Digitization in the movement of goods

New technologies such as Blockchain, Artificial Intelligence and IoT today also lead to disruption in the movement of goods and change global trade to a far-reaching extent.

Logistics is not just about delivering a package from the online retailer to the customer’s home. From the customer’s point of view, it is a fairly simple process. He orders the goods, a warehouse employee packs them into a box, sticks the address label on it and the package is packed into a van that then drives it to the customer. In many cases, however, the process starts much earlier, before or while the customer places his order in the online store. This starts with the fact that large online retailers have several warehouses spread across several locations. Not all products are always available everywhere, so when the product detail page is displayed, availability is often checked, and it is calculated when the goods can be at the customer’s site. You can often also enter your zip code here and availability in physical stores is checked.

Logistics is increasingly about efficiency and ecological action, and delivery routes must be planned as efficiently as possible. This serves both to shorten times and to save resources as much as possible.

In this article we want to give some examples of how disruptive technologies are increasingly finding their place in the logistics industry.

Artificial Intelligence

The use of AI is becoming increasingly important in the logistics industry. You can illustrate this with a relatively simple example. Computer scientists know the Travelling-Salesman-Problem, also known as Santa Claus-Problem at German universities. This is about finding the shortest possible route between individual points. This represents the optimal and fastest route for a traveling salesman to visit his customers.

In the movement of goods, the complexity increases by additional factors. For example, the loading capacities of trucks and containers must be used as efficiently as possible, based on the shortest possible transport route when more than one customer must be served. With AI-supported data analysis, volatile volumes and scarce resources can be effectively organized with tight deadlines. There are already several vendors in the SCM (Supply Chain Management) environment that offer such AI solutions. Oracle has come a long way here in fleet management and has been able to drastically reduce the application’s susceptibility to errors.

But even before a container or truck is loaded, AI can help to work more effectively. Some companies use distributed department stores, so that a customer order may have to be served from several department stores. Or different product categories may not be packed in the same box (e.g. food and cleaning products). Here, AI can be used to reduce the number of packages and make the best use of package sizes. The ecological aspect plays a major role here.

In the end, the use of AI does not only mean ecological advantages, but also a cost advantage and time saving for the manufacturer and in the end also for the customer.

Digital Twins

Digital twins are digital representations of tangible or intangible objects or processes. In the movement of goods, for example, they can be used to map the procedures and processes in an overseas port. This requires a good database that contains all data and movements in such a port. Examples are ship movements, deliveries, container operations, weather, water depths, etc. The whole port must be equipped with sensors that collect all necessary measurement data. This data is then fed into the digital twin and it is then possible to simulate all processes in the port on the computer and identify bottlenecks and problems. This helps to optimize the processes. As a result, energy costs can be lowered, and pollutant emissions reduced. In addition, the laytime of ships can be reduced and the arrival and departure of containers can be optimized. Every hour saved saves a high five-digit euro amount.

Digital twins make intensive use of AI to optimize processes.

Process optimization with the blockchain

Numerous documents are usually exchanged in goods traffic:

  • Shipping documents
  • Commercial invoice
  • Consulate invoice
  • Certificate of origin
  • Insurance documents
  • Forwarding Agent Documents

This often results in waiting times for the original documents in the supply chain. Blockchain technology (Hyperledger – an OpenSource technology) not only eliminates waiting times in this process, but also increases security. Manipulation of ownership or origin documents for freight is impossible and the resulting data is processed in real time.

The blockchain technology can also be used for financing. Thus, crypto currencies can be combined with smart contracts and automatic payments can be triggered. This is currently possible with Ethereum. But even outside of digital currencies, Smart Contracts can be used to control the payment process and automate regular direct debit procedures.

Spare parts thanks to 3D printing

3D printing technology has been evolving for several years. The process was invented and put into practice as early as 1983 as stereolithography. The first 3D printer was purchased in 1988 and the first home printers have been available since 2010. Over the decades, the process has improved steadily. The 3D printer is now capable of printing not only plastics, but also metals, food and even organs. This opens up enormous new possibilities for the movement of goods and logistics. Take, for example, a large overseas port, where metal parts are often produced by casting. These weigh several hundred kilograms or tons, like a ship’s propeller, for example. The production of a ship’s propeller by casting is an extraordinarily complex process and can take several months. With 3D printing, it can be done in about 200 hours. This allows ships to be repaired faster and more efficiently.

Another example is crane hooks, which have a weight advantage over cast hooks in 3D printing because they can be made hollow. This greatly reduces their weight, but they can still lift megatons. The time and material costs are reduced enormously.

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