The above example was very common in food delivery, one of the most widespread logistics service in our daily life, before delivery apps became popular. Now that delivery apps have gained momentum, when a customer places an order, not only is the receipt status and estimated delivery time delivered to the customer in real time; some restaurants also allow customers to check the entire process through the app, including the cooking status, whether the delivery has started, the current location of the delivery rider, and whether the delivery has been completed.
Securing 'visibility' in the field of daily logistics, which takes place within 20 minutes or 90 minutes, increases transparency and trust between customers and restaurants. Furthermore, it improves customer satisfaction and reduces uncertainty and C/S, creating a win-win situation for everyone.
[Example of app that allows customers to check the entire logistics process] (Source: Yogiyo app)
In a global supply chain with many new players, more complex processes, and more unexpected political, economic, and social variables emerging every day, visibility helps logistics companies and all other players respond to these variables and make quicker decisions. Especially for logistics companies, which play a key role in securing seamless movement of goods and services, visibility is becoming an important key to success in the modern logistics environment. Efforts to Secure Logistics Visibility The need for improved visibility in the global supply chain is nothing new. According to a 2018 Statista survey of global supply chain executives, visibility is the top challenge in the logistics market. Visibility jumped from 12% in 2017 to 21.1% in 2018 as the top challenge in the supply chain.
[What is the biggest challenge in the supply chain?] (Source: statista)
In response to these demands, major logistics companies have been applying new technologies – first barcodes, RFID, and GPS, and more recently, Internet of Things (IoT), blockchain, artificial intelligence (AI), and big data - to improve the visibility that is at the heart of modern supply chain management. Here are some of the technologies that have been actively applied in the field. Internet of Things (IoT) Technology IoT technology is considered essential for improving visibility in the logistics industry. By collecting and transmitting location, status, and environmental data in real time by attaching to trucks, pallets, containers, and anything else needed for logistics activities, all players can easily monitor, track, and manage logistics activities. For example, logistics companies can attach IoT tags to products, trucks, etc. to monitor location, speed, mileage, etc. as well as information such as fuel consumption, driving routes, and performance data. Warehouses can also utilize IoT sensors to monitor the real-time location, status, and quantity of products, and IoT tags attached to equipment in the warehouse can be used to enable efficient workflow. In addition, IoT sensors can be used to detect potentially dangerous situations in real time, such as fire detection, intrusion detection, and theft prevention.
Especially in the case of cold chain products that are sensitive to the external environment, IoT technology can monitor the temperature, humidity, etc. of all processes from production, warehousing to the moment the product arrives at the customer, in order to check for any abnormalities.
Big Data and AI Large amounts of data is generated within the tightly connected global supply chains. Those data are being collected, analyzed, and used to increase visibility.
For example, historical sales data, market trends, weather information, and other factors can be used to predict inventory of a particular product or demand in a region. By combining data from IoT sensors and GPS tracking with data on road conditions, traffic, and demand, it is possible to analyze and predict various data in real time, such as predicting travel times, calculating optimal transportation routes, and redeploying vehicles to minimize transportation costs and time. In addition, big data and artificial intelligence (AI) can be used to predict when logistics equipment and vehicles need to be maintained and relocated, and to increase responsiveness to unexpected events such as breakdowns.
Cloud-based System Before cloud-based systems were built, it was difficult for logistics companies to share their data and visibility with shippers, carriers, and others. A cloud-based system not only reliably stores the data and visibility of logistics companies, but also allows all players, including shippers and carriers, to view all data and visibility in real time, share tasks, and make quick decisions.
In addition, major cloud service providers have established robust systems for data security, enabling logistics companies to minimize the risk of data loss, corruption, and tampering, increasing trust in logistics visibility. In addition, based on the flexibility and scalability of the service, it is possible to customize the service to all players, including various devices, operating systems, and applications.
Logistics companies are applying these technologies in the real world to create a variety of systems, which improves their logistics visibility. Transport Management System (TMS) Transportation management system (TMS) is the most commonly utilized visibility tool in the logistics industry. Not all companies need to build their own TMS to improve logistics visibility. Applications provided by logistics companies allow players to plan, execute, and monitor transportation activities, including cargo loading and tracking, fleet management, route optimization, and carrier selection, with a system that streamlines transportation operations, while increasing efficiency and reducing costs.
[Cello Square’s map-based international transportation tracking] (Source: Cello Square)
Warehouse Management System (WMS) Warehouse management system (WMS) is a system that manages the entire process of goods from the moment they enter a warehouse or fulfillment center until they are taken out. In recent years, the demand for fulfillment has increased due to the explosive growth of e-commerce, and the need for visibility to respond in real time has become even more important.
WMS can improve logistics visibility by identifying real-time inventory, managing incoming and outgoing shipments, and optimizing storage space to streamline operations, while increasing warehouse worker productivity and customer satisfaction.
[Cello Square’s fulfillment inbound management] (Source: Cello Square)
In the logistics industry, visibility into the "end-to-end supply chain" requires a seamless connection between transportation management systems (TMS), warehouse management systems (WMS), and enterprise resource planning (ERP). How logistics visibility impacts customers and consumers Improving logistics visibility has a positive impact not only on logistics companies, but also on shippers and other players in the supply chain. For shippers in particular, having an accurate view of their inventory can reduce costs by reducing excess inventory and speeding up inventory cycle. They can also reduce transportation costs and maximize efficiency through real-time route monitoring and optimization.
Logistics visibility can also improve customer service. By communicating and notifying customers about the status of their product's transportation, they can adjust their schedules to accommodate the arrival time of the product and prepare for any necessary actions in advance. With logistics visibility, companies can also respond quickly to issues in transit and enhance trust by informing customers of the exact cause of any damage to the product they receive.
Logistics visibility also enables shippers to collaborate seamlessly by sharing data with all players to prevent information discrepancies. If an issue does arise, all information is shared so that trust can be built to resolve the issue and plan for the future. In addition, weather events, peak demand periods, etc. can be forecasted and discussed together to create a plan to reduce costs and improve customer service. In addition, logistics visibility is essential for shippers because it prevents unexpected disruptions and reduces maintenance costs.
These changes can transform the global supply chains that most shippers have built to date. With the advent of the free trade era, companies have focused on building global supply chains with division of labor to achieve maximum efficiency at minimum cost, by adopting the Just In Time (JIT) approach.
(Source: Getty Images)
JIT is a method of producing and supplying the required products with minimal inventory based on demand forecasts. It has the advantage of increasing production flexibility and reducing inventory costs. However, it is vulnerable to uncertainties such as the Covid-19 pandemic and the Russia-Ukraine war, which have caused unprecedented shocks to supply chains, including the US-China trade conflict and extreme weather. This has led to production and supply delays that are still occurring in some parts of the world, with devastating consequences in terms of reduced competitiveness as well as lower customer satisfaction and trust.
In response, many organizations are shifting their supply chains from JIT to Just In Case (JIC) based on logistics visibility. JIC is a method of maintaining sufficient inventory to ensure stable production and supply in an uncertain environment. JIC enables high customer service levels to be maintained in the face of unforeseen circumstances, leading to high customer satisfaction and enhanced business confidence. Logistics visibility plays a key role in providing shippers with real-time information, data analysis and forecasting, and risk prediction and response. However, some point out excessive inventory costs, operational inefficiencies, and inventory management inefficiencies as challenges of JIC model.
For this reason, experts believe that combining the advantages of JIT and JIC will be the key to future supply chain management. Logistics visibility is expected to play a key role in building a new supply chain, enabling companies to quickly identify product movement, inventory status, and supply chain status in real time. Shippers, in particular, will be able to make more agile decisions in the face of uncertainty and optimize inventory management and production planning to improve customer satisfaction and competitiveness.
Meanwhile, for consumer who want fast and accurate logistics services at all times, logistics visibility can fulfill their need by providing information transparency. Consumers can know the estimated delivery date and even see exactly where their products are by tracking order status and more. They can also personalize their logistics experience by choosing different shipping options and delivery notifications.
In addition, consumers can choose from a variety of options and products with real-time updated inventory information, which offers them a wider range of choice and convenience. # Reference
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