Last year, the technology trends in logistics seemed straightforward, and many of our technology predictions came true. The use of the new technologies, ranging from robotics to value-added services within transportation management systems (TMSs) saw greater implementation across supply chains via TMSaas, and widely-held beliefs about the supply chain’s limitations were tested. Technology in logistics grew beyond imagination in 2016, and you need to understand how and why.
The TMS Became More Than What It Was: TMSaaS
Companies using outdated enterprise resource planning (ERP) systems are obsolescent. According to Vijay Ramachandran of Logistics Viewpoints, the Electronic Logging Devices (ELD) mandate, reduced fleet sizes, growing problems within the driver shortage and merging of business and logistics strategies are responsible for this new view on the TMS.
Supply chain partners have become used to the idea of a TMS that gives them options and supports the next generation of computers, explains Talking Points With Adrian Gonzalez. However, predictive analytics and value-added services are being poured into TMS models, and supply chain executives have taken notice. Unfortunately, industry-standard TMS systems are simply not cutting it as more companies look for better ways to improve operations and reduce costs.
It is true; the return on investment for implementing a TMS remained stronger than other systems, but there are some companies that are not seeing returns as high as they would prefer. Consequently, a new breed of TMS systems are emerging, TMS-as-a-Service (TMSaaS). These new systems offer the benefits and returns of TMS systems without the complexities of integration and abandonment of existing systems.
Also, the term, TMS, doesn’t quite describe the capacities of today’s systems, so while companies bought into them, explains Chris Jones of Logistics Viewpoints, they still wanted something more fulfilling, including value-added services like auditing. Ultimately, replacing electronic data exchanges (EDIs) with application program interfaces (APIs) has created the possibilities found in TMSaaS.
The goal remains the same. Save more customers and business-to-business partners money while providing better services than before, monitoring and improving customer service along the way. Meanwhile, the cost of TMSaaS could be cheaper than purchasing a TMS, so more companies are looking at short-term versus long-term returns. Mostly, TMSaaS is poised to sweep the market and steal the proverbial thunder from EDI-exclusive systems.
Autonomous Vehicles and Drone Delivery Became a Reality.
We expected Amazon to make progress with drone delivery, and the ideas of autonomous vehicles (AVs) were promising, but guess what happened in 2016? The ideas took off faster than anyone could have expected.
Google, Uber, Lyft, Tesla and Facebook started testing self-driving cars, and the push was not limited to these companies. Practically every tech giant is headed in the driverless car and truck direction. In fact, Uber recently acquired Otto’s self-driving truck startup, explains José Miguel Fernández Gómez of Advanced Fleet Management Consulting.
With more than 75 percent of consumers accepting delivery from third-parties, including third-party logistics providers (3PLs), the demand in the logistics industry for better self-driving technology has been great. In the prediction, we imagined road-bound trains of trucks carrying more products, reducing environmental pollution and optimizing fuel efficiency, but in 2016, this concept got a name in Australia, “platooning.” According to Charles Edwards, large-scale acceptance of driverless trucks is still far off, but with more companies applying for testing permits, time frames might be accelerating faster than experts predict.
Another side of the coin is drones. In 2015, drones were new and exciting, but still out of reach. But, the FAA lifted its restrictions on drones for commercial use in late August, explains Supply Chain Digest. On December 7, 2016, Amazon officially launched Prime Air, delivering products within 30 minutes of placing an order. These drones are autonomous, meaning they do require a controller at the helm. This is the first private trial of drone delivery by a major logistics operator, so clearly, predictions for the use of AVs and drones are coming true faster than expected.
Multiple Companies Sought to Replace the Deficit Left by Amazon Robotics.
Amazon’s purchase of Kiva Robots seemed like a dream come true in 2012, but it proved only to help Amazon, leaving other logistics providers in the cold. The savings were enormous, cutting the “click to ship” cycle by 75 percent or more, asserts Tom Green of Robotics Business Review. But, the Kiva patent meant that the same designs and software was no longer accessible. Thus, more inventors stepped up to the plate in 2016.
By some accounts, up to 20 robotics companies have launched to fill the void left by Amazon’s purchase of Kiva, but robotics innovations are coming from manufacturers themselves. Per David Edwards of Robotics and Automation News, BMW has even designed and built its type of logistics robot. So, the trend toward robotics in logistics is far from over.
The Big Picture.
The first three logistics technology trends shot a bit too low for the innovations that were made possible in 2016. We expected there to be some improvement, but across the board, our predictions did not go far enough. 2016 saw the advent and authorization of commercial use of drones, driverless cars, the wide-scale creation of robots for the logistics space and changes to how supply chain entities viewed the benefits of TMS systems. Apparently, technology is moving faster than anticipated and the overall returns are more promising than ever.