LOGISTICS – CHANCES AND DISRUPTION
Tons of paper were yesterday. Speed and new perspectives bring the success.
Parcel delivery via drones, autonomous ships, mobile warehouses. Means of transport that communicate with each other and the prediction of customer behaviour: What sounds like science fiction today will soon be reality. The logistics industry is in transition. Startups are changing the shape of the logistics sector with disruptive business models. In short: competitive dynamics is cross-market and cross-industry. For logistics companies it is crucial to pursue new technologies beyond their own industry.
How to identify and utilize innovation and technology opportunities early? How to stay up-to-date? Our innovation and technology experts find answers for these questions every day. With our LOGISTICS spotlight, we give some insights and impulses. Open minds for new chances and different innovation fields. Competition implies new opportunities. Catch them as a pioneer and create great innovations for your business in the digital age. Currently, we deal with the following innovation and technology developments in logistics:
# 1 TRANSPARENCY AND TRACING
Even today, in the age of digitalization, logistics processes are still being documented on paper in many places. And the supply chain is often non-transparent. Leading to exclusive access to information. But the future is becoming more decentralized and interconnected. Feedback loops are eliminated by decentralised technologies like blockchain and RFID. They enable to track the product from its origin and production to the warehouse. This provides opportunities to develop innovative services. An example for blockchain logistics services can be seen in the project Tael: For food tracking. In addition, the project uses RFID labels to monitor the food’s originality in real time.
Innovation ecosystems of partners are a success accelerator in the digital age. They facilitate added value and innovative success in logistics. For the transparent flow of goods, Maersk & IBM make blockchain available for an entire logistics network. All members benefit from a secure exchange of important data by using blockchain. Without revealing confidential details or compromising the privacy of transactions. Working together in an ecosystem enables to create far greater value than any one could achieve on its own. This is also underlined by current projects such as TURVO from San Francisco and FAST from Haifa. Both startups realize the networking of supply chains and logistics companies. For the joint development of new business opportunities, as social networks of logistics. In-depth insights into innovation ecosystems as a success accelerator can be found here.
Our perspective from EARLY BRANDS: logistics companies that are not open to developments out there are quickly going to be outpaced. We recommend to have transparency and tracing innovations on the radar with a cross-market and cross-industry view. They can often be interlocked with existing logistic processes. For competitive advantages and added value in the logistics chain.
# 2 DISRUPTIVE TRANSPORT SOLUTIONS
Innovative transport solutions are another accelerator of change and competition in logistics. Therefore, we recommend observing the following developments: Shared transport, autonomous driving, drones and crowd-sourced logistics. This is already reality. Not in bulk, but in first projects that are ready for the market today. Already today, for digital natives the access to transport services counts much more than the actual ownership. The principle of sharing also affects innovations in the logistics industry: the shared use of the means of transport minimizes space, reduces costs and speeds up delivery times. In our real-time worldwide scouting for logistics companies we see a variety of innovative shared transport solutions. A particularly interesting project is Cargomatic. The startup provides free space on trucks and cost sharing.
A technological leap that is currently shaking up transport logistics is autonomous driving. On the road, by seaway and in the air: they bring flexibility to a new level, increase operating times and utilization. Here, companies like Volvo Trucks, Rolls-Royce and the audit firm DNV GL are pioneers. The truck manufacturer already transports limestones without drivers today. And prototypes of Rolls-Royce and DNV GL autonomous container ships have already been tested. Ships that are crossing the oceans without crew, solely driven by electric motors, are within reach. Logistics companies that integrate their services with the possibilities of autonomous driving systems can supply customers at lower costs. This shows how innovative technologies enable a new cost structure and competitiveness.
Disruptive transport solutions are strongly driven by the e-commerce boom and the “I want it now” mentality. Success on the last mile becomes a decisive competitive factor for many logistics companies. Here in particular, it is important to recognize disruption and innovative design opportunities for the own company with a cross-market and cross-industry view at an early stage. Delivery on the last mile becomes one of the biggest challenges in urban logistics. Agility and flexibility are needed. With innovative digital services, bottlenecks for logistics in the last mile are significantly reduced. Uber, Hitch und Flex are just a few examples.
Drone transport is another innovation accelerator on the last mile. They can simply fly around traffic jams and quickly transport goods from A to B. This vision is realized by the aviation giant Airbus with the project Skyways. We recommend transport companies to evaluate the chances and the competitive potential of drones for their own company. Our experience is that the at first glance complex technology around drones can be used faster than expected with tailor-made tech partners. Young technology companies such as Flirtey, Unmanned Life and Skycart are open to partnerships to test and commercialize their drone technology in new markets and customer segments.
The merging of innovation flows in “sharing” and “last mile logistics” is reflected in the development of innovative projects of “crowd sourced logistics”: Here, transport activities of logistics service providers are relocated to private individuals with unused space capacity. By car, by bicycle or by train, transport services are provided against payment. These are often ways that private individuals cover anyway. There is always a driver available from the crowd. Existing logistics chains are being redesigned – and offer new business opportunities for logistics companies. When the possibilities of crowd logistics are neatly interlocked with one’s own service offering.
# 3 INVENTORY AND WAREHOUSE INNOVATION
The outlook into the near future is smart. Services become intelligent. Smart services like the smart home become familiar to more and more people. Also, in logistics we observe the development of smart warehouses. The smart warehouse is automated and interconnected. The acceptance of goods, organization, sorting and identification are carried out automatically on the basis of IoT and AI. Look inside Alibaba´s smart warehouse in Huiyang where robots already do 70% of the work. Supportive developments in technology include 3D printing as well as Augmented Reality (AR) and Virtual Reality (VR). 3D printing offers design, manufacturing and service flexibility for many industries. Products can be printed directly on-the-spot for satisfying all kinds of individual requirements. This offers completely new dimensions for the organization and planning of warehouses. Here too, cooperation and the design of innovation ecosystems is what counts: Let’s take the data glasses commonly developed by Bosch and SAP. Just by looking at barcodes warehouse workers get their orders – called pick by vision. Further insights into the possibilities of VR, AR and 3D printing are given by our EARLY BRANDS experts in the article: Technologies of our time. Logistics providers who adopt these technologies will be the winners.
Digital sharing platforms are also on the rise in warehouse management: Shared warehousing services can reduce excessive storage capacity. Startups such as Flexe and Flowspace bring together companies that have unused storage space with companies that need storage space. A win-win situation. And even the first large corporations like DHL offer their vacant storage space for rent via platforms.
How can logistics providers think in innovation fields when it comes to warehousing? Where are attractive business opportunities outside existing paths? First companies experiment with storage underwater. Underground storage and mobile warehouses are also innovative answers in order to solve the space shortage in rapidly growing metropolitan areas and mega cities. In a mobile warehouse, inventory is easily stored in vans. This enables flexible upselling even during the delivery process, where picking takes place directly in the mobile warehouse. The principle of mobile warehouses is also reflected in the development of “anticipatory logistics”.
# 4 ANTICIPATORY LOGISTICS
Anticipatory logistics: Big data and algorithms are used to make predictions about possible events in the future. And derived options for action for logistics. There are currently several innovative providers developing here, such as Transmetrics and Clearmental. Purchase decisions are already anticipated today and goods are delivered before the customer has ordered them. The so-called predictive shipping. Amazon is already well positioned with its patent for predictive shipping.
Current findings from our worldwide EARLY BRANDS innovation and technology scouting for logistics show: anticipatory logistics can do even more! To avoid late deliveries, for example, the technology company Emicen offers predictive analytics solutions. Anticipating events is an innovative power booster to make the supply chain more flexible and faster, greatly facilitating supply chain planning. For logistics companies, this offers completely new approaches to reposition logistics services.
# 5 SUMMARY AND OUTLOOK
Overall, we at EARLY BRANDS Innovation & Technology Consultants see the following developments. First, the digital transformation is disrupting traditional logistics processes. Innovative developments are rapidly increasing. The disruptive innovation and technology competition of key technologies such as blockchain, VR, AR, AI and big data put additional pressure on the logistics industry. Second, logistics providers are in a hyper-competition. Here, it is important to quickly recognize opportunities through cooperation with startups, and to utilize the potentials in an agile and creative way. This helps not to fall behind players like Amazon and Alibaba. Therefore, now is the time to rethink logistics. But what is the ideal starting point? The knowledge about the relevant innovation and technology developments for your own company. This is exactly where our EARLY BRANDS experts have their focus on: cross-market innovation and technology scouting, in real time. And how this creates attractive business opportunities. Rethink logistics with us and keep your finger on the pulse of the time…
Catch the Future..!