The #1 Driver of Logistics Innovation is…
Surprised? You shouldn’t be.
The days of having trucks go out and losing sight of where they are, what stock they have, what their status is (on-shift etc.) or if they have arrived to their destination are long gone. On the customer side, consumers will no longer accept a 4 hour time window for when their delivery will arrive, they want real-time tracking via a map on their mobile device.
Increased visibility applies to various aspects of logistics innovation – internal activities such as the supply chain, as well as on the customer side – the experience a customer has during the delivery process.
Innovation is driven by need; as the saying goes “necessity is the mother of invention,” and visibility has been driven by forces in the industry that have caused a shift in paradigm.
Visibility with regards to logistics innovation can be broken down in to two parts:
- Internal – Supply Chain
The “traditional” supply chain models are outdated – they were established at a time when customers may have been OK with waiting longer period of time for their package to arrive. Additionally, with the advent of eCommerce, the volume of deliveries for package and parcel services has increased. In particular, peak times of the year such as Christmas put a huge strain on supply chains.
In order to meet the needs of today’s consumer, supply chains need to be flipped around – they can no longer be purely back office, but need to be more customer centric.
2. External – Last Mile Delivery Experience
The expectation that consumers now have for their experience when waiting and receiving a delivery has been fundamentally changed, and a big driver of that was one company – Uber. Since its launch, the concept of having full visibility over when a product or service is on its way, knowing exactly where it is, being able to track it on your mobile phone through a real-time map, and rating the experience – something that wasn’t even on consumer’s minds a decade ago – is now a solidified expectation.
In the age of Amazon and Uber, the experience a consumer has during the delivery process is just as important as the product or service they are buying. In fact, 86% of consumers are willing to pay more for a faster and more engaging delivery experience.
Innovation around these two activities creates a competitive advantage in an increasingly competitive field. With Amazon starting to own its entire supply chain, with designs on becoming a full fledged shipping company, its incumbent on businesses that deliver such as 3PLs, parcel and package delivery service, and restaurant chains to implement the necessary technologies to retain their positions in the market.
UPS recently proved itself to be the canary in the coal mine – though quite basic, they introduced “Follow My Delivery” which enables customers to track their deliveries on a real-time map. Though it lacks some of the engagement features, such as communicating directly with the driver, leaving messages such as “Don’t ring the doorbell” and ratings, it still indicates that incumbent businesses that deliver are already moving on the innovation needed to stay relevant.
Retailers, package and parcel delivery services, and restaurant chains should take notice.
Visibility is the backbone to the Cargo Carousel System in the Supply and Reverse Chains (internally) and in the Last Mile Delivery Experience (externally). It modernizes traditional supply chains to speed up delivery while absorbing peak season volumes. Its modular design eliminates pallets and plastic wrap in favor of re-usable, sturdy “modules” that are suspended from the Carousel to better absorb shock while minimizing the need for excessive packaging. It also allows double-stacking without crushing merchandise underneath to fully utilize available space on the truck and eases the ability to pool or consolidate smaller shipments heading to the same location.
Its sensor technologies and radio frequency identification combined with GPS and satellite communication capabilities can report not only exact location in real time but also alert on any potential problems with temperature, humidity, light exposure, movement, shock and a host of sensors specifically for perishable items being exposed to O2, CO2 and ethylene all in real time.