The lure of low-cost data storage and cloud computing has enabled organizations to capture and process large volumes of data in a short period of time, finding valuable business insights and achieving end-to-end digitization of the supply chain. Companies are implementing technological changes in crucial logistics functions in supply chain planning, procurement, sales & operational planning, and customer services.

For example, under its “Strategy 2025” plan, Deutsche Post DHL Group is spending around €2 billion on digitalization until 2025, with the investment expected to lead to yearly benefits of at least €1.5 billion by 2025.

In LogisticsIQ’s latest study, “Next-Gen Supply Chain Market – Global Forecast to 2030”, this market is likely to reach $75 billion by 2030, up from $32 billion in 2019. Enablers of the digital supply chain include artificial intelligence, robotics and automation, driverless vehicles and drones, IoT, augmented and virtual reality, 3D printing, cloud computing, big data and predictive analytics, data capture, digital twin, blockchain, 5G connectivity, and wearable and mobile devices.

The major drivers of a digital supply chain include demand for greater visibility and transparency in the data process, faster adoption of IoT, increasing investment in supply chain innovation, and huge demand from e-commerce. Companies embracing this digital revolution are beginning to see the full potential of Supply Chain 4.0, resulting in real-time product visibility, strategic sourcing and optimization, end-to-end visibility, inventory visibility and optimization, real-time manufacturing asset intelligence, micro-fulfillment, efficient last-mile delivery, and dynamic supply and demand synchronization. The proliferation of technologies and opportunities around the digital supply chain means companies need to look seriously at outsourcing these functions. This will be a major shift to new business models, including supply chain as a service (SCaaS).

The age of robots in Logistics 4.0 market

Rising demand in e-commerce has led robots to enter warehouses, sorting centers, and are even being deployed for micro-fulfillment and last-mile delivery purposes. Autonomous mobile robots (AMRs) are now being used in the entire logistics chain, from order intake to customer delivery, resulting in faster order fulfillment, greater order accuracy, reduced damages, and improved labor productivity. Robots are used by large retailers, including Amazon, JD, and Walmart to pack and sort items for warehouse automation. Automated guided vehicles (AGVs) are being deployed in warehouses as autonomous forklifts, carts, and pallet movers.

Recent developments, such as Shopify acquiring 6 River Systems for $450 million, and Teradyne acquiring AutoGuide Mobile Robots ($165 million) and Mobile Industrial Robots ($272 million) are the outcomes behind this disruptive technology in warehouses and logistics. In addition, major mergers & acquisitions such as KUKA (Midea Group) acquiring Swisslog, KION acquiring Dematic and Egemin, Toyota acquiring Vanderlande and Bastian Solutions, have shook up the industry.

Last-mile delivery market (LMD) with delivery robots and drones

Last-mile service has been identified as a key differentiator amongst competitors, from renowned retailers to local businesses. Drones and unmanned ground vehicles (UGVs) are showing up in last-mile delivery workflows. Amazon is testing its Scout delivery robots to deliver packages, and plans to expand it on a larger scale. FedEx collaborated with Pizza Hut to test FedEx’s SameDay Bot for pizza delivery.

We see similar trends from other companies – driverless delivery startup Nuro raised $940 million in financing from Japan’s SoftBank Vision Fund, and has partnered with Kroger to deliver groceries, and with Domino’s to deliver pizzas. KiwiBot and Starship Technologies are providing delivery services on college campuses.

Drones as an enabler in logistics

Companies such as DHL and Amazon are testing drones for last-mile delivery. DHL has tested its Parcelcopter, a Microdrones md4-1000 UAV to deliver a package. Boeing has come up with an unmanned electric vertical-takeoff-and-landing (VTOL) cargo air vehicle that could deliver up to 227 kg of cargo within a 15 to 30 km radius.

In June 2019, Amazon unveiled the latest version of its Prime Air delivery drone, aimed to deliver packages up to five pounds in 30 minutes. Drones are expected to have a major impact on the supply chain, not just for deliveries but within warehouses. In the future, drones could be the best way to track inventory anonymously, and an even be used to move items quickly. Walmart has tested warehouse drones to catalog and manage inventory. PINC started developing PINC Air indoor inventory technology in 2014, based on its outdoor technology that tracks inventory in equipment and storage yards. DroneScan provides two solutions to scan products and pallets in warehouses.

Artificial intelligence and supply chain

AI is being used to address key challenges, such as constant change in processes, shorter product life cycles, and increased demand uncertainty. It does this by analyzing complex data in order to forecast future demand. AI is already being deployed in supply chain planning and optimization, including demand forecasting, inventory management, warehouse management, and fleet management.

Additional trends to watch

Beyond the scope of automation, robotics, AI and drones, several other trends are shaping the supply chain 4.0 future. Technologies such as blockchain, digital twin, IoT, 5G wireless, micro-fulfillment, and 3D printing will all play a part for many supply chain and logistics operations.

All of these are covered in the LogisticsIQ “Next-Gen Supply Chain Market” report, which covers key segments:

• By technology (AI, IoT, blockchain, augmented reality, robotics and automation, cloud computing, cybersecurity, digital twin, driverless vehicles and drones, 3D printing, and wearable and mobile devices)
• By software solutions (supply chain planning, transport management system, warehouse management system, manufacturing resource planning, manufacturing execution systems)
• By functions (transportation, warehousing, procurement & sourcing, product planning)
• By services (managed or professional)
• By applications (design process optimization, product optimization, planning and inventory management, risk analysis, operational efficiency, logistics management, sales optimization, aftermarket sales and service)
• By organization size (small and midsize enterprises, large enterprises)
• By end-user industry (automotive, manufacturing, retail and e-commerce, healthcare and pharmaceuticals, consumer packaged goods, food and beverage, government, energy and utilities, and third-party logistics)
• By geography (North America, Europe, Asia Pacific, Middle East and Africa, and Latin America)

For more details on the report, click here.