Created as a response to war-time emergencies, Logistics is a field of business that has grown at breakneck speed to affect almost every aspect of daily life. From the source that ships your coffee beans and the route it takes to arrive at your local Starbucks – to the facility that houses the fabric that makes the shirt on your back (and it’s subsequent arrival at your local Old Navy) – the process isn’t a small or simple one.
According to the Council of Supply Chain Management Professionals, logistics is “the process of planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods including services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements and includes inbound, outbound, internal, and external movements.” In other words, logistics transports goods from raw material to finished goods in the quickest and most cost effective way. It’s how we get our Target packages on time and how those delicious fries end up in our McDonalds bags (and now I’m hungry and want to shop online). Link here.
So where am I going with this? Well, a lot of our clients are in the complex world of logistics (and if you’re not, this is still an interesting read) and we wanted to see what was in store for the coming year.
1. Digitization and Technological Transformations
Digitization of logistical needs is the process of using the latest and greatest technology solutions along with physical assets to manage the inventory better. This improves the speed and ever changing dynamic of supply chain and logistics management. In digitizing operations, all organizations are using what is called the “Internet of Things” or IoT, for short. The IoT refers to a system of interrelated computing devices allowing transfer of data over networks without human input. It helps companies monitor inventory, manage warehouse stock, optimize fleet routes, and reduce dead mileage. In basic terms: it allows multiple devices connected to each other to collect and share data without the use of an employee.
2. Knowledge Work Goes Global
According to Wikipedia, “Knowledge workers are workers whose main capital is knowledge. Examples include programmers, physicians, pharmacists, architects, engineers, scientists, design thinkers, public accountants, lawyers, and academics, and any other white-collar workers, whose line of work requires the one to “think for a living”. In this industry, knowledge workers are those that provide complex analytics, detailed processing, and solve logistical nightmares. This will go beyond just what we see in the United States and will allow companies headquartered around the world to have warehouses, procurement centers, and analytic databases in different parts of the world. It will be more than just “who’s available locally” and companies will outsource and search for foreign based knowledge workers.
3. Circular Supply Chains
Rather than good just going from raw materials to finished product, circular supply chains allow products and materials to flow in loops – which minimizes waste and maximizes the utilization of goods. Economic losses become less and this model creates opportunities for job growth and sparks environmental waste reduction efforts. Not every realm of logistics and supply chain management will be able to use the circular model, but it’s worth a look to see if it’s a possibility.
4. Use of Inventory Management Systems
The use of an IMS supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale. A key function of inventory management is to keep a detailed record of each new or returned product as it enters or leaves a warehouse or point of sale. And on top of this IMS component is to have it cloud based in real time. A good IMS can also minimize lead times by restricting inventory movement and enhances the reliability of inventory records. It’s the little thing that pops up on your Amazon purchase that says, “Order now, only 2 more left!”
The buzzword in most Logistic conversations being held is “Blockchain.” ResearchGate says this: “Blockchain is an emergent technology concept that enables the decentralized and immutable storage of verified data. All members keep their local copy of the ledger. It is verified because the members sign the transactions using public-private-key cryptography before sharing them with the network.” Forbes magazine wrote an article earlier this year on how Blockchain will transform the logistics industry. Drilled down, blockchain is a distributed digital ledger that allows the transfer of funds anywhere in the world without the use of a traditional bank. These ledgers cannot be tampered with either. They enable foolproof deliveries and returns by mapping the unique blockchain numbers. This type of technology is extremely convenient for the globalization of this type of industry. The best example of a blockchain? Bitcoin.
What do these trends mean for our contingent workforce? Logistics companies will be looking for employees that have specific experience using different types of technology and are seeking careers in the logistics field. It also means a different type of recruiting process and providing a “hands on” training program to create a workforce that not only enjoys the field of logistics, but also shows commitment in the long-term employee.
From everyone that I’ve talked with to the dozens of articles that I’ve read – the trends all boil down to technological advances that allow us as consumers to get our products that we want (and need!) more efficiently, with better privatization of personal information, and at the very best price possible.