Research

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.

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.

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.

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.

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.