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Exclusive: What technologies are supporting supply chains globally and regionally?

Supply chain functions have not changed over the past century, despite globalization and technology advancements. This has made supply chain technology innovations necessary

The world warehouse robotics market is expected to cross $7.63 billion by 2026 Blockchain offers a sustainable, no-cash, automated way to ensure instant payments, credits, and settlements Global annual investment in IoT by supply chain companies will reach $435 bn by 2023

In an opinion piece, Janardan Dalmia, Founder & CEO of Trukkin wrote that the way supply chains function has not changed over the past century, despite globalization and technology advancements making supply chain advancements necessary.  

“Modern supply chains must keep up with the ever-changing demands of our times. These demands can only be met by a modern, world-class supply chain that can meet the demands of the customers of today. Supply chains can only accomplish this by incorporating technology,” said Janardan. 

So we had to ask about what these new technologies are, and so the following Q&A with Janardan tackles a wide range of technologies that supply chains depend on and logistics companies in the region need to incorporate if they aren’t already.  

1- Warehouse robotics: Which supply chain industry verticals are investing in warehouse robotics?  

Growing at a CAGR of 11.54%, the world warehouse robotics market is expected to cross $7.63 billion by 2026. Investments in warehouse robotics have soared in industry verticals that include:

  • Electrical and electronics
  • Metal and machinery
  • Chemical, rubber, and plastic
  • Pharmaceuticals
  • Apparel
  • Textiles
  • Paper and printing

The most compelling reason to use robots is efficiency and reliability. Robots do not tire and will perform repetitive tasks with ease. With the number of SKUs (Stock Keeping Units) going through the roof, robots help to empower automated, efficient mini-load storage and retrieval systems (AS/RS). These systems combat the problem of multiple SKUs by using lightweight cranes that can easily sort individual items, cases, trays, and crates. Additionally, these cranes also optimize storage and release key resources for other tasks. Using robotics in warehousing maximizes supply chain efficiency through automation of key processes such as:

  • Goods arrival
  • Storage
  • Fulfillment of outbound shipping
  • This helps in reducing the chances of error and enhances delivery times

2- Drones for last-mile delivery: is this happening in the region? 

Dubai’s plan to roll out its Dubai SkyDome initiative, which is being developed to provide the physical and virtual infrastructure needed for a full spectrum of drone services, will boost the use of drones for last-mile delivery. However, drones are currently not being used for last-mile delivery in the UAE and the Middle East.

3- Blockchain: When will this technology be used, not only for product verification and data audit but also for payments?  

With DubaiPay online and working without a hiccup, it is only a matter of time before blockchain rolls out to the public for payments. In logistics, automated payments and ledgers are two of the dozens of smart features that blockchain brings to the logistics industry. Blockchain will greatly reduce logistics costs by automating the inventory chain and reducing the full cost of goods procurement. 

With many companies still pursuing a traditional payments model, blockchain offers a sustainable, no-cash, automated way to ensure instant payments, credits, and settlements. IT-enabling logistics companies will go a long way in reducing incidents of theft and fraud and empowering smaller players.

Read: Study: Only 15% of Global Retailers’ Supply Chains are Prescriptive or Autonomous

Read: GCC port operators expanding their value proposition across supply chains: KPMG report

4- Autonomous trucks, planes: What does autonomous solve for logistics companies?  

With a plan to reduce accidents and losses by 12% and leading to savings of AED 2 billion (about $545 million) annually, the Dubai Autonomous Transportation Strategy is attempting to transform up to 25% of the total transportation in Dubai to autonomous mode by 2030.

The strategy will help cut transportation costs by up to 44%, resulting in savings of up to AED 900 mn ($245 mn) a year. When applied to transportation and logistics, the benefits of these savings alone can help the logistics industry get a major boost. This strategy will also help save AED 1.5 bn ($408 mn) a year by reducing environmental pollution by 12%. This is good for the world’s environment and climate change. As the strategy will attempt to increase the efficiency of the transportation sector in Dubai by 2030, it will generate nearly 18 billion in annual economic returns.

5- What are the technologies involved in real-time visibility

Real-time supply chain visibility is a game-changer for logistics. Forrester Research has predicted that global annual investment in IoT by supply chain companies will reach $435 bn by 2023. In a 2018 survey of transportation companies by Inmarsat, it was found that over 36% of companies had already deployed IoT technology, and 45% planned to invest in 2019. In 2021, a much higher number promises to invest due to the changes in the business landscape because of the COVID-19 pandemic.

A combination of RFID, IoT, AI, and predictive analysis coupled with machine learning are major technologies that are powering this change in visibility, efficiency, and transparency.

Benefits of investing in real-time supply chain visibility include:

Transforming logistics from individual vehicle management to a networked ecosystem

Building adaptive and agile companies that can predict situations and take action rapidly.

Develop crisis management frameworks to mitigate future risks

6- Digital Twins in supply chains: Is this technology in use today and for what purpose?  

Industrial digitalization is growing massively in the COVID-19 environment. Unilever uses real-time sensor data and streaming through digital twin technology to optimize supply chains. Similarly, Royal Dutch Shell recently launched a 2-year digital twin initiative to enhance operational excellence.

Many other companies such as Bridgestone and Boeing are also using AI, AR and IoT, and digital twin technology to optimize processes, make data-driven decisions based on real-time simulations, and make actionable predictions that will help drive supply chain efficiency.

7- Emissions control: Is the industry ecologically aware, and how?  

Although technologically advanced and an early adopter of technology, the UAE is one of the largest global logistics hubs. It has the highest carbon emission producers in the world per capita. UAE is also readying to transform itself into a showcase for responsible ‘green supply chain’ (GSC) practices.

The logistics industry is ecologically aware and is leveraging the power of technology to make transportation and supply chains eco-friendly through:

  • Improved product packaging design for better transportation
  • Improved physical distribution networks with a hub-based approach
  • Better reverse distribution through hubs
  • Better route planning and navigation using IoT and GPS
  • Reduced emissions through better and newer vehicles
  • Adoption of green (electric or human-powered) vehicles for last-mile delivery

Additionally, an understanding between the government and industry through certification schemes leading to accreditation that gives an incentive to reach desirable environmental standards will benefit the logistics industry overall.