Automated warehouses, virtual reality remote operations, artificial intelligence, and machine learning are becoming increasingly prominent themes in the logistics industry — from self-driving trucks and cycle counting drones to completely autonomous GTP (goods-to-person) warehousing systems enabling high-density storage for small, fast-moving consumer products.
Fueled by the growth of technological innovation and the industry’s appetite for automated solutions, the logistics sector is attracting some of the brightest minds and talent, people who are working to revolutionize global supply chains with a range of custom-built solutions for logistics behemoths to implement.
However, logistics technology innovation is not limited to those with the biggest wallets and large technical teams to implement and manage these offerings. The key to efficiency across the supply chain is ensuring all partners have the ability to optimize operations, share data, and integrate, together, for effective partnerships.
After all, we are part of a global supply chain network. No one operates in a vacuum — and this is where tech innovation needs to be inclusive of all partners, big and small.
Of the 20,000-plus 3PL businesses operating in the U.S. today, the average company has approximately 20 employees. In Canada, 90% of the logistics industry is made up of small and medium sized businesses (SMBs).
These SMBs are the lifeblood of our economy. It’s essential to have technology designed for smaller players, to ensure they are equipped to compete in the changing logistics environment, in order to keep wider supply chains moving efficiently.
Specifically, these tools need to be integrated and intuitive to use, to enable SMB logistics operators to reduce overheads. They also need to increase accuracy, be flexible and scalable, and offer the ability for SMBs to seamlessly partner with other members of the supply chain, regardless of size. That means technology providers increasingly need to consider how these services can be tailored to meet the needs of SMB providers.
Most SMBs do not have the capital to invest in large-scale robotic solutions or autonomous fleets— however, there are many new technological advances that can be adopted by smaller players to optimize operations with lower up-front commitment.
Technologies that traditionally required hefty capital expenditure, such as autonomous robotics, warehouse automation, and traditional required expensive new machinery and suitably qualified operators, are changing. Suppliers are now diversifying their offerings to enable more providers to take advantage of the benefits offered by these technologies.
This follows the shift towards software-as-a-service (SaaS), which has transformed the warehouse management system offerings for SMB 3PLs over the past decade. Technology offered as-a-service is on the rise in logistics, allowing smaller players to pick and choose the tech that suits them, and scale up with flexibility.
With SaaS systems, SMBs can access the tools they need using the devices and hardware they already have on hand — giving them greater control and a wider range of options to choose from.
We are now seeing other options that allow operators to shift capital expenditure to operating expenditure by utilizing as-a-service-style offerings. Major players are delivering robotics-as-a-service (RaaS) programs to provide autonomous robots and automated technologies in more flexible ways, opening up options for SMBs.
This helps to remove the requirement for multi-million-dollar upfront investments, and the cloud-based platforms that go along with these offerings are becoming increasingly robust and intuitive. This reduces the requirement for companies to have extensive expertise in-house to operate these systems.
Another area of innovation that is perhaps more tangible to the average SMB 3PL warehouse, is the way virtual reality (VR) technology is changing the options available when it comes to procuring specialized equipment and licensed operators, such as forklifts and their drivers. VR allows qualified drivers to remotely operate forklifts safely in a warehouse from many miles away.
SMB warehouses can access subscription-based services where they can “rent” a forklift, along with the driver, on an hourly basis — rather than having to invest in the machinery or hire permanent specialized staff that may only be required for part of the day.
As niche solutions continue to develop, smaller players should have more ability to pick and choose add-on integrations that they want to incorporate into their warehouse and transport systems.
This might be an AI plug-in for warehouse inventory forecasting or demand planning, or system integrations that allow them to partner with a last-mile provider using drones or self-driving vehicles for parcel or LTL deliveries.
As the logistics sector fuels greater innovation, there is an opportunity to build connected partnerships to allow players of all sizes and services to build a more connected supply chain.
SaaS has paved the way for smaller operators to see the value in flexibility and scalability in choosing applications that are the right fit for their operation. It is an exciting trend to see this same approach breaking down barriers to adoption, offering opportunities for SMBs to make the most of the latest wave of technologies.
Shaun Hagen is head of North America and chief operating officer at CartonCloud.