Logistic Operations – Trends and Overview

Inez Bartosińska

A successful logistic strategy requires a lot of thought, planning, and reviewing the market. For example, maintaining an efficient Supply Chain wouldn’t be possible without the manager and the whole team following current trends. And there are lots of them. Take, for instance, all the technologies developed to improve the workflow. Aren’t they emerging so fast that we can barely follow them? How to know which trends in logistics are worth your attention? What are they all about? Let’s find out.

Logistic Operations – Trends and Overview

Over the last year, the COVID-19 pandemic has caused significant obstacles to global logistic operations. When almost every country introduced restrictions, supply chain management couldn’t keep up with its regular pace. Logistic companies that handle product storage and shipment suffered many difficulties during that time. On the other hand, some industries, such as e-commerce, healthcare, or pharmaceuticals, were thriving. The demand for its products and services grew to the point that their only problem was delivering enough supply in time. Nevertheless, both sides had to pivot their strategies.

So, which solutions took the first place in the logistics operations market? Like in every other industry, we indeed could observe the expansion of many technologies and process automation. Artificial Intelligence, Internet of Things, Blockchain, and Robotic Process Automation, to name a few. Those tech-based tools are expected to improve the majority of the processes involved in logistics. Even though the abundance of them may be overwhelming, or you might feel insecure about their validity, the truth is those modern solutions will most likely bring you significant profits.

Moreover, with the virus present in our lives, we can now speak of the ‘new normal’. For instance, omnichannel solutions and contactless deliveries are something desired by consumers. It is not only safer but faster too. No wonder we got used to it so quickly, and giving it up could turn out pretty harmful. As a logistics company’s manager who wants to keep up with the market trends, you should find a way to adjust your business to these conditions. 

What are international logistics?

Logistics management is an integral part of any company’s economy. It might sound complicated; however, logistics is simply a management process of materials and produced goods. It involves many steps such as planning, creating shipping schedules, storage, distribution, and monitoring if the supply goes from one place to another and reaches the customer without any obstacles. Global logistics is the same process with only one difference. It involves a physical commodity transaction that has to take place between two or more countries. The main goal of international logistic management is a shipment of necessary materials to locations where they can be manufactured into finished goods and then delivering them to their final destination.

While logistic management is already a complex process, making it global brings even more challenges. It is not only the case to cover a distance that usually involves many means of transportation. Facing an international customer, you are always obligated to make sure you meet regulations, taxes, and requirements established by the government of the chosen country. 

What is logistics in operations management?

Operations management is a business’s duty to plan, organize, coordinate, and supervise the resources required for a company to achieve its highest efficiency level. It is concerned with every department of the factory site that enables the production and distribution of the company’s goods and services. Logistics, being the management of the flow of goods between customers and corporations, is a crucial part of this process. It is responsible for material and immaterial resources and involves a whole array of activities such as data flow, production, packing, transportation, inbound and outbound movements, or even security. A well-managed logistics is a key to successful operations. 

What is the difference between logistics and operations?

While Supply Chain Management is a system that enables and coordinates goods production and delivery to the customers, logistics, and operations are an integral part of this process. How do they differ?

Operations are all the business activities that a company undertakes to convert raw materials into finished goods or services, put them into the market, and make a profit. Simply put, operations consist of all the actions taken to generate recurring revenue for the business. 

Logistics, on the other hand, involves the transportation part. It aims to plan, implement, monitor, control, and optimize the flow of components, materials, and goods. Logistic management is concerned with supply storage and movement in a supply chain. 

What are the major trends in logistics?

There is no wonder that the logistic operations market keeps evolving. New technologies emerge to automate and enhance the company’s workflow and meet with greater customer satisfaction. Let’s dive into the details of some trending logistics solutions.

  • Embedded Technology Integration

Logistic companies are smart enough to know that they need a data movement platform for robust and real-time data sharing in both ways, to and from the clients. To achieve that, many businesses introduce embedded technology. SaaS organizations take advantage of modern tech-based solutions to collect the data, process it, and provide insight to all parties relevant in the process. It is the fastest way for a seamless information flow and a key for a logistic company to maintain a high position on the market. This trend has been evolving for the last few years, and it is expected to grow even more soon as the demand for swift data access increases. 

  • Omnichannel Services 

Ever wonder why you have so many delivery options to choose from while making a purchase? Few different courier companies, pick-up points, AMPs are just some of them. They are all there because that is what customers want – the liberty to choose what will satisfy them. Omnichannel services are precisely the answer to this demand, no wonder this solution is trading in the market recently. Especially during the COVID-19 pandemic, when almost everyone had to stay home and limit face-to-face interactions, companies were obliged to enable a wide range of delivery options, including no-contact deliveries. We all got used to it. Therefore, even after the virus is gone, the variety of options won’t disappear.

  • Sustainable logistics

It is no surprise that the green policy is widely present in logistics operations as the same happens in almost every industry. Customers are more likely to use the service and purchase products that were manufactured in an eco-friendly way. This trend has already been visible for quite some time; however, we can observe that the interest in it only keeps growing. Moreover, apart from being good for the environment, sustainable solutions are also cost-effective, and they can significantly boost your company’s growth. It has been proved that those businesses that focus on green management grow almost 6 times faster than those that don’t. Now, isn’t that a great incentive to take to sustainability?

  • Digital Twins

In 2018, Gartner predicted that by 2021 digital twins’ creation will be one of the most relevant market trends, and more than 50% of the companies will introduce this technology. A digital twin is a simulation, a virtual copy of a process, product, or service created with information received through sensors embedded in other devices. Even though it is not a new concept, the simulation can benefit in many industries, including SCM. Due to the rapid development of the IoT and RFID devices, we could observe its recent importance increase. 

Technological advances have allowed enterprises to develop and test devices, products, and processes in a virtual environment before moving them to the real world. In this way, they detect problems and threats, test new configurations, and train reactions to various scenarios. Simulation is, therefore, nothing more than a copy of the process that serves as the basis for experimentation to improve flexibility and minimize the red ink. 

What are three examples of logistics innovations?

In recent years, we could observe a massive increase in tech-driven solutions in logistics management. Let’s see some examples of the most relevant innovations. 

  1. Internet of Things

There is no doubt that inventory tracking is one of the essential parts of logistics operations. Thanks to the IoT, every step of the Supply Chain Management can be viewed with real-time visibility. How does that happen? Internet of Things enables the connection of physical devices monitoring and transferring the data without human intervention required. Over the last years, it allowed many companies to improve their inventory management efficiency, transparency, and fleet management. No wonder why IoT passes for one of the most relevant trends in the market. 

  1. Artificial Intelligence

Another recently booming trend in logistics operations is AI-based technologies. Artificial Intelligence offers a wide range of solutions such as forecasting that could support your business in dealing with demand fluctuations or developing a more efficient SCM strategy. Reduced operating costs and task automation are just some of the pros you will discover if you decide to improve the company’s workflow with AI solutions. 

  1. Robotics

Do you want to increase the speed and accuracy of the Supply Chain processes? The combination of robotics and logistics might be the answer. Despite appearances, it is not about replacing the whole human task force with robots (although that might happen in the future). It is more about robots relieving people from tasks like resource pick up and transportation from the warehouse or making calculations. Robotics saves a lot of time and minimizes errors, so it might be worth considering.

Future of logistics industry

Even knowing which technologies are of value in today’s logistics industry market, it is hard to predict whether they will still stay relevant tomorrow or will other solutions supersede them. While we can’t be one hundred percent sure of which trends will break out, some tendencies indicate which way this development will go. 
The global logistics market was valued at $7,641.20 billion in 2017 and is projected to reach $12,975.64 billion by 2027, registering a CAGR of 6.5% from 2020 to 2027. This, better than anything, shows that the upcoming trends in logistics and operations management will primarily be tech-based. The development of the e-commerce industry, process automation, and the introduction of more modern solutions will result in faster and more effective production and increased contracts related to trade.

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