The state of DIGITIZATION IN LOGISTICS

A data-driven business and technology trend report on supply chain digitization, sustainable logistics, workforce transformation and omnichannel distribution.

LOGISTICS IN THE POST-PANDEMIC ERA

Over the past decade, advanced technologies and social and business trends have disrupted the logistics industry. This was further accelerated by the COVID-19 pandemic. We investigated about the most relevant technological and societal trends in the logistics sector and their business implications. The research was conducted using Reply‘s SONAR Trend Platform, to create an overview and mapping of relevant trends based on their occurrence within expert media articles, mass media, patents and scientific publications.

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TREND HYPE-CYCLE OF LOGISTICS TECHNOLOGY

How the focus of attention is shifting

The demand for today and the future is integrated end-to-end Logistics solutions. This means integrated infrastructure / assets platforms, integrated services platforms and integrated digital platforms. Technology is therefore infusing real world applications and services, while the pandemic led to a seismic shift in focus of attention.

THE NOW: TECH IS HERE TO STAY

Although the share of interest of the major tech topics remains on a high level, timeline analysis shows that within the last year the continuous upward trend started to stagnate, indicating that the relevance of these topics is not any longer in question and focus of attention and discussions is shifting.

Top 3 Stagnating Trends

THE NEXT: SHAPING TOMORROW

Upcoming trends mirror a shift of focus towards rethinking the status quo in terms of people (workforce and skills), planet (environment and nature) and business (technological infrastructure) for enhanced resilience of future business operations and the global supply chain.

Top 3 Upcoming Trends

SUSTAINABLE LOGISTICS

Upcoming trend No. 1

SUSTAINABLE LOGISTICS

Welcome to the age of sustainability: Green logistics has gained significant traction within the last years, as the transportation sector is a large contributor to greenhouse gas emissions as well as environmental resource depletion. Businesses are rethinking and realigning supply chains from sourcing, design, production, delivery and return to end-of-life - aiming for enhanced sustainability through resource efficiencyy and optimization, emission reductions, fleet electrification, carbon offsetting, circular solutions, and the integration of new technologies. On the road towards a clean future environmental dedication moved from carbon neutrality or zero emission to carbon negative or climate positive goals, supported by technological development and data.

Zero emissions:
The Carbon
Neutrality Pledge

More and more (logistics) players are committing to carbon-neutral, zero-emissions or even carbon negative goals. This means reducing emissions by enhanced efficiencies, shifting to carbon-efficient modes of transportation, alternative fuels, fleet electrification, as well as low/zero emission infrastructure.

Sustainable
Last Mile & Urban
Logistics

Especially in urban and inner-city areas businesses are faced with increasing relevance of access to eco-friendly and affordable operational capabilities to serve the last mile in a sustainable way. This means rising efforts in electric/hybrid/bike/drone/robot delivery, hyperlocal e-commerce and green packaging.

AI boosting
Operational
Efficiencies

A new breed of data-driven and AI-based services aim for the real-time optimization of operational efficiencies along the logistics supply chain from demand forecasting to resource planning, scheduling, loading, transportation, fleet management, route optimization, location intelligence and delivery, to calculating the end-to-end carbon footprint.

WORKFORCE TRANSFORMATION

Upcoming trend No. 2

WORKFORCE TRANSFORMATION

The reality and future of logistics workforce is shaped by two contradicting developments: Rising talent demand and competition due to the digital retail boom and technological progress and automation. The latter results in less demand for frontline workers as well as changing job requirements. Remote and agile working models enable a virtual workplace which will translate into hybrid models in future. Workforce related trends are flexibility and scalability of workforce models, the tech-augmented workforce, required re- and upskilling to bridge upcoming knowledge gaps, worker’s physical and mental heath and safety to improve future employer-employee relationships for talent retention.

Rise of co-bots &
automation

Intelligent robotics such as AMR/AGVs, picking robots and automation are infusing logistics operations to assist humans with manual labor - from automation of warehouse management, inventory transfer, retrieval systems to autonomous order shipments. AI smartening up the robotic tech, advancements in vision software and other sensing systems increasingly allow machines to operate side by side with humans.

Physical & Cognitive
Augmented Workforce

Frontline employees working in warehouses or distribution centers are profiting more and more from tech-enhanced working, using augmented reality, smart glasses, wearables or exoskeletons securing physical health while increasing productivity and reducing error rates. The next generation of supportive tech is blending tech and environment even more, leveraging AI and vision computing for cognitive augmentation.

Native interfaces &
voice productivity

Voice-controlled support systems and solutions for workers are quite common within warehouse environments allowing for hands-free operations, e.g. voice-directed picking. It also helps addressing talent shortage by simplifying e.g. onboarding of new workers. The next level of these solutions is aiming for more productivity by integrating advanced analytics and optimization and near-perfect speech recognition.

OMNICHANNEL LOGISTICS

Upcoming trend No. 3

OMNICHANNEL LOGISTICS AND SUPPLY CHAIN RESILIENCE

The pandemic-induced acceleration of e-commerce and home-delivery has been disclosing the significance of a seamlessly integrated and flexible omnichannel retail ecosystem. Changing environmental conditions ask for highly dynamic fulfillment, delivery and returns management. The corresponding reconfiguration of the supply chain and distribution strategy and infrastructure acts as the essential backbone, allowing businesses to react fast and agile. Logistics companies are also facing fierce competition by third-party players like e-commerce giants, start-ups and brands with in-house logistic capacities. The customer experience imperative is forcing retailers to adapt and redesign their offline and online retail strategy, service ecosystem and partner network.

Agile Distribution
Networks

As customers increasingly expect instant and flexible delivery options for goods bought online, the bedrock of omnichannel experiences is a well-integrated network across multiple, agile and AI-enhanced delivery, pick-up and return services at any place or time. Stores are increasingly been repurposed as warehouses and customers free to pick/get delivered tailored to preference (e.g. smart lockers, curbside pick-up, last mile delivery).

Dynamic Omnichannel
Fulfillment

Omnichannel retail demands for a logistics network and infrastructure supporting dynamic warehousing and fulfillment services to enable companies to quickly respond to fluctuations within the market and enhance supply chain resilience. Businesses expanding their own infrastructure with flexible internal and external nodes build around a digital technology backbone that allows for real time extension, monitoring and modification.

Integrated Reverse &
Returns Management

With the expansion of e-commerce, the demand for reverse logistics and returns management skyrocketed within the last year, demanding for sustainable concepts to reduce wastage of goods and keep costs in perspective. AI-enhanced and automated returns processes might help with streamlining and reduce inefficiencies, as well as preparing returned products for resell, reuse or recycling.

How the delivery and fulfillment ecosystem grew more complex

COVID-19 prompted new thinking for omnichannel. Whereas e-commerce giants are continuously broadening their footprint in the logistics field, retailers increasingly leverage their real estate or agile third-party services for in-house operations and logistics processes. Logistics providers are ramping up attempts as well to provide elastic and integrated omnichannel services.

Click on numbers to follow the main events for each quarter
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13
1

Alibaba-backed logistics firm Cainiao lands funding at a reported $7.7B valuation (03/16)

Home Depot and Walmart using store network to ship pack and online orders (03/16)

2

Lalamove to launch same-day delivery service in Bangkok (02/17)

Shippo is building a big data warehouse in the cloud (02/17)

3

Alibaba pays $807M to take majority ownership in Cainiao (09/17)

XPO Logistics doubling last-mile footprint (09/17)

4

Walmart buys delivery logistics start-up Parcel (10/17)

Amazon expands same-day delivery and one-day shipping (12/17)

Target to buy same-day delivery company Shipt for $550M as it battles Amazon (12/17)

5

DHL eCommerce Unveils Parcel Metro (03/18)

6

XPO Connect offers real-time cargo tracking for merchants (04/18)

7

UPS launches Ware2Go platform to help SMEs expand (08/18)

E-commerce spurs innovation in last-mile logistics (09/18)

ShipBob raises US$40M (09/18)

8

eBay Fulfilment and eBay Shipping launched in Germany (10/18)

9

Cainiao plans to digitise the logistics industry (05/19)

Alibaba wants to build logistics network (05/19)

Flexe raises US$43M to help online retailers take on Amazon (05/19)

Shopify to launch warehouse network for merchant clients (06/19)

10

eBay to launch new shipping service (07/19)

11

Amazon adds warehouse network closer to cities to speed up same-day delivery (03/20)

12

FedEx and Microsoft partner up for supply chain collaboration (05/20)

Target to acquire same-day delivery tech from Deliv (05/20)

13

FLEXE Raises $70M to power dynamic logistics networks (12/20)

1

Alibaba-backed logistics firm Cainiao lands funding at a reported $7.7B valuation (03/16)

Home Depot and Walmart using store network to ship pack and online orders (03/16)

2

Lalamove to launch same-day delivery service in Bangkok (02/17)

Shippo is building a big data warehouse in the cloud (02/17)

3

Alibaba pays $807M to take majority ownership in Cainiao (09/17)

XPO Logistics doubling last-mile footprint (09/17)

4

Walmart buys delivery logistics start-up Parcel (10/17)

Amazon expands same-day delivery and one-day shipping (12/17)

Target to buy same-day delivery company Shipt for $550M as it battles Amazon (12/17)

5

DHL eCommerce Unveils Parcel Metro (03/18)

6

XPO Connect offers real-time cargo tracking for merchants (04/18)

7

UPS launches Ware2Go platform to help SMEs expand (08/18)

E-commerce spurs innovation in last-mile logistics (09/18)

ShipBob raises US$40M (09/18)

8

eBay Fulfilment and eBay Shipping launched in Germany (10/18)

9

Cainiao plans to digitise the logistics industry (05/19)

Alibaba wants to build logistics network (05/19)

Flexe raises US$43M to help online retailers take on Amazon (05/19)

Shopify to launch warehouse network for merchant clients (06/19)

10

eBay to launch new shipping service (07/19)

11

Amazon adds warehouse network closer to cities to speed up same-day delivery (03/20)

12

FedEx and Microsoft partner up for supply chain collaboration (05/20)

Target to acquire same-day delivery tech from Deliv (05/20)

13

FLEXE Raises $70M to power dynamic logistics networks (12/20)

Business implications for logistic companies: maximize omnichannel logistics resilience & elasticity

The next generation of customer experience will be led by an omnichannel retail paradigm based on a respective logistics and supply chain infrastructure and network able to leverage tech and data intelligence. Companies succeeding in setting up a digitized, data-driven and well-integrated supply chain network will outperform others in the long-run.

Embrace unification
& elasticity

Order from anywhere. Fulfill from anywhere.

  • Set up a digital logistics backbone and unified supply chain ecosystem for omnichannel and cross-channel capabilities.
  • Leverage partnerships and existing store network infrastructure for multiple points of fulfillment and returns.
  • Enhance short-term responsiveness to dynamic customer needs

Go for visibility and
transparency

The age of zero-info lags across the supply chain.

  • Install real-time visibility platforms, information systems and processes to eradicate information time lags.
  • Get rid of information silos and allow free information flow across functional boundaries and cross-channel visibility.
  • Improve collaboration across supply chain networks to have one centralized source of truth.

Digitize &
smarten up

The digital twin of the supply chain for real time agility.

  • Move supply chain solutions to the cloud for agility and scalability.
  • Establish a business intelligence and decision-making system based on gathering data from IoT and customers.
  • Leverage tech and AI for enhanced and near real time demand sensing, optimal demand-supply matching or reallocation of stock.

Think beyond
the current

The supply chain network is here.

  • Combine cross-functional efforts from marketing, sales to logistics to deliver the most compelling and seamless customer experiences.
  • Rethink processes beyond execution – spanning e.g. product development, production and marketing as the competitive edge for future business operations.

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20.07.2021

News & Communication

Reply named a Visionary in the 2021 Gartner Magic Quadrant for Warehouse Management Systems for the Second Consecutive Year

Reply announced today that for the second year in a row it has been recognised by Gartner as a Visionary in the Magic Quadrant for Warehouse Management Systems.

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Reply is at the forefront of technological evolutions in the supply chain space and it is able to offer customers the tools and 360-degree support to deal with new and unforeseen business challenges. Reply, with its proprietary suites LEA ReplyTM and Click ReplyTM has been positioned as a Visionary by Gartner in their 2021 Magic Quadrant for Warehouse Management Systems.