What’s so special about logistics (and future tech)?

The third Handelsblatt report we’re summarizing for you examines future technologies for logistics — a field that could benefit greatly from digitization. The report uses data from a survey of 3,575 corporate decision-makers in 10 European countries. Find out which technologies are already moving the needle and where decision makers think things are headed. [by Matt Bulow]

Recent supply chain crises have underscored just how crucial the discipline of logistics is for the global economy. Countless businesses rely on being able to move and keep track of production inputs and finished goods. Future tech promises improvements in all these areas and more. Which technologies are already making a difference, and what will the future hold?

Tracking the Progress of Logistics 4.0

If the future of logistics were a parcel, how close would it be to its destination?

Only a third of decision makers in Denmark, Germany, France, Italy, the Netherlands, Norway, Poland, Sweden, Spain, and the United Kingdom have even gotten started with implementation. Many lack a formal strategy.

It seems companies are still “preparing for shipment” or, in the best case, have progressed to “carrier picked up.”

• Only 15% have made solid progress so far
• 43% have no strategy to digitize their logistics
• An additional 18% have already begun the digitization process

The survey shows larger firms are more likely to have a strategy or have already moved on to execution. In general, the impression is that digitization has yet to take off. Yet, when asked to what percentage their company has already digitized production, it appears that some progress has in fact already been made.

The “How” of Going Digital

There are many paths to implementing digital technologies for logistics. The most common approaches when it comes to logistics are the following.

• Cooperation with customers and/or suppliers (44 percent)
• In-house development (41 percent)
• Use of specialized IT service providers (39 percent)

A significant number also cooperate with research institutions (23 percent). Very large companies (10,000 or more employees) were more likely to report reliance on service providers. In an interesting regional twist, German companies were more likely to rely on specialist vendors while Danish firms preferred to develop solutions in house.

Any Investment Involves Risk

Nearly one third (31 percent) of surveyed corporate decision-makers see depending on specialized third-party IT providers as a risk factor. The concern is, once the tech has been implemented, their business might become dependent on the service provider.

Even more fear the cost associated with information silos that result when logistics solutions cannot communicate with legacy systems that lack the necessary interfaces.

Data security is also a concern with digital logistics solutions.

Which Tech Is Expected to Power Logistics

In general, many technologies are perceived as “rather important” for the future. Regional differences however do appear in the study results. Italy, Poland, and Spain see greater relevance for digital logistics technologies, with the United Kingdom, Sweden, and Denmark expressing greater skepticism.

You’ve Got to See It to Believe It?

Some technologies such as AR, MR and VR are (still) considered somewhat less relevant than others. Why is this true, despite obvious potential applications such as picking solutions that make use of smart glasses or head-mounted displays? It could simply boil down to a lack of awareness of available solutions.

Supporting this hypothesis is the correlation between current or planned use and estimated relevance among responding companies. Perhaps once a company has begun implementing these solutions, the relevance becomes more apparent. Or, once the relevance has been recognized, implementation follows?

Why All Companies Should Be Digitizing Their Logistics

At 83 percent, an overwhelming majority of surveyed companies in Europe see digital technology in their logistics as a way to increase efficiency.

But the benefits don’t stop there. The decision-makers also mentioned:

• Improved quality
• Better service level
• Lower costs
• More reliable supply chains
• Enhanced ability to deliver to customers

In addition to these economically motivated benefits, corporate social responsibility and other factors also play a role:

• Reduced CO2 emissions
• Reduced inventory
• Greater transparency
• Higher employee satisfaction

Expand Your Reality

Packaging, handling, warehousing, transport, delivery, maintenance, and other processes depend on decisions made by human beings. Digital technology can help warehouse staff carry out these procedures. AR applications can, for instance, do the following:

• Distribute the workload more effectively
• Facilitate decision-making
• Make routine tasks less tedious

Vision picking with smart glasses, for example, lets warehouse staff work with both hands. Pickers are some of the most important workers in intralogistics and this tech shows digital information that helps them locate items more quickly.

And yet, not all companies are currently convinced of the business potential. Some available tools may not be advanced enough or require too much external consultation. For others, awareness may simply be lacking.

In either case, companies that can find and implement appropriate solutions may obtain a competitive advantage. Especially if they can procure technology from vendors that make implementation fast and easy—without large capital expenditures.

Additional benefits that decision makers attribute to AR include

• Improved efficiency
• Error minimization
• Making work easier for employees