Inside Logistics

Cloud IT beneficial to logistics firms

Study shows current environment means cloud-based computing will reduce costs and increase efficiency


September 10, 2018
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Logistics is the backbone for many industries such as retail and online commerce, energy, utilities, health care and fast moving consumer goods. Against this back drop, a cloud-first architecture provides many advantages for logistics firms to achieve better customer experience in terms of speed, lower prices and the ability to track their goods, says data and analytics company GlobalData.

As IT systems start to flatten, logistics companies are beginning to explore new technologies to automate and streamline the supply chain to meet changing buyer requirements. Individuals and businesses expect low prices, faster delivery and more customization. There is a requirement for better end-to-end visibility such as real-time ‘track and trace’ integrated with supply chain management systems. This allows goods to be tracked at any point of time, and against expected arrival and route plan.

“Technology is rapidly changing the logistics sector in areas such as driverless cars and drones for doorstep delivery,” says Siow Meng Soh, technology analyst at GlobalData.

“Blockchain can also be tapped for smart contracts, compliance with Customs, such as chain of custody and authenticity of goods. There are also other collaborative and crowd-sharing platforms allowing businesses to share fleets and transportation networks and setting up code-sharing agreements, much like an airline, to help goods move from origin to destination.”

While customer demands increase, the expectation is often to keep within existing budgets. As a result, profit margins within the logistics industry are very tight. There are many other factors applying pressure to this industry including rising fuel costs, labour costs and higher focus on customer service.

Soh concludes: “Given these realities, a cloud-first architecture will be essential to reduce manual processes and handovers between multiple parties through collaboration and automation. It will provide the necessary platform for real-time pricing. The inherent ability to act on changing market conditions will enable providers to maximize profit margins and minimize risks that can be easily compounded down the value chain.

“Cloud ensures logistics providers have real-time monitoring capabilities to make merge-in-transit (MIT) possible where shipments from multiple origins are merged at a final destination. It is common for orders purchased online to come in multiple packages over several days. As the logistics companies expand into IoT, cloud services will also be used more extensively for compute, management, storage and security of data, to rendering new formats that are intuitive, user-friendly and accessible though mobile devices.”