With the fast-growing and ever-changing market in the supply chain industry, technologies have opened up new methods and lead to new changes to the supply chain sector worldwide. Smart technologies utilizes computers, communication, control, and sensing. Through smart technologies, they convert conventional supply chain to digital supply chain. Many logistics service providers have invested in smart technologies to improve their delivery quality and inventory control. The improvements help companies to gain a competitive edge over competitors who are still on the conventional supply chain. Smart technologies decrease the risk of traffic, reduce energy waste, improve traffic congestion and air quality. It does not only improve the productivity of the logistics service providers sector, but it also improves the quality of customers satisfaction. This article discusses the application of smart technologies that will bring about a digital supply chain.
Internet of Thing (IoT) Technology
IoT and smart gadgets are becoming ever more essential for use in the shipping industry worldwide in this era. IoT involves the use of gadgets that are embedded with software, sensors, and other technologies connecting to the internet and exchange data wirelessly. IoT gadgets help supply chain to handle shipment in a smarter way as it allows the monitoring of the environment, provides real-time goods movement and reports the real-time status of the shipments. Based on the real success story by Digiteum, New Maersk Line invested in new technology for managing their containers using the remote container management system. They are able to rely on this system to implement and improve the shipping planning as it allows them to monitor the container temperature and moisture. By monitoring the container’s temperature and moisture, it prevents the risk of food spoilage and resource waste. Another real success story is the case of the utilization of IoT devices in supply chain operation by Amazon. Amazon integrated their supply chain operations with robots for warehouse operations, which gives room for their employees to focus on other tasks like packing, wrapping, and inventory management.
Artificial Intelligence (AI) Technology
AI is a concept that revolves around the use of computer algorithms and methods that allows the machine to perform functions beyond the capabilities of what human can usually do. With AI and machine learning, robots are able to perform warehouse tasks such as placing goods into the correct rack after collection from the port and tracking stock inventory levels to prevent out-of-stock situations, laborious tasks that used to be done by humans. Staff can then be delegated to focus on more important tasks such as forecast planning, based on the data analysis obtained from the machines. Furthermore, machine learning algorithms can be used to estimate fuel consumption for a vessel. These algorithms can transform the data from onshore sources and link it to how much fuel is needed for vessels. In the long run, supply chain companies can reduce operating costs, lower risks of accidents and waste of energy, as well as improve the monitor of air quality through the use of AI.
Blockchain technology, or sometimes known as Distributed Ledger Technology (DLT) is a game-changer technology that utilizes the use of decentralization and cryptographic hashing, which results in a decentralized distribution chain that gives everyone access to documents at the same time. Hence, it reduces the number of intermediaries to a large extent and eliminates potential data errors as well as delivery delays. The transparency ledger of changes also preserves the integrity of documents and hence, leads to trust and accuracy in the asset. For example, a retailer is able to check if their products are in good condition or damaged, as well as shipping status such as packaging and shipment through the blockchain platform. Blockchain technology allows each shipment tracking, estimation of the delivery time for different routes, and a more accurate calculation of shipment costs, which leads to risk reduction, fraud elimination and brings transparency even when used in a myriad of ways. This overall leads to operational costs reduction and thus widens the profit margin for companies that uses blockchain technology, while at the same time improving the quality of the whole supply chain system.
Radio-Frequency Identification (RFID) Technology
RFID technology may appear to be costly, but it has the potential to be a cost-saving technology for the supply chain in the long term. RFID technology transfers data wirelessly through radio frequency waves. The two main components in RFID are tags and readers. Inventory management is an important element in the supply chain. RFID technology resolves some of the major issues such as collecting, managing and analyzing the sum of data, maintain low manpower costs, etc. For example, stock taking is a time-consuming task, but it can be sped up with the use of RFID-based solutions. The RFID tag does not need to be scanned directly by the RFID reader, as long the reader is active and the tag is passive and both are within a certain range, information will be transmitted back to the reader. Such an automated process will increase the accuracy and speed of inventory checks which usually take a much longer time to complete if performed manually.
Unmanned Aerial Vehicles (UAVs)
UAVs are referred to as drones most of the time. It is a flying object without an onboard human pilot. UAVs are able to communicate with human operators or autonomous computers and operate remotely. UAVs operates with stored battery with the combination of CCTV through computer vision, artificial intelligence (AI) and object avoidance (LiDAR) technology. The supply chain industry has increased the usage of UAVs recently especially major supply chain players such as FedEx, DHL, and UPS. Delivery by UAVs is able to reduce the operating and maintenance cost and also increase the number of trips for delivery. According to a case study by Global Infrastructure Hub in 2020, a drone delivery was tested by Flirtey. They conducted drone deliveries with Domino’s Pizza, 7-Eleven, and medical automatic defibrillators manufacturer in 2020 after receiving approval from the US government. Drone delivery trails were marked as highly reliable for flight by the US. Testing of technologies as drones were operated in 95% of wind and weather conditions.
Autonomous vehicles are referred to as autonomous trucking or electric vehicles (EV), which means vehicles with no human drivers. Many freight companies such as TuSimple started investing in autonomous trucking for overnight driving or long-distance trips to save on high labor costs like insurance and accident liability since this can reduce road accidents as overnight driving is dangerous for humans. Back in May 2021, CNBC reported that TuSimple conducted a test using automated trucks to haul fresh watermelons from Nogales, Arizona to Oklahoma City, which was a total distance of 951 miles. Usually, overnight driving takes over 24 hours to complete a job, however, with automated trucking, it took only 14 hours and 6 minutes to complete the job. It shortened a total of 10 hours of delivery time. To date, TuSimple’s goal is to aim for all the manual drive truck deliveries to be fully operated by automated trucks by the end of 2024.
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