Digitization in Logistics

INTRODUCTION

With the exponential expansion of the e-commerce space, proper logistics management has become vital, especially to keep up with the fast pace of demand and supply. More recently, warehouses or fulfilment centers have been handling an unbelievable increase in the volume of goods. Transportation of goods has also become challenging following the need to transport and deliver goods in a timely manner without compromising on quality and safety. Some areas that cause concern to the logistics companies include:

• Increased transportation costs
• Manual errors of operators
• Loss or theft of goods
• Cyber security
• Regulatory requirements
• Expectations of customers

This paper aims at understanding how certain tools, devices and softwares leveraging Artificial Intelligence (AI), Blockchain, Big Data, Machine Learning (ML) and the Internet of Things (IoT) address the concerns of the logistics operators. It also presents examples of investments made and restructuring exercises that have occurred in the logistics space.

WAREHOUSING

Warehousing technologies aim at reducing costs, improving efficiency, automating repetitive tasks and streamlining operations. Optimization of warehouse operations and enhanced labor productivity that allows for seamless, fast and error-free functioning have been made possible by the application of technologies. Beside warehouse optimization, there are regulatory aspects to be adhered to in terms of maintenance of data regarding goods and other documents, in addition to quality control. A few warehousing automations that have aided the logistics sector in terms of speeding up processes and achieving higher accuracy and efficiency are discussed below.

DIMENSIONING SYSTEMS

Dimensioning systems have been leveraged to calibrate dimensional information (measurements) of the boxes/pallets and include the same in the warehousing receipt. Dimensioning systems allow the space in the warehouse to be utilized in an optimal manner. Integration of dimensioning systems with the Warehouse Management System (WMS) reduces errors in the entry of data and prohibits duplicity, since the data is simultaneously logged into multiple devices automatically. The dimensioning module includes the communication module, photoelectric sensors, mounting frames and Human Machine Interface (HMI)/ operator panels. The weight measuring modules consist of a weighing processor, a processor to control the conveyor and transmit the data to WMS, a strain gauge transducer for converting weight data to electric signals, rollers and profiles, and photoelectric sensors.

Figure 1: Dimensioning systems (Source)

One of the companies dealing with dimensioning is QubeVu, based out of Singapore with its research base at Cambridge. It has parcel dimensioning solutions such as QubeVu, DimStation 2.0, QubeVu Industrial; and Pallet solutions such as PalletPro Duo and PalletPro Quad. The solutions from QubeVu have aided companies like HP, IBM, NCR and Northrop Grumman to name a few. DimStation 2.0, for instance, is a parcel-dimensioning solution of QubeVu that can provide dimensioning for any solid, opaque object in any orientation, including cubes, tubes, polybags, and irregular, bundled or stacked items.

Features of DimStation 2.0 include: –

• Instant certified dimensions, weight and a picture of the parcel. The measuring scope includes irregular shapes such as tubes, polybags, and stacked items.
• High-productivity features include automatic triggering, forgiving alignment, irregular shape recognition, and intuitive software.
• Simple interfacing with scales, barcode readers, networks, and nearly all shipping
• Zero buildout, which means that it is ready for stand-alone operation or easy data-sharing with the company’s network right out of the box.

DimStation 2.0 is NTEP certified, making it suitable for legal-for-trade applications. The accuracy ranges within ± 0.2 in (5 mm) on cube-shaped items and ± 0.5 in (10 mm) on irregular shapes.^[1]

Figure 2: DimStation 2.0 by QubeVu

UNMANNED AERIAL VEHICLE (UAV)

Drones assist in locating cargo and in stocktaking operations. They assist in intralogistics, first and last mile delivery and in surveillance. Drones that are specifically used for warehousing are equipped with sensors, Radio Frequency Identification (RFID) technology, cameras and barcode scanners. These aid in increasing efficiency of warehouse operations and monitoring, and also in retrieving accurate data. Drones are also leveraged for surveillance of premises for detection of any anomaly such as fire, gas leakage and other such hazards in the warehouse. With apt battery life, a drone can provide more hours of work as compared to humans, thus leading to increased productivity and efficiency as a whole. The European Union (EU), the United States (US) and numerous other countries have framed regulations to provide a workable space for drones commercially.

E-Commerce companies such as JD.com and Alibaba have been utilizing drones in transporting packages within China since 2016. Amazon’s fleet of Prime Air drones was designated as an air carrier by the Federal Aviation Administration in August 2020 by being awarded the Part 135 Air Carrier Certificate. In September 2021, Kaman Corporation launched a medium lift expeditionary UAV specifically for the U.S Marine and the U.S Armed forces.^[2] The system is expected to self-deploy with no payload up to 523 nautical miles and with a maximum lifting capacity of 800 lbs.

Figure 3: Drone in a warehouse (Source)

AUTONOMOUS GUIDED VEHICLES (AGV)

AGVs have been considered suitable for transporting goods inside and outside a warehouse. They are also being used in keeping track of inventory and locating cargo. AGVs can be integrated with WMS, conveyors and Automated Storage and Retrieval Systems (ASRS) to tap the optimal benefit. AGVs operate utilizing Automated Guidance Systems that informs the AGV Management System regarding its positioning.  This navigation is carried out by incorporating 2D & 3D LiDAR, magnetic sensors, cameras etc.^[3] The type of AGV required to be leveraged depends upon the constraints faced in the warehouse and the budget availability. An interesting system that enhances the competency of AGVs is the Blind Spot Detection System (BSDS).  ‘Blind Spots’ are the areas that are close to the vehicle and are not within the periphery of the driver’s vision. Movements in these spots can lead to accidents, hence BSDS are installed in order to avoid accidents. BSDS function on lasers, radars, cameras and sensors that alert the driver in the case of any movement in the Blind Spot. BSDS can be integrated with Vehicle Management Software (VMS) to keep data of the events recorded.

SCANNING BASED TECHNOLOGIES

• RF Scanning based barcode technology:^[4][5] Warehouses may apply 1-dimensional symbology (using vertical lines) that can be either numeric or alpha-numeric, or a 2-dimensional symbology (using boxes like the QR Code) for barcode labelling. USB handheld scanners and pen or laser scanners form part of first generation handheld scanners; and wireless industrial scanners, cell phone cameras and smart phone apps are part of second generation handheld scanners. For the type of labelling to be implemented, there are a number of options to select from, depending upon the suitability of the warehouse operations. For example, Single Level Labels that are in the form of rack labels, are available as standard polyester type, which provides protection from potential hazards.^[6] They are designed to withstand the extreme handling and movements in the warehouse environment. They are also tear-resistant. Wrap-around labels work best for long range scanning applications (50 meters or more). Multi-level labels use color coding to identify different tiers while scanning.

Körber (formerly known as Voiteq),^[8] provides the Pick-to-voice technology for warehouse operations through VoiceMan Warehouse Execution System (WES). The benefits of VoiceMan include increased productivity, reduced error rates, improved customer service and lower operating costs.

Figure 6: VoiceMan WES being leveraged in stock picking

Benefits of a VoiceMan-enabled operation include increased accuracy up to 99.99%, improved productivity by 10-25%, full operational visibility & control to reduce training time by 50%, greater worker health & safety, reduced operating costs, improved customer service and reduced administration Return on Investment (typically in under 12 months).^[9]

WEARABLES

Wearables are smart devices that are leveraged in a warehouse for various purposes. Wearables also aid in monitoring the physical activity, health and location data of the workers. Kinetic,^[10] a US-based company has developed a wearable called Reflex that helps in avoiding workplace injuries.  A sensor attached on the belt of a worker tracks irregular physical movements, identifies risky postures and alerts the worker through vibrations. This data is also accessible by the managers through their dashboards and they can be alert about the safety of their employees and avoid workplace injuries. Software analytics platform allow the data to be comprehended to attain information.

Figure 7: ‘Reflex’ by Kinetic

For workers who locate and move items, Honeywell Intelligrated,^[11] offers a wearable solution that helps receive instructions and carry out tasks accurately. The wearable consists of a headset and a hip-strapped device. The instructions are provided via the headset and the hands-free solution allows them to perform accurate pick-ups in the warehouse.

TRANSPORTATION

Transporting goods is an imperative part of the logistics industry. The transportation of perishables using sea, air or road requires great caution in terms of providing the appropriate requirements with respect to temperature and humidity for the goods in order to avoid damage. Also, judicious utilization of the carrier space is important, with fuel costs rising, and carriers need to make the best use of space in every vehicle and in every trip. Near real-time cargo traceability or supply-chain visibility and optimization is also possible due to application of technologies like RFID, barcodes, cellular, satellite and other IoT-enabled devices. Technology also finds its place in developing devices and methods that aid in determining the cargo condition during transit. Cargo condition and quality monitoring are essential for quality assurance, compliance, and logistics performance monitoring and optimization.  Cargo condition monitoring shows the condition of the cargo while in transit, protecting high-value and sensitive cargo, ensuring product quality or freshness.

For instance, Arviem,^[12] a real-time cargo monitoring service provider, extends technology to understand the extended supply chain and reveal optimization potential for reducing cost and achieving operational efficiencies. Arviem leverages a cloud-based analytics platform to gain valuable insights on the supply chain visibility. The advantages, in a nutshell, include reducing demurrage costs, optimizing logistics processes, increasing cargo security, reducing inventory levels and monitoring cargo condition and quality.

SMART DEVICES IN TRANSPORTATION

Smart devices equipped with sensors and networking capabilities are leveraged in transportation by the logistics industry. The interconnectivity of these devices has led to the generation of a vast amount of data that provide information to the logistics companies and their customers. IoT in logistics is utilized to not only get connected, but also arrive at decisions and, at the same time, get prepared for the future. Means of connection of IoT may be ‘Active’, such as when real-time data is being sent in order to facilitate better monitoring of the goods; or ‘Passive,’ when the data is fetched at certain instances- for example, receiving data when a barcode bearing object passes through a barcode scanner.

• Tracking and detection: – Smart sensors, customized dashboards and GPS trackers (including advanced forms of GPS, viz. geo-fencing and Automatic Vehicle Localization System in vehicles) aid in collecting real-time data about a vehicle’s position, amount of fuel, driving behaviour and pattern, temperature and humidity within the vehicle etc. Monitoring capabilities reduce the instances of late delivery, damaged goods, pilferage and theft. Tracking helps in providing real-time data that allows planning for onward schedules, enabling better fleet management. Not only logistics and transportation companies, but also customers benefit from the tracking features in terms of being updated about the location of the shipment or cargo and time of delivery.

Smart sensors are equipped to recognize temperature changes, shock events or any damage to the container that may pose a threat. Mapping most efficient routes and maximizing fuel usage is another positive outcome of leveraging IoT.

Sensors such as Automatic Detection and Data Capture (ADDC) and RFID are also used to assist in the process. To detect the position of goods in a vehicle, microchips in the RFID sensors emit radio waves or create an electromagnetic field, which provides relevant information on goods bearing a tracking tag.

Figure 8: IoT in Transportation (Source)

Maersk, an international container transportation provider leverages IoT to track and monitor its fleet of over 38000 refrigerated containers. This allows its customers to take note of the condition of the containers on a real-time basis, ensuring the safety of their consignment.

• Maintenance and management of fleet:^[14] Fleet maintenance is another area where IoT is leveraged. Data is received regarding any wear and tear occurring in the vehicle. This helps in planning maintenance and repair at an early stage where the cost incurred will be minimal. Patterns of any recurrent error can also be detected that helps in appropriate execution. Such information can be utilized for insurance purposes on the occurrence of an event, if any. The data available on a real-time basis can help the insurers to assess the damage better and get a true and fair picture of the event. Fleet Management Software (FMS) and Vehicle Management Software (VMS) are cloud-based or standalone applications that can be integrated with telematics unit to manage the fleet. FMS captures and sends data pertaining to the vehicle or fleet to the operator or manager who tracks these vehicles.

Figure 9: Basic Fleet Telematics Setup (Source)

• Smart containers: Smart containers allow monitoring the condition of goods and the temperature and other details of the shipment or cargo. They may also be programmed to automatically adjust the levels of temperature, humidity, weight, luminosity etc. if the levels deviate from the safety mark. This is one way of performing quality checks during transportation.
• Network Video Recorder (NVR): NVRs are leveraged for vehicles that need to operate in harsh environment. These devices enable the VMS to access live and recorded video feed when needed. NVRs are also capable of sending event-based alerts to the VMS software, enabling connectivity. GPS sensors and G-sensors are integrated into the NVRs to enhance their utility.

SMART CONTRACTS IN LOGISTICS

Smart Contracts, being digital and immutable in nature, ensure securing the terms of an agreement, protecting the parties from fraudulent changes, capturing default in payments and assisting in auditability. Leveraging Smart Contracts allow the tracking of the shipment/cargo by storing the information in the distributed ledger of the Blockchain, augmenting its traceability. On the fulfilment of the predetermined terms, the Smart Contract is executed. This automation in the trade has paved way for faster payment in comparison with paper-based Letters of Credit.

Walmart, together with IBM, had started two proof-of-concept projects in 2018 that included tracing mangoes and pork. The Hyperledger Fabric blockchain-based food traceability system allowed uploading certificate of authenticity to the Blockchain for pork in China. In the second project, Walmart, IBM and Tsinghua University leveraged Blockchain and IoT to detect mangoes shipped from Mexico to the US. The result was the reduction in the provenance time from 7 days to 2.2 seconds.^[15] The products were labelled with numeric identifiers, and each checkpoint was logged and signed before shipment. Pharmaceutical companies are required to implement unit-level tracking by the year 2023 as per the Drug Supply Chain Security Act (DSCSA) in the USA.^[16] The DSCSA directs the FDA to establish national licensure standards for wholesale distributors and third-party logistics providers, and requires these entities to report license and other information to the FDA annually. Quoting from the FDA brief dated June 03^rd, 2021 regarding the guidance documents on supply chain for drugs:^[17]

“As part of the DSCSA, manufacturers and repackagers are required to put a product identifier on drug packages. This includes the product national drug code (NDC), serial number, lot number and expiration date on each package and homogenous case of product, in human- and machine-readable form. The machine-readable form is generally a two-dimensional data matrix barcode.”

GlaxoSmithKline leverages a Blockchain-based supply chain platform to ensure quality control and availability of products with the vendors.

BIG DATA

Big Data plays a vital role in facilitating data-driven decisions through data analytics. The influx of data is of value only when the logistics players can derive some material information from it. This information that the analysis provides aids in future planning of the resources based on prediction of future demand, preventive maintenance, optimization of warehouse maintenance etc. The source of the data can be from operating systems, order data, barcodes, robotics, location information or website browsing patterns to name a few. Big Data can be leveraged well when the software and hardware are upgraded, favorable computer infrastructure is put in place and leveraging of data-intensive technologies is accomplished. This should be coupled with ease of scaling as technology keeps getting upgraded.

Last mile analytics forms a major part of the data analytics where smart devices and GPS allow deriving information regarding speed of the delivery, understanding of the parking spots, type of vehicle that is functional for a particular area etc. This optimization helps the logistics companies to avoid late shipments, which adds to the reputation of the company. Extra costs can be cut down by examining the best route for delivery and judicious utilization of carrier space. To provide a better perspective, a media house recently released information that United Parcel Service (UPS), achieved a sizeable advantage by having a “left turns only when absolutely necessary” strategy for their drivers. It was observed that by taking fewer left turns, lesser fuel was used, resulting in lesser emission of carbon dioxide and more effective deliveries. UPS also opted to reduce their number of operating trucks by 1110, which lowered the distance travelled saving money for UPS.^[18]

INVESTMENTS

With the logistics space gaining traction, investments and restructuring have increased in the industry.

• In September of 2021 FedEx Logistics,^[19] a subsidiary of FedEx Corporation strengthened its global operations by opening their office in Korea. With the aim to provide a one-stop solution in logistics the new FedEx Logistics in Korea will be equipped to deal with international air/ocean cargo services and customs brokerage arrangement, along with other value-added services.
• In another event in September 2021, Delhivery,^[20] a logistics firm that provides transportation, warehousing, freight, reverse logistics, and other technology services, received $125 million as additional capital from a fund named Addition. Delhivery also raised $277 million from Fidelity in May of 2021 and $100 million from FedEx Express in July of 2021.
• With a valuation of around Rs. 8500 crores, JM Baxi, an integrated logistics services and transportation conglomerate, plans to roll out an Initial Public Offering (IPO) in order to raise Rs.2000 – Rs.2500 crores early next year. This capital is planned to be utilized in debt repayment and further expansion.^[21]
• The supply-chain platform project44 acquired Convey, a delivery experience management company, in September 2021. This acquisition leads to linking of more than 880 global shippers and third-party logistics providers comprising a network of 113000 carriers, 2.6 million assets and more than 9 billion shipments.^[22]

PATENTS

A few patents in the logistics sector are listed below:-

• US20190303866 assigned to Bluesignal Corporation describes a method of providing information about a logistics delivery route by using future traffic information. The method works on generating future traffic information based on the real-time information of traffic and finding the routes and the time that would be required by the logistics personnel to deliver the goods via that route. The information will keep getting updated on a real-time basis to assist the personnel to find the fastest route to deliver.
• US20210133672 filed by Chiu Ming Hsien leverages smart storage equipment for smart logistics system. The smart storage equipment has a base device and logistics container that can be installed on a vehicle. This patent solves the issue of delivery of wrong goods and ensures the safety of the goods during delivery. It involves locking of the container to a storage structure until the final destination to ensure the integrity of the goods. The unlocking is based on the container-release data that is stored in the database.
• US20210337349 filed by FEDEX Corp Services Inc., deals with motion-based management of logistics containers. The motion sensor allows to detect movement of the container and compares it to the previous recorded status (stationary, moving, accelerating, decelerating etc.). This is mainly useful where there is a congested landscape of nodes and it strengthens the inter-node communication for better functioning. The methods and techniques suggested in the patent aims towards improving the wireless logistics node technology used to track and monitor items being shipped and communicates more effectively with other node elements based on detected motions of a logistics container.
• US20210270514 filed by Sharp Kabushiki Kaisha discusses the use of cold storage packs in transporting objects at low temperatures. The cold pack is designed in order to deliver uniformity in the fill density, thereby keeping the temperature constant throughout the container when propped up on a side of the container. This aims at solving the issue of not having uniform temperature throughout the container and also using a cold pack that would occupy the least space required.
• US20210323767 filed by Beijing Geekplus Tech Co Ltd. is regarding a transferring robot, that has been configured to render better space utilization and efficient warehouse transfers. It makes the process of transferring items in a warehouse effective in terms of the robot being configured to move along adjacent lanes in the warehouse and for it to extend or retract horizontally while fetching the items. The robot has been built in a way to improve space utilization of the warehouse and efficiency in transferring a target case.

CONCLUSION

Factors such as being agile, quick decision-making capabilities by the management, aligning resources as per changing requirements and being ‘digitally fit’ are likely to be the major determinants for success of logistics companies. With shortened product cycles and changes in demand, warehouses often have to be built in a way to be able to adapt to these changing demands. Micro-fulfillment centres have come into existence that fulfill consumer needs in a shorter span of time. Last mile delivery is an area that has been gaining momentum and is being restructured and re-assessed according to the dynamic demographic requirements. It is observed that the success of last mile depends upon managing localized delivery, providing flexible-delivery options, building better connected networks and catering to seasonal logistics and adapting to evolving technologies. Last mile delivery is an area that demands most attention, considering that it accounts for almost 30 % of the total delivery cost. External factors like traffic, weather conditions and accidents cause unexpected disruption in the flow of the last mile delivery. Since delivery disruptions cause negative impact to the reputation of the brand, solutions need to be found to minimize the ‘damage’ caused by these disruptions. A step towards finding the answers lies in investing in finding innovative technology and collaborating with technology startups and companies that are competent enough to find viable, cost-effective solutions.