Let's say you've got big event coming up—maybe an awards ceremony, or an important anniversary. You and some of your friends are going to the event together, and to make the whole affair a little more special you decide to rent a limousine take you there and back. Though the venue is only an hour’s drive away, your friends’ homes are spread throughout your town in ways that make planning the optimal order in which to pick them up (and drop them off after the party’s over) a challenge. On top of that, not everyone will be ready at exactly the same time, and those who would be picked up later in the process would like to know in advance so that they can spend more time preparing. Where do you begin when it comes to planning out a tour that works for you?

In theoretical computer science, the traveling salesman problem asks the following question: "Given a list of cities and the distances between each pair of cities, what is the shortest possible route that visits each city and returns to the origin city?" Anyone who has worked in transport logistics or transportation management knows that in most cases there is no easy answer to this question, and that finding the optimal route between different cities or even different stops along the same tour can be a serious logistical challenge—one that requires planners to manage customer delivery windows, anticipate traffic patterns, and optimize time and distance.

Reports of your job’s impending obsolescence have been greatly exaggerated. Sure, as Industry 4.0 systems continue to gain traction the nature of work, not just in the automotive and industrial spheres but across the entire global economy, is likely to be affected in tangible ways by the rise of connected, cyber-physical systems and the increased use of internet of things (IoT) devices. But despite what you might have heard, this doesn’t mean that people’s jobs are going to vanish at an unprecedented rate. After all, the first three industrial revolutions (steam power, electricity, and computers, respectively) helped to expand the labor force rather than contract it—why should the fourth industrial revolution be any different? 

These days, when most people think of automation, one of their first thoughts is of self-driving cars. What many people don’t realize, as they picture themselves magically napping away their morning commutes, is that when it comes to autonomous vehicles there are actually six levels of autonomy. At level zero, you have a standard automobile, which requires the driver to make every decision and maneuver. At level five, the car itself makes and carries out all of the decisions without any human intervention. In between, we find cars that can maintain speed and avoid other cars on the highway, cars that can change lanes and make turns unassisted, and cars that can perform automated interventions in crisis situations like potential spin-outs. 

When we discuss Industry 4.0, we often mention the origins of its name, i.e. the concept of the fourth industrial revolution defined by machine-to-machine communication and autonomous processes. With Logistics 4.0, on the other hand, there is typically no such history lesson involved, perhaps because we think of the new logistics paradigm as fundamentally an outgrowth of Industry 4.0. Whether or not that’s the case, it’s becoming increasingly clear that this new era in logistics is very much its own entity—and it’s already changing the way that shippers and freight forwarders (to say nothing of their customers) do business.

This all begs the question, what are the distinct elements that define Logistics 4.0 systems? How do these elements incorporate the logic of Industry 4.0, and how do they build on the logistics paradigms of the past?

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?”

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.

“If you’re not growing, you’re dying.”

While a little hyperbolic, this is an old saying often at the heart of discussion for so many of today’s manufacturing companies when it comes to expansion, increasing their market footprint, and raising their visibility in a very competitive field of play. The expectations and realities for manufacturing companies to create long-term, sustainable growth while at the same time showing signs of robust, short-term success is a delicate balancing act planners and managers are faced with executing at each touch point of the value chain. Because so much of today’s production cycle is connected through the integration and digitization of the supply stream, various process must work in tandem in order to achieve growth opportunities and propel companies into a prosperous future.