Why the Acceleration in Digital Supply Chain and Logistics Technology?

The value of transparency, big data, paperless processes and modern logistics technology continues to be prominent with the ongoing effects of the unprecedented events of recent years, such as the COVID-19 lockdowns, the Suez Canal blockage, port congestion, and labor shortages.

Supply chain technology is enabling companies to pivot rapidly in response to a swiftly-changing situation in a way that would have been impossible just a few years ago. As businesses deal with constraints on supply, demand, and transportation, the value of rich data, real-time updates, and paperless processes is becoming even more apparent. And in an unpredictable and fast-changing environment, collecting accurate, real-time data is key to successful adaptation.

Global logistics companies are expected to increase their use of digital technology, as manufacturers, retailers, and other businesses reset global supply chains.

Visibility, Real-Time, Compliance, Scalability, and Increased Agility

An increase in real-time data to allow commercial customers to better manage inventory by closely tracking ocean, air, rail and ground freight is key. To do this, many logistics companies are planning to expand their cloud-computing footprint and step up cargo-tracing capabilities powered by artificial intelligence (AI), data analytics, and connected devices. With the combination of these tools, variables such as weather, traffic, port congestion, and other potential disruptions can be taken into consideration when predicting delivery times. You can keep your customers in the loop of any delays and provide them with up-to-date delivery times using real-time reporting capabilities, customer portals, integrated communications and digital automation technologies has arrived.

It was suggested that by 2023, half of the world’s global leading enterprises will have invested in developing some form of real-time transportation-visibility software, according to information-technology consulting firm Gartner Inc.

More and more, rich data, real-time data, and digital cloud capabilities allowing paperless interactions are becoming the name of the game.

In the logistics industry, cloud computing platforms have many benefits, including easy access to information, scalability, reliability, compliance, world class data security and high performance—all without complex infrastructure management. Cloud platforms create many opportunities, such as improved agility, reduced risk, increased data security, less waste and frankly…. “peace of mind”.

Secure data and Cloud scalability is the ability to increase or decrease computing, storage, and network services to meet changing demand, but with less risk. This can be done quickly and relatively cheaply, and it is one of the primary drivers of the increasing popularity of cloud computing in logistics.

Cloud software can improve decision-making and help companies anticipate and predict market changes and disruptions across their supply chain. Cloud capabilities allow businesses to respond, adapt, and act faster, ultimately boosting agility.

Developing Smarter Systems Even Before the Pandemic

Even before the pandemic, when there were rising demands for speedier deliveries demanded by the growing e-commerce industry, many third-party logistics firms were already developing smarter systems, including AI software and autonomous warehouse robots to keep up with those demands. According to data firm PitchBook, the total U.S. venture-capital investments in logistics-focused robotics and automation makers have topped $1 billion over the past five years. According to the Harvard Business Review notes, progress toward the cloud was gradual until 2020. Since the COVID-19 pandemic and the resulting boom in ecommerce, the use of cloud computing in the logistics industry has accelerated dramatically. Interestingly, according to Report Ocean, the cloud supply chain management market was worth $4.4 billion in 2020. It is now registering an impressive compound annual growth of 20%, which means the market will reach an expected $27 billion by 2030. The development of cloud computing technology has created an interconnected, digital world that carries huge potential for the logistics industry.

Pandemic Uncovers Weaknesses in Supply Chain - and Logistics Industry Fast-Tracks Digital Tech such as Cloud, AI, and Automation

The pandemic revealed many pain points in complex supply chains, as flows of global trade were halted by border closures, travel restrictions, and lockdowns to contain the outbreak. In a Deloitte study done over the first six months of the pandemic, 79% of manufacturers expressed their intention of increasing their AI investment over the coming years. In addition, 76% are predicting that AI will be integrated to all enterprise applications by 2023. While the specifics will continue to change, it appears that the 21st century supply chain is entering a new phase of development - one that leverages technology for transparency and resilience, and encourages supply chain teams to work efficiently, creatively, and remotely.

According to a report by the International Finance Corp. (IFC), an investment arm of the World Bank Group, logistics firms need to take advantage of advanced technology to be as agile as possible and quickly adjust to shifting market conditions to cope with changing pressures.

“Logistics firms with robust digital capabilities allowing them to provide improved cargo visibility and tracking will be at an advantage as global economies begin to reopen,” the report said.

In addition, the report from the IFC also lists cloud computing, automation, and data analytics, among other tools, as key near-term investments, along with ongoing funding to develop robotics, drones, and autonomous vehicles. Gartner research and consulting firm comments, “The fallout from COVID-19 is expected to drive a double-digit increase in demand for robotic goods-to-person systems over the next three years.” Greg Aimi, a vice president at Gartner who covers global supply chains said, “Being able to make better routing, pricing and overall faster and more quality decisions in a faster time frame, or even autonomously, improves our ability to get things where they need to be.” Businesses are also contending with unprecedented levels of international transport restrictions and closed borders. More than ever, businesses can gain competitive advantages by having a strong handle on where goods are at any given time. If a business can identify exactly how far away a shipment is and how much time there is before it arrives, they’re afforded the maximum flexibility should it need to be re-routed or delayed. Organizations are rapidly updating their digital technology with cloud software, AI, and automation that enables real-time updates. This creates transparency, efficiency, and flexibility to track shipments and make effective decisions. Having this vital, rich data and knowing how it affects the shipments journey, from the shipper to the receiver and inevitably to the consumer, is now at the forefront of the entire industry.

“Modern” Technology Saved the Day

If this pandemic had occurred before 2010, it is likely that economic activity would have collapsed in many countries. Back then, evolving communications and systems technologies were expensive, inflexible in-house platforms and relied on fixed locations for production and administration. This also meant that manufacturing companies, feeding extended supply chains were inherently fragile to any extended periods of disruption to supply or demand. Fortunately, since then, the situation has advanced into a digital stream of information and can be controlled from almost anywhere, specifically due to cloud capabilities.

Supply Chain & Logistics Technology: The Age of Acceleration

Rapid. Turbo. High-speed. Accelerated.

These terms best describe the pace of technology innovations hitting the market today as compared to past decades with a focus on visibility, flexibility, safety, efficiency, and sustainability to help supply chain professionals compete in an ever-changing world.

The changes over the past few years have proven to be mind-blowing and they don’t seem to be over just yet. Gartner predicts hyper-automation will emerge in supply chains. Hyper-automation refers to the ability to quickly identify, vet, and automate business processes through the use of multiple technologies, including robotic process automation, machine learning, and AI.

Between 2025 and 2030, hyper-automation technologies are expected to mature and enter mainstream adoption. "They will help automate supply chain decision-making by augmenting human judgment," Gartner says. "Hyper-automation technologies will be available to increase the accuracy and speed of decision-making."

Experts say these changes in supply chain & logistics technology are only the beginning.

Future Acceleration with ITS NxGen

Supply Chain & Logistics technology is more powerful and accessible than ever before. “Modern” Customs Brokers and Freight Forwarding businesses that use it will be the ones that can survive any global disruption. As we navigate beyond the effects of the past few turbulent years, both logistics companies and shippers will find that investing in up-to-date, innovative, modern data technology and automation provides the critical capability to make smart, and agile decisions.

Are you looking for a powerful, but easy-to-use cloud platform that is cost-effective to manage your logistics business? ITS NxGen has a full suite of products and solutions that can be customized to fit your company. ITS NxGen's digital automation cloud platform provides many advantages including improved communication, collaboration and coordination between stakeholders, enhanced  visibility, reduced costs, enhanced security, and improved customer service. Reach out to us today.