Digital logistics: A new era for supply chain management
AI, blockchain, big data, transforming a traditional industry
The logistics industry, though rooted in a traditional cargo haulage model, is at the forefront of digital transformation. As Middle East countries pursue economic diversification and sustainable growth plans, their strategies are focused on digitisation and automation. This asserts significant pressure on the logistics industry to digitise to boost international trade and scale their businesses, observes Amer Darwish, CTO of Posta Plus, a Kuwaiti-based global logistics company.
“Adopting new technologies powered by advanced features will address and reduce management challenges and improve operational efficiency. (Technology) will also have a positive impact on business performance and reduction of cost,” Darwish says.
A range of emerging technologies are especially well suited for the logistics industry. Darwish highlights internet of things (IoT) which can be leveraged to collect data and process information; blockchain to document authentic data rather than using logbooks and spreadsheets; cloud technology for ease of data access; augmented reality (AR) to connect employees in different global locations, and smart speakers for easier and faster access to information using voice commands.
Additionally, the use of eco-friendly and automated ships will have significant implications on the shipping industry, Darwish adds. “For the shipping industry to thrive in this digital age, businesses will have to take advantage of what new technologies offer and therefore transform how trade is performed regardless of the market.”
The online marketplace and globalisation have brought new expectations from consumers who now expect much faster, more reliable and a more efficient delivery experience.
“Some of the technologies influencing the growth of this industry are driven by AI and autonomous logistics, which include use of warehousing robotisation, smart road technology, data analytics, and blockchain. The agility required to cope with those technological trends enforces elasticity within the supply chain,” says Darwish.
“Controlling capacity based on actual demand while maintaining superior customer service at all times is very crucial,” he adds.
In today’s fast-paced world, technology plays a vital role in assuring a more seamless multi-channel experience that is personalised to customers’ needs, says Darwish. “(Technology) improves customer service by speeding up communications, increasing convenience, providing self-serve options and allowing for targeted marketing campaigns.”
The world today operates in real-time, which is why logistics companies must strive to offer immediacy, personalisation and accessibility.
“Emerging trends in technology such as machine learning and artificial intelligence can analyse customer data on positive and negative experiences, leading AI to determine the best next step to improve their experiences. The more AI can learn about customers, the better the business understands the customer journey. Therefore, companies need to have a system in place to leverage all the gathered data and use that data to improve the customer experience while keeping up with their fast-changing needs,” Darwish says.
That said, technology doesn’t mean that the business no longer requires personable customer service representatives to nurture customer relationships, nor is it a shortcut to convenience. On the contrary, technology should make the customer service experience more effective while maintaining valuable one-on-one connections with customers, Darwish asserts.
The GCC is in the middle of some of the most significant technological developments in the industry. Today the GCC supply chain landscape and logistics sector is agile enough to align with global technological trends quickly, observes Darwish.
“The explosion in technology and the combination of human and robotic capabilities within the region’s logistics firms will put GCC logistics companies at an accelerated rate to cope with this change. From the use of artificial intelligence to blockchain and big data, the logistics industry is finding new ways to utilise and apply these technologies into effective and efficient use,” says Darwish.
A digitally savvy consumer base characterises the GCC region. Limited product selection and inconsistent delivery times and service levels have increased the demand for online shopping, with emerging e-commerce players bridging that gap, Darwish observes.
“Accordingly, the highest tier of logistics companies in the region are those that have adopted and adapted their technology to become consumer-centric and competitive in price and unique services,” says Darwish.
Technology offers a unique, competitive edge to emerging markets, allowing them, in some instances to be more agile and innovative than developed economies, Darwish observes. “The world is seeing a surge in transformed business models that leverage technology to boost its market share further. The new wave of digital has become a phenomenon in which those who understand it, earn it, and those who don’t, pay it,” he adds.
Darwish observes that technology is acting as a pivotal disruptor to the traditional ways of doing business, putting less pressure on the company’s resources barrier to entry (capital/people), and acting as a virtual gateway to penetrate markets that are otherwise challenging to launch in physically.
“The growth of social media, for example, has eradicated the geographical and cultural barriers that impeded businesses to reach previously inaccessible customers all over the world and now extends awareness about new companies. Understanding customer data and trends in behaviour have allowed companies to accordingly adapt and refine their products and services to better retain their customers,” he concludes.