The Impact of Industry 4.0 on Logistics today

The Internet and a change in consumer behavior, demands a higher supply chain velocity. This has a direct result on the logistics and warehouse industry. Not only must products be available but also the deliveries must be fast, while still saving costs and managing the increased logistics volumes. This is due to the rising importance of e-commerce, service and just-in -time production, as well as customization. There are many opportunities in the logistics industry that are transforming the current market from a traditional business to digital logistics.

But, what areas of logistics can be digitalized?

On the one hand, the logistics during production and in the warehouse can be the subject of digitalization. In this case we speak of intralogistics, which is the transportation of materials within a company. On the other hand, the digitalization of the distribution logistics that transports the goods over a larger distance can take place.

Intralogistics

Intralogistics describes the material flow between the different logistics hubs and along the value chain. The traditional intralogistics system comprises of fork lifters, small cranes, lifting devices and pallet trucks - all operated by people.

When digitalized, the intralogistics of a company could look slightly different. The use of service robots who can identify containers, material and its location and then transport it to the correct location or machine in the company, will become more and more prominent. Even in airports, this technology can be used to transport the baggage or cargo to the right terminal and baggage collection area. Furthermore, through artificial intelligence, the service robots can be programmed to adapt to their environment in real time and flexibly move around the factory, even if changes to the layout have been made or if a worker walks past.

Today, companies are also starting to digitalize more heavy machinery such as fork lifters in order to also transport larger loads. For this, excellent and secure software is developed, to navigate through the site and to pick up and deliver the crates to the right place.

Employees can use data glasses, to gather information, improve the security and access real time data fast, to react to changes.

Distribution logistics

The last step in the production of goods is the delivery to the customer. The type and time of delivery of goods has already changed considerably in the last few years and customers now want fast, flexible and on-time delivery. These requirements have already been taken up by DHL, as they allow the customer to determine the desired delivery date and track their packages.

A future addition, which has already been publicly discussed, is the usage of drones for the delivery of light, urgent and valuable goods. The advantage of using drones are the short delivery times and a positive contribution to the improvement of congestion and smog reduction. In addition, particularly urgent products such as anti-toxins, vaccines or replacement tools can reach the recipient more quickly. However, there are currently still considerable legal and regulatory obstacles that make commercial usage of drones impossible.

Semiautomated self-driving trucks, such as by Mercedes Benz, show what will be possible in the future for long-distance transport. On the motorways, the truck can drive without the steering of a driver at a speed of 85 km/h on the right-hand lane. The driver must be present in the cabin for safety, however, they can carry out other activities such as preparing for the next trip, making video calls or checking the condition of the cargo. The truck is controlled by sensors that detect the environment. When leaving the motorway, however, the driver must steer the truck alone again.

There is another technology in local transport that can be used especially in urban traffic. CargoCaps are small transport vehicles that can deliver goods underground from the outskirts to the cities or directly to the production site. The caps drive electrically along a tube network and can transport two to three pallets. This way they are not affected by traffic jams and are environmentally friendly. However, the logistical underground network still must be built and setup.

What are the benefits and risks?

Firstly, costs can be reduced. This is due to less resources that are required on site and more efficient processes. However, the software can be expensive. The license can be acquired from a software company and only has a minor impact on the costs. Maintenance, cost of the machines stays more or less the same and less mistakes are made, due to automated processes, real-time data exchange and fulfillment checks.

Secondly the logistics processes can become more efficient, as the software navigates the medium of transportation to the dedicated destination on the most effective route. Furthermore, through the intelligent systems, less mistakes are made. However, this depends on the quality of the combination of software and hardware.

Also, through the automated and more efficient material flow, delivery times and just-in-time demands can be met. This leads to higher customer satisfaction, which companies strive for.

Some risks on the other hand are the high dependence on the software. Therefore, it must have an excellent availability rate, conformity and high-quality data processing ability.

The future of logistics is now, as more and more companies are changing their business models in the delivery service industry and more research and development is being made in this field. Soon we will be accompanied by self-driving trucks on the motorway, robots dashing through the corridors with materials for the machines to process and maybe even be overflown by a drone delivering a package to a customer. The digitalization brings many opportunities that only time will prove to be profitable and supportive of our everyday life.

 

Sources:

 

BVL: 15 Trends beeinflussen Strategie und Praxis in der Logistik;
www.bvl.de/thema/trends-und-strategien-2017,
retrieved 08/15/2018

 

CargoCap GmbH (Hrsg.) Was ist CargoCap?
www.cargocap.de/content/was-ist-cargocap;
retrieved 11/26/2017

 

Detecton International GmbH (Hrsg.): Einsatz einer Industrie 4.0- Lösung in der Beschaffungslogistik,
www.detecon.com/sites/default/files/dmr_digital_pulse_indutrie_4_0_01_2016_d.pdf;
retrieved 11/22/2017

 

Gilmore, Dan: The new era of digital logistics,
www.supplychainmarket.com/doc/the-new-era-of-digital-logistics-0001,
retrieved 08/06/2018

 

Janke, Christian: Was Drohnen in der Logistik leisten können,
www.tagesspiegel.de/themen/debatte-zum-welthandel/welthandel-ttip-was-drohnen-in-der-logistik-leisten-koennten/12760846.html,
retrieved 11/26/2017

 

Mercedes- Benz (Hrsg.): Selbstständig unterwegs: Der Fern- LKW der Zukunft,
www.mercedes-benz.com/de/mercedes-benz/innovation/selbststaendig-unterwegs-der-fern-lkw-der-zukunft/,
retrieved 11/26/2017

 

Poll, Dietmar: Industrie 4.0: Das Lager, das sich selbst auffüllt,
www.produktion.de/trends-innovationen/industrie-4-0-das-lager-das-sich-selbst-auffuellt-297.html,