transport assets and shipments
  • Limitations:
    • Devices always have some small time lags
    • Sending data is dependent on access to a network/access to phone operator
    • Price

Besides EDI, API, IoT, location-based systems or communication protocols, what other technologies will have a direct impact on the supply chain?

 

Which technologies will be used to ensure supply chain visibility in the future?

DHL's Tech Trends radar monitors and analyses the technologies that will shape our future. According to DHL, the effectiveness of the reports is at the level of 91%.

Here is a list of the technologies you should pay attention to (+ examples of the usage in logistics):

  • Big Data Analytics - provides proven analysis and help to draw accurate conclusions based on big data
  • Cloud & API's - safer and quicker information exchange between parties
  • Internet of Things - allows to monitor factors that are crucial for transportation processes
  • Robotics & Automation - shortens the time needed to load and unload shipments
  • Artificial Intelligence - helps to predict the demand for particular products
  • Self-Driving Vehicles - safe cargo transportation in closed environments
  • Next-Generation Wireless - broadens and speeds up the horizons of Internet communication
  • Blockchain - ensures safe and uncorrupted information flow within the chain
  • Digital Twins - by using digital models companies will better understand and manage physical assets
  • Quantum Computing - storing a larger amount of information while using lesser energy
  • 3D printing - speeds up the production processes by printing parts

Skyrise.tech's approach to supply chain development projects

As we said earlier, technology plays a vital role in the supply chain. At Skyrise.tech we work with the latest technology to improve business processes and improve your supply chain visibility.

Some of the areas and technologies we are working with are

1) Flow of data between internal and external systems

Communication is essential in any business activities. Whether internal or external - with information going forth and back, you and your business partner will achieve more in a shorter time and with less stress.

Technologies that may help: API, EDI, custom integrations.

 

2) Managing inventory better

Information about the possession, location and flow of resources (not only in warehouses) is important in managing and storing supplies and in products ordering.

Technologies that may help: RFID, IoT, bar codes.

 

3) Optimising processes

The technologies by which you collect and process data give you the opportunity to draw conclusions. And the conclusions help to optimise various processes - from determining the delivery route, through automation of tasks, to document flow.

Technologies that may help: Blockchain, Big Data.

 

4) Machine Learning

The strength of Machine Learning lays in analysing large sets of data. Upon these information sets computers can manage logistics systems better or even predict and track future demands for, e.g., new products.

 

The summary

Whether it is a simple mobile application to track deliveries or a complex network of IoT devices, the role of technology in the supply chain is significant.

It helps to maintain control over logistics processes, manage inventory better and increase collaboration between supply chain partners.

Companies use different technologies to their advantage. Among the most popular we can mention GPS, EDI's or RFID. A few more are emerging, e.g., blockchain, digital twins or technologies of supply chain visibility.

T&L leaders elevate technology to a strategic business priority.

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