The digital transformation is in full swing and fundamentally changes how we live, work, and communicate with each other. From retail to finance, many industries see an inflow of new technologies, disruption through innovative platform business models, and employees struggling to cope with the significant shifts occurring. This Fourth Industrial Revolution is predicted to also transform Logistics and Supply Chain Management, with delivery systems becoming automated, smart networks created everywhere, and data being collected and analyzed universally. The Digital Transformation of Logistics: Demystifying Impacts of the Fourth Industrial Revolution provides a holistic overview of this vital subject clouded by buzz, hype, and misinformation.
The book is divided into three themed-sections:
- Technologies such as self-driving cars or virtual reality are not only electrifying science fiction lovers anymore, but are also increasingly presented as cure-all remedies to supply chain challenges. In The Digital Transformation of Logistics: Demystifying Impacts of the Fourth Industrial Revolution, the authors peel back the layers of excitement that have grown around new technologies such as the Internet of Things (IoT), 3D printing, Robotic Process Automation (RPA), Blockchain or Cloud computing, and show use cases that give a glimpse about the fascinating future we can expect.
- Platforms that allow businesses to centrally acquire and manage their logistics services disrupt an industry that has been relationship-based for centuries. The authors discuss smart contracts, which are one of the most exciting applications of Blockchain, Software as a Service (SaaS) offerings for freight procurement, where numerous data sources can be integrated and decision-making processes automated, and marine terminal operating systems as an integral node for shipments. In The Digital Transformation of Logistics: Demystifying Impacts of the Fourth Industrial Revolution, insights are shared into the cold chain industry where companies respond to increasing quality demands, and how European governments are innovatively responding to challenges of cross-border eCommerce.
- People are a vital element of the digital transformation and must be on board to drive change. The Digital Transformation of Logistics: Demystifying Impacts of the Fourth Industrial Revolution explains how executives can create sustainable impact and how competencies can be managed in the digital age - especially for sales executives who require urgent upskilling to remain relevant. Best practices are shared for organizational culture change, drawing on studies among senior leaders from the US, Singapore, Thailand, and Australia, and for managing strategic alliances with logistics service providers to offset risks and create cross-functional, cross-company transparency.
The Digital Transformation of Logistics: Demystifying Impacts of the Fourth Industrial Revolution provides realistic insights, a ready-to-use knowledge base, and a working vocabulary about current activities and emerging trends of the Logistics industry. Intended readers are supply chain professionals working for manufacturing, trading, and freight forwarding companies as well as students and all interested parties.
Table of Contents
List of Contributors xix
Author Biographies xxi
Foreword xxix
Acknowledgments xxxiii
A Note from the Series Editor xxxv
Section I Introduction 1
1 Demystifying the Impacts of the Fourth Industrial Revolution on Logistics: An Introduction 3
Mac Sullivan
Introduction 3
Future of Work in the Fourth Industrial Revolution 3
The Role of Digital Transformation 4
Hub Economy Companies Leading the Way 5
Current State of the Logistics Industry 5
Effects of the Second and Third Industrial Revolutions on Logistics 5
Technology Is Easy; But People Are Hard 6
The Role of Startups in the Logistics Community 6
Logistics Companies Under Pressure 7
Technology Investments by Logistics on the Rise 7
New Entrants Threaten Status Quo 8
Disintermediation Threat Looming 8
Navigating a Digital Transformation 9
Budget Considerations for Technological Upgrades 9
Lessons Learned from Other B2B Industries 10
Automation Leading in Terms of Return on Investment 10
Winners and Losers of a Digital Transformation 11
The Necessity of Economies of Scale 11
Foundations of a Digital Transformation 12
Prioritization of Technology Exploration 12
Connectivity Standardization in Logistics 12
New Business Models Emerging 13
Participation in Platforms and Marketplaces 14
Zoom Out/Zoom In Approach 14
The Time Is Now 15
Conclusion 16
Key Takeaways 17
References 17
Section II Technologies 21
2 Technologies Driving Digital Transformation 23
Mac Sullivan
References 25
3 Logistics Management in an IoT World 27
Axel Neher
Introduction 27
Logistics Management in an IoT World 29
Get Connected 29
Criteria for Defining the Right Things 30
Sensors and Identification 30
Means of Connection 31
Triggers 31
Standards 31
Security 32
Get Decisions 33
Get Prepared 34
Data Quality 34
Organization 35
Skills 35
Ecosystem 36
Conclusion 36
Key Takeaways 38
References 39
4 Additive Manufacturing: Shaping the Supply Chain Revolution? 41
Johannes Kern
Introduction 41
AM Supply Chain 42
Evaluation 43
Advantages 43
Bottlenecks 44
Technologies and Materials 46
Technologies 46
Materials 47
Application Scenarios 50
Market and Trends 51
Market 51
Trends 52
Conclusion 53
Key Takeaways 55
References 55
5 The Role of Robotic Process Automation (RPA) in Logistics 61
Mac Sullivan, Walter Simpson, and Wesley Li
Introduction 61
Companies Under Pressure 61
RPA as a Solution 62
Evaluating Heavyweight IT to Lightweight IT Automation 62
Achieving Operational Excellence 63
Process Improvement on the Rise 63
Outsourcing Versus Automation 64
Center of Excellence as a Leader of RPA 64
RPA: Hype or Realistic Solution 65
The Facts 65
Rote, Repetitive Tasks Ripe for Automation 65
Process Considerations of Implementing RPA 66
Motivating Example: Konica Minolta Using RPA 67
Konica Minolta’s RPA Roadmap 68
Use Cases for RPA in Logistics 70
Track and Trace 70
RPA Adoption at DHL 71
Navigating Your RPA Journey 71
Who Should Own This RPA Journey? 71
Process Mining and Process Mapping 72
Choosing the Right RPA Provider 72
Change Management Considerations 73
RPA Implementation Announcement 73
Liberated Knowledge Workers 74
Interacting with RPA 74
Training the Bot 74
Next Evolution of RPA Training 75
Conclusion 75
Key Takeaways 76
References 76
6 Blockchain Will Animate Tomorrow’s Integrated Global Logistics Systems 79
Nicholas Krapels
Introduction 79
The Origins of Blockchain Technology 81
The Potential of Blockchain Technology 84
Revolution via Protocol 84
Essential Properties of Blockchain 85
Blockchain Applications in Logistics 88
Public Blockchain Applications in Logistics 88
Private Blockchain Applications in Logistics 89
Conclusion 92
From Trusted Actors to Trustless Networks 92
Key Takeaways 94
References 94
7 Digitalization Solutions in the Competitive CEP Industry - Experiences from a Global Player in China 97
Scott Wang and Johannes Kern
Introduction 97
Challenges in Key Logistics Segments 97
Digitalization Solutions Today 98
E-Commerce in China and Its CEP Market 100
A New Competitive Environment 101
Digitalization Solutions of the Future 102
Internet of Things (IoT) 102
Artificial Intelligence (AI) 103
Blockchain 104
Case Study: Enhanced Address Translation Through AI 106
Conclusion 109
Key Takeaways 109
Acknowledgements 110
References 110
8 Understanding the Impacts of Autonomous Vehicles in Logistics 113
Lionel Willems
Introduction 113
Evolution of AGVs 114
Intelligent Logistics 116
The Automation of Indoor Transport Systems 116
Opportunities for AGVs 117
Challenges of Adopting AGVs 118
The Automation of Outdoor Transport Systems 119
History of the Automation of Outdoor Transport Systems 119
Opportunities and Challenges in Logistics 120
Drones and Their Use in Logistics 122
Conclusion 124
Key Takeaways 124
References 125
9 Logistics in the Cloud-Powered Workplace 129
John Berry
The Cloud Revolution 129
Growing Dominance of Cloud Computing 130
Infrastructure as a Service (IaaS) 130
Platform as a Service (PaaS) 131
Software as a Service (SaaS) 132
Enabling New Business Models 132
How Software Drives Logistics 133
Warehouse Management Systems (WMS) 134
Transportation Management Systems (TMS) 134
Shortcomings of Conventional Logistics Software 135
Complexity 135
Difficult Data Integration 135
The Impact of SaaS on Logistics 136
A New Technology Delivery Model 136
SaaS Warehouse Management Systems 137
SaaS Transportation Management Systems 138
APIs 138
SaaS-Enabled Value Creation 139
Automation 139
Integration 141
Analytics and Artificial Intelligence 141
Conclusion 142
Key Takeaways 143
References 143
Section III Platforms 147
10 Platforms Enabling Digital Transformation 149
Mac Sullivan
References 151
11 The Digital Transformation of Freight Forwarders: Key Trends in the Future 153
Ruben Huber
Introduction 153
The Specter of the Digital Transformation 153
Actors in the Shipment Cycle 153
Key Trends That Will Shape the Future 154
Technology 154
Specialization 156
Omnichannel 157
Virtualization 158
Reshaping Logistics Service 159
Collaboration Is Key 160
Digitalization Impact for White-Collar Workers 162
The Regulatory Environment 163
Conclusion 163
Key Takeaways 164
References 165
12 International Trade Revolution with Smart Contracts 169
Matías Aránguiz, Andrea Margheri, Duoqi Xu, and Bill Tran
The Blockchain Revolution 169
Smart Contracts 171
Smart Legal Contracts 171
Service Level Agreements 171
Smart Contracts in International Trade 172
Paperless Trade 172
Trade Finance 173
Bill of Lading 173
Letter of Credit 174
Trade Facilitation 174
Smart Import Declaration 175
Trusted Payment 176
we.trade Case Study 177
Information Distribution 178
Information Transmission 178
Tradelens Case Study 178
Information Symmetry 178
Smart Contract Initiatives 179
Government Initiatives 179
Chinese Central Bank 179
South Korea 179
Private Initiatives 180
Mizuho Bank Using IBM 180
Marco Polo Trade Initiative 180
Risks and Challenges of the Implementation 180
Technological Challenges 180
Scalability 180
Sustainability 181
Security 181
Interoperability Challenges 181
Compatibility 181
Data Standardization 182
Legal Issues 182
Validity 182
Privacy 182
Conclusion 182
Key Takeaways 183
References 183
13 Exploring China’s Digital Silk Road 185
Andre Wheeler
Introduction 185
Digital Integration and Supply Chain Along China’s BRI 186
Challenges of Digitization for the Freight Industry Along the BRI 189
Challenges in China 190
System Connectivity Challenges 191
Digital Silk Road as an Answer to the Digitalization Deadlock 191
Summary 193
Key Takeaways 194
References 195
14 Marine Terminal Operating Systems: Connecting Ports into the Digital World 197
Ira Breskin and Ayush Pandey
Introduction 197
Terminal Operating Systems 198
Ports and Local Governments Recognizing the Value of Modern TOS 198
An Increasingly Competitive TOS Software Market 199
Navis as a Terminal Operating System 200
Breaking Down the Costs of Implementing a TOS 202
What to Consider When Selecting a TOS? 202
Importance of Visibility at the Terminal 203
Digital Communication is Key 204
The Future of Terminal Operating Systems 204
Conclusion 206
Key Takeaways 207
References 207
15 Improving Cross-Border eCommerce Through Digitalization: The Case of Compliance in B2C Shipments 209
Simon de Raadt and Jiao Xu
Introduction 209
Customs Clearance as a Barrier Constraining Growth 210
Lack of Integration as the Root Cause of Customs Misdeclaration 212
How the Digitalization Can Revolutionize Cross-Border ECommerce 214
Increased Customer Satisfaction 215
Supply Chain Visibility 215
Speed of Customs Clearance 216
Technology as Enabler for a Cooperative Model 217
Technical Requirements 219
Conclusion 219
Key Takeaways 220
References 220
16 Enabling Platform Business Models for International Logistics 223
Sam Heuck and Cory Margand
Introduction 223
Current International Logistics Technology Landscape 225
The BCO’s Perspective 230
The Future 232
SimpliShip: Deeper Dive into an Existing Logistics Marketplace 233
The Era of Data and the Impact on the Workforce 235
Conclusion 238
Key Takeaways 238
References 238
17 The Evolution of the Cold Chain: A Story of Increasing Complexity Amidst a Sea of Traditional Thinking 243
Alex von Stempel
Introduction 243
Cold Chain Transportation 243
Cold Chain Transportation Modes 244
Ocean Freight 244
Airfreight 246
Technological Differentiation Between Air and Ocean Cold Chain Transportation 246
Cold Chain Transportation Considerations 247
Condition Monitoring 247
Controlled Atmosphere (CA) 248
Modified Atmosphere Packaging (MAP) 249
Evolution of Cold Chain Transportation 249
Technology Solutions 251
Blockchain 251
IoT and AI 252
Gaps to be Addressed 252
Food Safety as the Key 253
Conclusion 253
Key Takeaways 254
References 254
Section IV People 257
18 People Navigating Digital Transformation 259
Johannes Kern
References 261
19 Change Management Falling Short - the Call for Business Transformation 263
Michael Teubenbacher
Introduction 263
Change Management and Business Transformation - Two Sides of the Same Coin? 264
Business Transformation in the Context of “Digital” 265
Change Management in the Context of “Digital” 267
Business Transformation and Change Management in the Context of the Fourth Industrial Revolution in Logistics 271
Conclusion 274
Key Takeaways 275
References 275
20 Organizational Culture Change: Process to Sustainably Improve Performance 277
Robert Mostert and Johannes Kern
Introduction 277
OCC Business Practices 279
Strategic Matching 279
Purpose, Vision, and Mission 281
Values and Beliefs 281
Recruitment and Placement 283
Training and Development 283
Rewards and Recognition 284
Performance Management and Feedback 285
Artifacts 286
OCC at Toll 287
Background 287
New Purpose, Values, and the Case for Change 288
Changing the Way to Manage Performance 291
Tone from the Top (Leadership) 292
Next Steps 292
Conclusion 293
Key Takeaways 294
References 295
21 Competence Management as an Enabler for the Digital Transformation of the Supply Chain 299
Jiayu Sun
Introduction 299
Competence Management in Supply Chain Functions 300
Fundamentals of Competence Management 300
Bosch Case Study: A Competence Model Example 300
Current Competencies Required 301
Future Competences Needed 301
Digital Transformation Competence Management: A Learning Transformation 303
Fundamentals of Learning 303
Transitioning from Passive Learning to Active Learning 304
Transitioning from Classroom Training to Digital Learning 305
Future Learning Trends 305
Micro-learning 305
Mobile Learning 306
AR/VR 306
Blended Learning 307
Conclusion 307
Key Takeaways 308
References 308
22 Impacts of Digitalization on Traceability: A Case Study of the Carbon Fiber Supply Chain 311
Cameron Johnson
Introduction 311
Carbon Fiber, The Material of the Future 312
Global Supply Chains: A Fragmented Picture 312
Several Constraints Characterize the Global Supply Chain 313
Case Studies on Lack of Material Traceability and Digitalization 314
Case Study 1: An Aerospace Company Losing a Qualified Supplier 314
Quality Management 315
Quality Control 315
Standards 315
Case Study 2: Traceability, Which Affects Efficiency and Compliance 315
Case Study 3: A Global Carbon Fiber Converter’s Internal Waste System Could Use an Upgrade 318
Tracking Waste 319
Compliance 320
Digitalization Benefits in the Global Carbon Industry 320
Implementation Challenges 320
Manual Entry 320
Cost 321
Training and staffing 321
Motivation 321
Digitization Opportunities 321
Conclusion 322
Key Takeaways 322
References 323
23 The Evolution of Freight Forwarding Sales 329
Mac Sullivan, Dennis Wong, and Zheyuan Tang
Introduction 329
The Rise of the Digital Freight Forwarder as a New Entrant 329
Market Shifts 330
Amazon Effect 330
Instant Visibility and Pricing 331
Redefining Customer Service 332
The Evolution of Freight Forwarding Sales 332
The Traditional Sales Representative 332
Traditional Sales Reps Evolving 333
Rise of Technology and Its Effects on Sales 333
Connectivity 334
Freight Forwarding Sales Executives at Risk of Losing Their Jobs? 335
Analytical and Creativity as Valued Skills 335
Future Job Market 336
Sales Enablement in a Digital Age 336
Information 337
Training 338
Talent 338
New Cultures and Skills 339
Conclusion 340
Key Takeaways 341
References 341
24 Managing and Selecting Logistics Service Suppliers 345
Colin Cobb and Dyci Sfregola
Introduction 345
Identifying Business Needs, Capacity, and Capabilities 346
Motivational Example 347
Background 347
Current State Enterprise Network 348
Services that Will Be Needed to Achieve the Goal 348
Industry Vertical Experience 348
Technology Solutions 348
Forecasted and Desired Demand 348
Previous Wins and Challenges 348
Deconstructing the Issues 349
Defining a Solution 349
Choosing a Solution 350
Sourcing and Managing Suppliers in the Continuum 350
Strategies for Developing Strategic Alliance 351
The Vested Outsourcing Model 351
Pricing Considerations for Outsourcing 353
The Roadmap for Success: Onboarding, Measurements, and Service Level Agreements 354
Key Performance Metrics 355
On-Time Delivery (Inbound) 355
Order Accuracy 355
Cost per Shipment 355
Customer Order Cycle Time 356
Carrier Scan Rate 356
Inbound (Purchased) Order Cycle Time 356
Inventory Accuracy 356
Fill Rate 356
Data or Document Transfer Error Rate 357
Logistics Billing Accuracy 357
Supplier Development and Managing the Supplier Relationship 357
Conclusion 358
Key Takeaways 358
References 359
Section V Conclusion 361
25 The Digital Transformation of Logistics: A Review About Technologies and Their Implementation Status 363
Johannes Kern
Introduction 363
State of Digitalization in Logistics and Supply Chain Management 365
Logistics Infrastructure 365
Seaports 365
Airports 366
Warehousing 368
Logistics Execution 371
Road Transport 371
Sea Transport 376
Air Transport 378
Courier, Express, and Parcel Delivery (CEP) 381
Logistics Services and Advisory 387
Conclusion 391
Key Takeaways 393
Acknowledgments 394
References 394
Glossary 405
Index 435
