Overcoming common logistics 4.0 challenges

A critical factor in increasing productivity and saving costs in the logistics industry is the digitisation of the supply chain sector. It helps reduce errors, save time, and increases the overall visibility across the chain. In this article, we discuss what is logistics 4.0, its challenges and how partnering with DHL Express can help you embrace this new technology.

According to a German Logistics Association (BVL) study, around 50% of the surveyed retail, industry and logistics service providers are aware that their future lies in the application of industry 4.0 technologies to supply chain processes. Moreover, they identify factors like fully digital processes (90%), digital master data management (89%), and digital communication (76%) as crucial. Unfortunately, most companies still use traditional supply chain management as reaping the full benefits of the 4.0 concept poses many challenges. Read on to find out more about logistics 4.0 and its challenges.

What are the essential logistics 4.0 components?

1. End-to-end visibility

Arguably, one of the crucial components in logistics 4.0 is end-to-end visibility. The enhanced digitisation of the supply chain allows companies to have a smarter value stream. Through real-time tracking, businesses have the ability to receive information on shipments across the entire supply chain and view it easily in a single dashboard across various devices. This allows any potential disruptions to be flagged early and for the issue to be quickly dealt with.

2. Automation of processes with robots and drones

By having robots, drones, and shuttles, repetitive work such as warehouse order fulfilment and order picking are made more efficient. Automated robots are able to detect barcodes from the parcel and sort them accordingly into their respective delivery bins. Drones are used to audit inventory, take stock, and search the warehouse for lost items. Shuttles travel independently around the warehouse to transport and stack goods.

3. Internet of Things (IoT) solutions

Internet of Things (IoT) solutions play a crucial role in maximising the ability of enterprises to gain meaningful data from various touchpoints within a warehouse. In this regard, IoT adoption in logistics workflows is also vital, as it facilitates the use of smart utilities. Moreover, it enhances their capabilities by deploying increasingly specific and granular insights. This builds transparency into the process and facilitates decision-making.

What are the most considerable challenges of logistics 4.0?

Despite its appealing proposition for all businesses, logistics 4.0 poses a set of hurdles that are exceptionally problematic for small and medium enterprises (SME). A 2016 Norwegian University of Science and Technology research expounds on these – we discuss the significant issues for logistics companies below:

1. Excessive investments in IoT adoption can be costly

One of the biggest hurdles for shippers, freight forwarders, and logistics managers is the introduction of IoT devices into the value chain. Typically, such items are fundamental to the modern ‘smart factory’ and key to smarter logistics management. However, equipping trucks, pallets and containers with IoT devices can be costly.

2. Lack of skilled workers

While the 4.0 industry endorses extensive digitalisation, having skilled workers who can operate IoT devices is crucial. While a skilled workforce ensures effective operation, it also increases competitiveness. Unfortunately, a study by ARTS Holding SE shows that the staff bottleneck turns out to be one of the biggest logistics challenges companies face.

Indeed, enterprises find it increasingly difficult to hire talent who can solve complex problems. To make things worse, the lack of proper communication in foreign languages contributes to the low-efficiency rates.

3. Difficulty integrating existing systems

Perhaps, the most significant logistics 4.0 solution is end-to-end visibility. It delivers value in several ways, like improved disruption management and increased flexibility across the value chain. However, the obstacle of integrating existing technology with newer systems can ultimately bring all improvements to a halt.

As each touchpoint must connect via digital infrastructure, legacy systems and data silos that don't integrate with newer tech can contribute to the issue. In turn, enterprises seeking to switch to a logistics 4.0 framework need to ensure each component promotes connectivity and visibility across the network.

4. Client IT integration

The main feature of logistics 4.0 is that it naturally goes hand-in-hand with industry 4.0 supply chain systems. In the spirit of the abovementioned challenges, it's of utmost importance to have your clients integrate to one's own IT systems. Of course, such a request may seem too bold for a shipper or a freight forwarder.

However, the inability to do so will strip transport planners' ability to make proactive planning decisions. Usually, the lack of information about a client's production workflow leaves a delivery service provider blindsided. Such a misconception can significantly reduce shipment efficiency and likely increase the costs and distribution times.

How DHL Express embraces logistics 4.0 to digitalise its supply chain

According to research conducted by the World Economic Forum, in the 2016 white paper ‘Digital Transformation of Industries’, the digital transformation brought US$1.5 trillion of value to the logistics industry. The forecast oversees a potential for a further US$2.4 trillion worth of societal benefits by 2025. Arguably, DHL Express fully recognises the importance of digitalisation as a remedy to the current market challenges in logistics.

The company's Strategy 2025 aimed at optimising supply chain operations, has dedicated over €2 billion to digital transformation projects. Its primary goal is to minimise manual labour and repetitiveness, and deliver real-time solutions like On-Demand Delivery (ODD) and chatbots. Also, it has introduced AI-powered solutions like the DHLBot that improve overall efficiency.

Partner with DHL Express to increase productivity

DHL Express moves supply chain management forward with digitalisation. We give only the best to our customers by incorporating logistics 4.0 solutions into our value chain. When you work with a third-party logistics company that uses digital tools and technology to improve its processes, you can rest assured that your customers will always have a positive experience. Open a DHL Express account with us today.