The rise of Industry 4.0 is already impacting the way that supply chain managers do business. As it continues to promote digitization and interoperability across all touchpoints on the global value chain, it will no doubt bring about significant changes across a variety of different supply stream operations. No doubt one of the most significantly impacted processes will be transport logistics, which might lead one to wonder, “what will transport logistics look like in the Industry 4.0 era?”
Let’s say you’re driving down a winding country road to some remote destination. At first, navigating is easy, but as the sun goes down and your headlights come on it becomes more and more difficult to make sure that you’re driving safely down the correct course. Eventually, night has fallen completely and your headlights provide the only illumination—you have to slow your driving speed, so that if an animal or other unexpected nocturnal being wanders into the path of your headlights you’ll have enough time to stop the car. If there’s stormy weather, the visibility becomes even more limited, and the possibility of an unexpected snafu increases.
Let’s say you’re tasked with designing a factory. You need to decide how to integrate various production lines, where to locate specific resources, how to organize space in a way that maximizes efficiency within and between processes, and how to leave room for potential future process changes. The interplay of a complex series of elements and structures will ultimately determine the success or failure of many planned production programs, so your grasp of the interrelations between these elements must be excellent. Once the factory has been established, things become even trickier. If you want to reposition a piece of machinery, for instance, you should know in great detail what processes involve that machine and how those processes will be affected. In short, these are tasks that you wouldn’t undertake without a carefully devised strategic plans that accounts for a variety of modalities.
Imagine for a moment that you’re planning a camping trip with your friends. There are several of you, and the trip will last a few days, meaning that you’re going to have to take two cars and considerable volume of supplies. How do you decide how each car will be filled? Let’s say your friend already has tent poles and fire starting material, so it might fall to you to procure and transport sleeping bags and food supplies. If one car is more fuel efficient than the other, does that change your plans? How will you go about choosing the right route to your destination in order to find the right balance between toll roads and potentially less direct pathways?
In a recent research report, Business Insider found that when it came to machine learning, 53% of the company executives surveyed were interested in the emerging technology, but unclear as to its exact use cases and applications. Similar figures applied to executive attitudes towards other technological advances, such as artificial intelligence and 3D printing. Although machine learning in particular is already driving new Industry 4.0 workflows and fundamentally changing the way that manufacturers do business, it’s no surprise that many have trouble envisioning specific applications for it. The transformative power of new technological advances comes not from generalities, but from specific tools and methods for integration that must be carefully calibrated to specific business functions.
In a recent piece offering predictions for the state of supply chain management (SCM) in 2018, Gartner asserted that SCM was going to become increasingly technology-centric, with market forces putting tremendous pressure on manufacturers to adopt new and emerging technologies. When companies search for areas where their IT might be modernized, many may look to transport as a business process that can be further optimized through the adoption of modern logistics software. Once a new solution is adopted, however, it’s crucial that companies understand their technology well enough to get the most out of it, so that they can improve workflows and add value. To that end, here is a quick guide to putting transport logistics to work within your organization.
Even with the continuing rise of Industry 4.0, many companies treat transportation scheduling as something of an afterthought. Sure, many businesses have restocking rules and recurring transportation orders that are carried out on identical timetables every set number of weeks or months, but today relatively few manufacturers employ a truly robust solution for scheduling transportation. We’ve spent time on this blog touting the importance of transport logistics, but ours is obviously not the only opinion on the subject. Let’s take a few minutes to discuss some of the potential arguments used against it.
What comes to mind when you think about transport logistics? Streamlined product movement? Enhanced inventory management and monitoring? Better procurement processes? Or perhaps increased customer satisfaction or customer relations platform? While all these are certainly true, what less frequently comes to mind (perhaps incorrectly so) is enhanced business value. Though increasing business value usually comes into play earlier in the production lifecycle, increasing the efficacy of moving products from the production floor to the customer’s door has ripple effects across the entire value stream.
Because transportation relies on so many varying factors each with their own level of uncertainty or constantly shifting constraints (fuel economy, routing, obstacles in transport routes, and others), the capability to mitigate and respond to these moving targets is a crucial driver in helping manufacturing companies maintain delivery timelines, enhance the accuracy of their delivery dates and windows, and drive enhanced customer service. In addition, because transport networks can be varied and include a number of partners across a wide range of regions or locales, they can lead to even more complexity and nuance in facilitating a transport logistics strategy that drives business value.
For many of today’s manufacturing companies, operational transport planning is akin to a game of musical chairs. The strategy is often hard to decipher, network players don’t often work synergistically with each other, and the levels of risk or uncertainty continue to grow with each passing round in the game. As a result, it becomes almost impossible to secure a firm footing amongst the other players and thus the executed actions throughout the game become more chaotic, less strategic, and more risky.
Similarly, operational transport planning and its lack of transparency and visibility into the overall supply situation means increases in unnecessary costs and resources, missing or lost parts and deliveries, and more complex logistics that detract from the clarity necessary to leverage lean supply chain management principles. In short, operational transport planning can be a significant stumbling block for manufacturing companies as they work to reduce risk and increase transport and logistics efficiency.
It simply cannot be stated enough or more clearly: Success for manufacturing companies stems largely from the ability to control, mitigate, and reduce risk. While success can mean a number of things to any number of companies, the capacity to reduce the amount of uncertainty in operating a global supply stream is perhaps one of the most critical pain points across today’s manufacturing landscape. No matter how hard planners and managers work to contain risk, the sheer nature of a variant-rich supply network means risk in a variety of forms can plague companies across the entire value chain, everything from planning and procurement to production and transport logistics.
All this being said, there are a number of strategies, solutions, and principles manufacturing companies can deploy and integrate to reduce the level of risk in a cross-organizational manner that also helps to increase productivity and enhance efficiencies. One of the more integral tools in a manufacturing company’s toolchest is transport logistics. Or, put simply: the coordination of efforts, resources, and personnel to successfully moving products from the production floor to the customer’s front door. It sounds quite basic, yet in an era of varied partner networks and variant-rich production programs, it can actually be a significant challenge for manufacturing companies across an array of industries. But for companies that deploy a successful transport logistics strategy, there are a great many benefits to be experienced beyond simply delivering products during pre-defined delivery windows.