Jarmo Reunanen: Logistics Trends 2020

Jarmo ReunanenThe strong growth of e-commerce has strongly changed the logistics market in recent years. Local operators must be able to compete against global giants with a diverse range of products, low prices and fast deliveries. A prerequisite for this is a new kind of digitalization of supply chains, which can create a winning customer experience and lower the total cost of deliveries.

A winning customer experience requires personalized e-commerce, fast and agile deliveries, and continuous delivery tracking. These consumer requirements are reflected at all levels of logistics. 

Key trends in logistics are:

  • Elastic Logistics
  • Digitalisation of supply chains
  • Work efficiency

In this article, I will discuss some of the key trends in this theme.

1. Elastic Logistics

Elastic logistics is a rising concept in the logistics field. It refers to the ability to expand, reduce and target delivery capacity, guided by the current market situation. In this context, local players have a key competitive advantage over global operators: The majority of the products are already placed in stores close to the consumer. If digitalisation of supply chains covers agile deliveries from stores, then  in addition to winning customer experience, you can achieve:

  • up to 35% cost savings in logistics
  • 50% lower carbon footprint of deliveries
  • 20% reduction in warehouse values

2. Digitalization of supply chains

Achieving the above-mentioned business benefits requires digitalisation across the entire supply chain. The focus is shifting to open communication of information systems rather than monolithic total systems. Product availability information is distributed to stores and warehouses, the delivery point for online orders must be decided as part of sales guidance, and the best shipping service, global or local, must be selected for each delivery. All these operators have their own information systems, which must be integrated into the same supply chain so that the consumer can be provided with real-time and transparent information on the progress of the delivery. Successful digitalization makes it possible to move from total service utilizing 3PL to multi-operator networking-based 5PLs.

3. Effectiveness of personal work

In the decentralized delivery model described above, the majority of the orders are handled by a person. Improving the work efficiency of warehouse personnel has a long tradition in WMS systems, but optimizing the order collection in stores is a new, growing need with its own demanding laws. Ensuring cost savings, delivery accuracy and speed requires one more loop for digitalisation of logistics. Namely, a collection system that utilizes both new technology and processes designed for the store, integrating not only traditional enterprise resource planning, but also other systems of 5PL operators: Storage Systems, Cash Systems and Transportation Services.

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AbakusInStore: Optimize order picking, sorting and packaging in stores

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