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The Impact of Industry 4.0 on the Logistics Sector
The Impact of Industry 4.0 on the Logistics Sector

March 31, 2022

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Introduction

In general, Industry 4.0 circumscribes the development and integration of innovative information and communication technologies into the industry. The agenda is to promote the networking of products and processes along the value chain, allowing it to use organizational processes more efficiently in the formation of goods and services to increase customer benefit by offering them the best products and services. The evolvement of the cyber technologies and their integration into digital ecosystems of all industry value chains leads to the disclosure of the fourth industrial revolution, named “Industry 4.0”. This was introduced at the Hannover Fair of Industrial Technologies, in 2011. Since then, many companies started to develop solutions in accordance with the concept of Industry 4.0.

The defining feature associated with the fourth industrial revolution is the intelligent networks based on cyber-physical systems. Cyber-physical systems (CPS) incorporate sensing, computation, control, and networking into physical objects and infrastructure, linking them to the internet. As is the case for most industries, logistics sector businesses are facing sustained change, driven by software disruption and the impacts of new technologies on supply chains globally. This has created a rapid shift in processes to assist the fundamentals of Industry 4.0 also known as the digital transformation of traditional industries into the modern age.

Factors Affecting Industry 4.0

Industry 4.0 is acting as a driving force for shaping the future of the global supply chain. Four factors that affect industry 4.0 are interoperability, information transparency, technical assistance and decentralized decision-making. It consists of technologies including advanced robotics and AI, sensors, data analytics, 3D printing, cloud-enabled business models, high-powered mobile devices and algorithms to direct motor vehicles. Much advancement in these technologies includes real-time navigation, ride-sharing apps, autonomous vehicles, and last-mile delivery services, enabling advanced interchangeability across companies, countries, collaborators, and competitors

Integration of Industry 4.0 in the Logistics Sector

Logistics consists of the flow of things between the point of origin and the point of consumption to meet the needs of customers or corporations. The five major technological advances that are changing the future of the logistics industry are:

  • Shipment Tracking Systems

Previously, the customer booked dispatch and was provided with delivery details, and they only had to wait a certain amount of time or call to get the details. Today's the internet and software advancements have made it easier for customers to access shipping and tracking systems 24 hours a day. This not only improves the user experience, but it also saves the company time and money. It improves usability and allows them to monitor and track their shipments. It examines shipment notifications and messages, customizable reporting, and customer accounts with cargo-specific information.

  • Internet of Things (IoT)

The Internet of Things (IoT) provides connectivity through the Internet or smart devices that share prominent information and data with each other and with other remote digital platforms for real-time decision-making by the user or by other smart devices through machine-to-machine (M2M) communication. Sensors are built into cabs, cargo ships, trains, etc., and connect to an alarm system or dispatcher that is monitoring and tracking. These sensors process and transmit the information to the crew who then gains insights. Although IoT isn’t whole new technology, it continues to impact the future of logistics, allowing for a more accurate in-transit visibility and delivery of goods.

  • Radio Frequency Identification (RFID)

RFID technology has been used for a few years to track inventory in businesses. A tag or sensor is placed on the product and radio waves are sent out from where data is received and processed by the company. Barcodes are similar to RFID tags, but the faster speed of information delivery and data processing of RFIDs is more appealing to businesses. Today, many companies have started using RFID tags in their distribution warehouses to monitor containers.

  • Autonomous Trucks and Drones

Technology is making it possible to receive our orders from flying drones. Autonomous vehicles are already a reality, and trucks are not far behind.

  • Enhanced GPS accuracy

There was a time when we take out printed directions from the computer before leaving the house. In today’s times, everyone is using GPS whether from cell phones or built-in vehicles. The accuracy of these devices has significantly improved throughout the years improving the supply chain businesses. The advanced accuracy of GPS allows for increased productivity and satisfied customers, by tracking trucks’ locations and providing an easy path through access to updated traffic data.

Conclusion

The ongoing technological changes associated with the fourth industrial revolution have the volume to transform the world, affecting all areas of daily life, including the production system and forms of work. As logistics is serving as a transition in today’s world, new tools and knowledge are needed to ease the adaptation to the new technological environment. Technology is not an end in itself, but a means to improve the ruthlessness and sustainability of the logistics operations needed to satisfy current demands for development with intergenerational equity. The technologies discussed above aim to reduce costs and improve decision-making, as well as to promote the traceability and security of shipments and information, thereby increasing trust among actors, reducing bureaucracy, and promoting administrative transparency in order to create value-added and profitable services in the region. 

It is imperative to address the challenges raised by the new approach. There is a need for data privacy protection policies that are compatible with the development of technological solutions that assist information by leveraging the potential of artificial intelligence, big data and other technologies to develop and market new data that enable business models and opportunities encouraging open solutions in addition to established architecture. As technology advances, cyberattacks become more common as cybercriminals employ various strategies and technologies to exploit vulnerabilities, so logistics must learn to address this issue and incorporate it into the risk model. Technological progress demands a revision of the current business model. All these changes altogether had a cultural shift in logistics governance.


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