Imagine for a moment that you’re a manager at a large restaurant. Part of your job entails assigning sections to your servers in a way that ensures that as soon as a customer’s food comes out of the oven it’s being moved to the appropriate table. Other than the short lead times, this may seem simple enough—but let’s say the restaurant is split up into a few sections. There is a bar area, which has happy hour specials during some days and times, which means that your servers need to know that these patrons might be receiving slight variations from the usual menu that wouldn’t be appropriate in the other parts of the restaurant. These items are still being cooked on the same lines as the others, which means that all parts of a given meal might not come out of the kitchen simultaneously.
Lots of businesses across disparate corners of the supply chain like to talk about their efforts to go lean, i.e. to drastically reduce their inventory usage by reducing lead times between production and shipping. This is often a logistical high wire act, requiring businesses to improve their production control, their demand forecasting, and their transport logistics. It’s also something that many furniture manufacturers have been doing since long before there was a trendy name for it. In fact, many modern furniture manufacturers rely on workflows that skip the inventory stage altogether, with products going straight from their respective production lines to the delivery vehicles that will bring them to their ultimate destinations.
In a recent Seattle Times Article, readers got an intimate account of how Cloudburst Brewing creates its seasonal fresh hop beers. While most hops used in beer production are dried before they’re shipped from the farm, fresh hop beers utilize fresh-picked, “wet” hops that haven’t been dried yet. As such, this popular style can only be brewed during and immediately after the annual hop harvest, and only under ideal conditions. A traffic jam, a flat tire, or a power outage at the brewing facility could jeopardize brewers’ efforts, owing to the extremely short shelf-life that these “wet” hops have.
Let’s talk about Amazon Go for a moment. The incredibly successful online retailer has recently made headlines with its latest foray into brick and mortar shopping, a series of convenience stores that, notably, don’t feature any human cashiers. Instead, shoppers (all of whom need an Amazon Prime account) use an app on their phones to scan each item they put into their (physical) shopping cart. This is noteworthy for a host of reasons, but let’s look at it from an inventory management perspective. The store is stocked with a considerable number of items, which all need to be replenished as they are sold, and Amazon is able to track the flow of goods out of their stores with no human intervention. Not only that, but they’re able to link each piece of inventory that leaves the store to a particular user account, and then make recommendations to that user based on analytics processes designed to predict future buying behavior.
Logistics 4.0, digital logistics, modern transport logistics: whatever you want to call it, the new paradigm emerging in the world of transporting goods from production plants to consumers is gaining steam rapidly. While, in the past, logistics was frequently a matter for pen-and-ink planning, relying on a set of well-trodden trade routes, the industry is becoming more sophisticated, more complex, and more connected than ever before. As the industry evolves, the utility of this new level of connectivity will become more and more apparent, resulting in exciting transformations in the way that goods are moved from place to place. Don’t believe us? Just take a look at some of these statistics.
Imagine for a second that you’re entering a friendly betting pool for the 2018 World Cup. Germany won the contest in 2014 (the most recent tournament), so you decide that it stands to reason that Germany will win again this time around. Hindsight being 20-20, we now know that you would have lost your bet, as France won the tournament and Germany didn’t advance out of the first round. Your betting strategy of assuming that past results would continue to hold ultimately wouldn’t prove to be the best approach.
Imagine a scenario: Your company has contracted a shipper or freight forwarder to complete a delivery of parts to one of your customers. Because of extensive data-collection during your research and development for the parts, you know that high temperatures over a prolonged period of time can increase the part’s failure rate. As a result of a shipping delay, these parts spend too much time in a container that’s not properly temperature controlled.
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.