Published on the 16/05/2016 | Written by Clare Coulson

Driverless cars, drones, tube logistics and bionic enhancements – supply chain logistics has got decidedly sci-fi but underlying it all are two key concepts…

The third edition of the DHL Logistics Trend Radar provides 55 pages of in-depth analysis of the social, business and technology trends transforming logistics today. It lists 26 key developments to be aware of, from macro trends such as the changing energy and trade landscape to micro trends such as logistics start-ups unbundling the logistics industry. iStart caught up with Matt Casbolt, New Zealand country manager for DHL Supply Chain to get the local angle on the results of the research.

Asked what he thought were the most important aspects of the report Casbolt replied: “The trends that I believe can have the most potential to impact logistics are centralised in two areas – labour efficiency and connectivity.” Breaking it down he said that, with our region’s higher labour costs, robotics, augmented reality and self-driving vehicles/drones can help logistics providers harness significant long-term savings on labour costs due. But he doesn’t expect robots or drones to ever entirely replace people in operations. (“They cannot look at a process and analyse if there is a better way to do it.  The innovation that people naturally have is irreplaceable.”)

“The trends that I believe can have the most potential to impact logistics are centralised in two areas – labour efficiency and connectivity.”

In the connectivity camp he identified two big trends which seem to pop up in every technology conversation, but which he says are having a real impact on supply chain businesss today: big data and internet of things. Of big data he said that the big breakthrough comes not from the data itself but from data analytics which “turns undigested information into insights and advances”. Combine this with the rise of self-learning systems – strong advancements in algorithms, computational power, and hardware have enabled new forms of machine learning applications in logistics – and there is immense potential for autonomous data-driven decision making. (And then throw in unmanned aerial vehicles and self-driving cars, and perhaps the robots will take over after all!)

Moving on to the Internet of Things (IoT), he said that while its full impact has yet to eventuate, the opportunities are “endless” in terms of connecting and digitalising  all of the moving parts of a warehouse. He offered as examples improved safety for the operation of mechanised handling equipment (MHE) and individual item tagging which could boost efficiency across stock-takes, asset management, temperature measurement… and the list goes on. For now, however, only a few logistics applications with substantial business impact have materialised, which, according to the report is largely due to a shortage of standards in the industry, security concerns, and the fact that recent IoT innovations have mainly been developed for the consumer market. “Therefore, logistics will have to wait until similar ruggedised versions that meet business requirements come to market,” it said.

As for those driverless cars and drones, while they are new entrants on this year’s Trend Radar, Casbolt said that he thinks the opportunities will be more suited to developing countries and heavily populated regions.  That said, he did note that there are a number of venture capital businesses and starts-ups in Australia and New Zealand that are showing interest in unmanned aerial solutions (also known as UAVs or drones).

Turning to the Trend Radar itself, a number of new and evolved social, business and technological trends made the list, including: batch size one (hypercustomisation); on-demand delivery (formerly known as ‘crowd logistics’); smart energy logistics; tube logistics (tube infrastructures for cargo transportation); bionic enhancement (the old wearable technology trend); digital identifiers (smart sensors tags and biometrics); self-learning systems; and unmanned aerial vehicles and self-driving vehicles.

In a world where personalisation is de rigueur and the one-size-fits-all approach is no longer viable iStart asked what needs to happen before ‘batch size one’ becomes a viable reality in businesses? Don’t these trends run entirely counter to traditional supply chain logistics which are all about economies of scale and automation? Yes, said Casbolt, it does throw up significant challenges in the supply chain and in essence, it’s in direct competition with traditional production line manufacturing. But he said it is already being realised here to some degree.  “We have a few customers for whom we support value-added services such as monogramming, gift wrapping, tailored spare parts, etc.

If local companies do nothing else to improve or transform their supply chains and logistics, they should be open to trying new things.

“For the most effective delivery of batch size one, it will require closer relationships between manufacturing  and on-shore logistics with respect to greater postponement  in manufacturing cycle closer to actual demand, and will also bring into play more near-shoring,” he said.

Casbolt said that if local companies do nothing else to improve or transform their supply chains and logistics, they should be open to trying new things.  “The most dangerous mentality to have right now is ‘this is how we’ve always done things’. Technology is evolving every industry so rapidly, that standing still will lead to going out of business.” He also suggested that companies should involve their customers in trials of new technology, calling it “critically important”.  At a time where providing feedback is common practice – thanks to social media – it makes sense to let customers help tweak a product or service offering, or use the information available to identify trends in customer demand and expectations, opportunities for cost saving and efficiency improvement, and even what’s not working.

You can download the full report here.