Who will win the logistics battle?
Which company will survive the competition of delivering goods from A to B? The delivery experience is the thing that makes a difference today – so who is smart enough to manage their processes perfectly?
Today’s question is: “Who will win the logistics battle?” I recently spoke at the Postal Innovation Platform (PIP) during the Universal Postal Union (UPU) congress in Istanbul. In the opening speech, one of the sponsors asked the very same question but unfortunately it remained unanswered. Only one participant from Alibaba answered it to a certain extent. He claimed the consumer was the winner of the battle, which is more than true; the biggest beneficiary of the disruption will be the consumer.
The consumer won’t just be the beneficiary, however; it will be the consumer who directly declares the winner of the war. Drones and robots, in-car and in-apartment deliveries, and crowd and professional couriers will all be part of the disruption but ultimately they won’t be the winners. It will be the company that puts the consumer at the center of all its processes, and can manage these innovative resources flexibly, that will come out on top.
The logistics of tomorrow requires a completely new concept and business model. Just a few years ago we generally received one package a week or even just one a month, but these days everyone expects several deliveries a day. E-commerce gives consumers the perfect and most flexible shopping experience. It’s convenient to sit at home, flick through online stores and order whatever we like, whenever we like. However, the problem is the tremendous increase in parcels being shipped and the lack of a strategy for seamless and adequate delivery. The critical threshold of shipments that can be received will very soon be reached, leading to a reversal in the convenience that e-commerce brings.
What do I mean by this?
I’m personally already annoyed at being the distribution center for our neighbors. I’ve had enough of parcels arriving when I’m not at home, which then forces me to waste my time and resources picking up the goods from different places. We normally receive packages from four different operators.
One dispatches our parcels to a food store 10 km away when we’re not at home. The second one delivers our parcels to the only kiosk in our neighborhood that doesn’t have any parking facilities. The third tries to deliver three times before taking it to their own shop 6 km in the opposite direction. And the last one usually takes them directly to the store located in the basement of our building – our personal distribution center – however, this, in my opinion, won’t last forever. If the store keeps acting as the distribution center for the entire street without receiving any financial benefit, there will start to be trouble if, for example, they take the package on a Friday, and then close for the entire weekend.
Right now, I see the convenience for consumers and their environment rapidly decreasing, but at the same time there are no logistics operators trying to individualize their supply chain to satisfy the end user – the driver of the market. The consumer choses the online store that offers the best possible shopping experience, which includes deliveries and returns in particular. The online stores have almost all reached a high and mature level of user experience. The delivery experience is the thing that makes a difference today, so who has enough power to drive the market and is smart enough to manage their processes perfectly?
As the shipping rate continues to increase in the next few years, logistics companies will need to become highly flexible in order to personalize the delivery chain of a single product for a single consumer. The winner of the competition will be the company that has a fully consumer-focused supply chain – that’s already clear.
We can all be certain that new and disruptive technologies will evolve and shape the delivery world. Drones will deliver parcels, robots will revolutionize the last mile, start-ups will have access to your trunk or apartment for direct drop-off and autonomous trucks will be the backbone of all supply chains. The new technologies are only solving the symptoms of a problem but not the problem itself. The problem lies in the complexity of supply chains and the increase in shipped goods. Reducing symptoms by swapping people for drones, or shifting deliveries from doors to trunks, are not long-term solutions.
In the near future, parcels need to independently manage their way through the supply chain in order to ensure a fully personalized end delivery at the right place and time. The parcel itself needs to be able to decide, in communication with the recipient, what delivery method it should choose.
New innovations and disruptive technologies will face infrastructural problems and strict regulations. A flying drone will not be able to open front doors and I certainly won’t be remodeling my balcony on the third floor to receive packages. I cannot imagine letting someone enter my apartment when I’m not at home, so in-apartment deliveries will never be an option for me. Many of my friends don’t own cars, which rules out in-trunk deliveries for them.
There isn’t a one-fits-all solution available on the market and there probably never will be, as humans tend to differ from each other. It’s simply not an option to wait for the next big thing that will solve the problems of all logistics companies, and betting on a single technology won’t lead to the battle being won.
Logistics companies need to rethink their processes and make their supply chains fully transparent, linking all technologies together so they can put each consumer at the center of their service. This is what our Company Evertracker is offering. We’re using our intelligent platform and smart sensors to monitor shipped goods throughout the entire value chain. We use our predictive analysis to give clients recommendations about how to react. Our clients can concentrate on their processes and refocus them in order to provide an optimal service to their clients. Our customers’ clients can directly communicate with supply chains and can interact and react to changes.
The most flexible company will know the ropes and use the different technologies accordingly. If the parcel is in direct communication with the recipient and artificial intelligence is able to understand and redirect it to a new place at a new time, wherever the consumer expects it, this company will be the winner of the battle. The winner will have full control over their supply chain.
Artificial intelligence and smart algorithms are the future of logistics
The future of supply chains is not fully developed yet and it will probably take some more time before we feel the disruption of innovative delivery forms, such as robots and drones. It will happen sooner than we can imagine, but it will still take some time. However, the changes will then be tremendous and spectacular.
However, for me the biggest disrupter is artificial intelligence, which can manage and automate all processes. That’s what we’re working on continuously. It will revolutionize processes and personalize supply chains for the consumer. Artificial intelligence will make shopping experiences seamless and enable natural communication between the product and the recipient.
Just imagine you’re expecting the delivery of a squash racket because you’re meeting a friend for a game this evening. Before the package enters its last mile it will ask you if you’re at home or if you would like a new time or place for delivery. You can then request delivery directly to the squash studio. You don’t have to worry about how to get the racket, it will be waiting for you at the place and time you need it
In an ideal world, local retailers and food stores, but also companies, such as Amazon, would use facilities in the district, such as local stores and warehouses. They would all share a fleet of robots, such as Starship, but also enable other delivery forms – drones or couriers – to pick up ordered goods. Sitting at home at night, I could then order some groceries that I’ve forgotten during the day, which will be delivered by a Starship. I might also order pizza from my favorite place, a DVD (yes, I still watch them) and a 6-pack of beers, which will be delivered by courier – from the restaurant, the local Amazon warehouse and the grocery store. At the same time, my wife is out with friends by the river enjoying the evening with some drinks, which will be delivered by a flying drone.
The artificial intelligence won’t only know how to choose the right order of pickups and the best delivery method, it will have already predicted the products needed several days ahead and will have autonomously ordered and stocked the local stores with them.
This implies a very complex and challenging macro to micro managing process along the entire value chain. Artificial intelligence will be able to fully control these processes from consumer to consumer, from ordering a product to the manufacturing of the goods along the supply chain to the receiving process. The artificial intelligence can understand what the consumer will order, where the product must then be shipped to and what delivery method should be chosen. In addition, communication with the parcel can be seamless and natural, which allows consumers to interact with their shipments.
The consumer will decide who is offering the best service and where to buy from. The consumer will therefore both indirectly and directly declare the winner of the battle.
We are living this principle at Evertracker. Our intelligent software and IoT platform makes supply chains fully transparent and enables our clients to automate their processes. Our intelligence predicts future events and identifies patterns.
We believe that a fully transparent and fully automated supply chain will be the key factor for disruption and will enable companies to win the race. We build solutions that maximize our clients’ flexibility, which in return satisfies their customers and opens up new business opportunities.
Our platform increases the quality of distribution networks in real time by focusing on future events. We analyze the past, process the present and predict the future.
Come and see: http://www.evertracker.com
