Smart Logistics (Logistics 4.0)...& Supply Chain Management profession and expansion of...

Smart Logistics (Logistics 4.0)Optimizing Logistics Chain Intelligently

Krishan K. BatraISM-INDIA

Krishan K. Batra has diverse & global experience of 4 decades in the field of Technology & SCM. He enjoys engaging people in sustainable transformation and inspiring business excellence. In his last assignment with UN organization as Chairperson of the supply chain, he was instrumental in re-engineering business processes and implementing ERP worldwide.

He started his career with TATA Group after completing M.Tech from IIT Delhi. Later he completed MBA from Syracuse University in USA. Krishan has worked in Switzerland, Denmark and USA in different capacity. He is the founder of UNSPSC which is global standard for coding goods and services. He has worked with many organizations to optimize supply chain and build their professional capacity. Presently he is heading ISM-INDIA as its President & CEO.

Introducing the Presenter...

• Institute for Supply Management (ISM-INDIA) is an affiliate of ISM,USA, which is oldest and largest organization in the world.

• Aims at providing opportunities for promotion of Procurement & Supply Chain Management profession and expansion of professional skills and knowledge.

• Agreement with ITC, Geneva ( A UN Organization) and the World Bank to provide best in class certification in the field of Supply Chain Management (SCM).

• Our Mission is to lead Supply Chain Management and transform Supply Chain for value creation.

• Headquarter in Gurgaon and Chapters and Test Centres in all major cities of India.

Introducing ISM-INDIA

Learning Objectives

Overview of NextGen Logistics (Smart Logistics)Understanding the concept of Logistics 4.0 & Industry 4.0Vision of INDUSTRY 4.0What is digitization and digitalizationDigital Logistics FrameworkTraditional vs. Logistics Supply Chain Control TowerTechnologies Enabling Change in LogisticsFuture of LogisticsChallenges

Key Objective: To optimize Logistics chain

intelligently.

There is lot of confusion about the term “Logistics”. Some consider it as transportation activity and other call it Supply Chain. Broadly this is about flow of goods & info.

What is Logistics?

It is the path of goods and information from point of origin to point of consumption. It covers functions like Planning, Transportation, Warehousing, Packaging, Handling, Distribution and Security. Involves either tangible or intangible goods or services, it is the entire path which results in revenue for a company. Hence calls for efficient movement of important materials from one place to another. Logistics can be defined as the art of managing the supply chain and science of managing and controlling the flow of goods, information.

What is Logistics Chain?

Logistics Chain

End-to-End Data Transparency

Logistics Chain

Exponential Growth

• Transportation and logistics sector employs around 7.3 million people.

• The number is expected to increase to about 25 million by 2022.

• Transportation and logistics companies will need to find more than 17 million more workers over the next 10 years.

• This is an enormous challenge, particularly considering that the logistics sector is already struggling to find workers with the requisite skills tohandle the entire supply chain.

SIZE OF THE INDUSTRY…

SCENARIO

Share of Logistics Cost in total sales

Logistics Cost

Share of 3PL

Overview of Logistics Chain: India

• Today’s Logistics chains are a series of discreet, siloed steps involving Suppliers, manufacturing, distribution, and eventually customers.

• Business Environment characterized by Increased volatility, uncertainty, complexity & Ambiguity (VUCA)

• Over the next five to 10 years, supply chains will change dramatically.

• Digitalization will change that, bringing down walls and creating a completely integrated ecosystem that is fully transparent to all the players involved.

• This ecosystem will depend on several key digital technologies—including logistics platforms, analytics, robots, and even IOT .

• Those who move quickly to digitize their logistics chain will gain efficiencies and create competitive advantage.

Evolution of Industry

Industry 4.0 was coined in 2011 by a German initiative by the Federal government in association with some of the universities and private firms to increase productivity and efficiency in the manufacturing sector like Make in India.

Industry 4.0 is the process of embedding intelligence and connectedness in manufacturing and supply chain to provide satisfying products and services. Americans prefer to call this concept- smart factory and Europeans call it- Industry 4.0“Cyber-Physical Systems (CPS) are integrations of computation, networking, and physical processes.”

What is Industry 4.0?

VISION OF INDUSTRY 4.0

Overview of Industry 4.0

9 Pillars of Industry 4.0 Technologies

DIGITAL SUPPLY CHAIN

Digital Supply Chain

Evolution of Logistics 4.0

Digital Journey

• Digital transformation is buzzing everywhere. • Government of India has launched DIGITAL INDIA

Program to transform India into digital empowered society and knowledge economy.

• For many business people (Mainly Small & Medium Industries), it’s hard to identify whether digital transformation is a sink hole or a ladder.

• Above feeling is because of cost involved.• Some large companies have initiated major program

to make use of it as a ladder of growth.• For few it is becoming a Game Changer Tool.

DIGITIZATION

• Digitization makes it possible to share (collaborate), process (automate), and analyze (analytics) the information.

• A digital model of the global supply chain creates the ability to quickly and easily adapt to the real world (flexibility).

World Digital Competitiveness Ranking

Digital is about unlocking growth now. Being digital is about using data to make better and faster decisions, digital initiatives to deliver annual growth and cost efficiencies of 5 to 10. Digital revolution still in early days.

Digital Maturity

The emergence of a “digital client” (“connected customer”) causes more pressure on suppliers, demanding a better adaptation of quick and trouble-free delivery.

Evolution of Logistics

Digital Technologies

IoT + AI + RPA = The Future of Digital Logistics. an example of one of the best automation systems that the world: humans.How do these fantastic automation machines called “humans” function?

KEY TECHNOLOGIES

How do these fantastic automation machines called “humans” function?We use our eyes, ears and other sense to be aware of things around us. We use our minds to analyze and make decisions (almost instantly), and we use our limbs to react – a function that’s driven by the mind – sometimes so quickly that we don’t even know or realize that these three steps are happening in sequence — observation, decision, and action.One organ or function without the other can greatly cripple our ability to function effectively.

Analogy with Human Beings

The Internet of Things (IoT) is the eyes and ears of your supply chain!In technical terms, its nothing but real-time data collection and display.IoT technologies enable the collection of data in an automated or partially automated manner. Solutions like barcodes and hand-held RFID are examples of partial automation in data collection, while solutions like GSM are examples of fully automated data collection.

Internet of Things

1. IoT enables an enterprise to hear from its goods and assets.2. IoT provides the ability to know in real-time what is happening remotely.3. In supply chain terms, this means that you can get to know the location, and sometimes the condition, of your goods in a warehouse or in transit. Drawbacks of IoTThe IoT, at its best, is a real-time data machine with some analytics. It doesn’t have a mind of its own. It cannot think.IoT needs AI if it needs to turn into an intelligent machine – one that can learn from the data it collects, make interpretations, and decide the next course of action, just like humans do.

The Power of IoT

Artificial Intelligence (AI) is nothing but “intelligence” exhibited by a non-human entity, such as a system or a tool. Hence, the term “artificial”.In essence, it is your machine’s mind!Let’s consider the same example of the container stuck at customs, but now with AI acting based on IoT sensor data.So, why do you need AI when a human can do it?Because a human cannot do it 10,000 times a day, and with the same efficiency each time, not to mention that he or she will be bored!Many companies handle hundreds or thousands of containers a day, not one. . AI can decide what is right or wrong, and what you should do, but you need to give it limbs to do something about it. AI without the ability to act out remains “artificial intelligence” not “intelligence action.”

Artificial Intelligence

Robotic Process Automation (RPA) is the ability of a machine or software to perform a pre-programmed task repetitively, but with efficiencies many times higher than a human.RPA is commonly used in manufacturing and operations processes like invoicing, billing, reporting, and customer service.The power of RPAAn example of the power of RPA in supply chain would be automated procurements or delivery scheduling. Every time the inventory runs low, the machine re-orders goods from the supplier.

Robotic Process Automation (RPA)

Internet of Things (IoT) is about to revolutionize the logistics domain. Its use cases are:

Location management systems Inventory tracking and warehousing IoT technology and predictive analytics IoT and blockchain for supply chain management Self-driving vehicles Drone-based deliveryPlacement of RFID tags and sensors will allow monitoring of things such as product temperature and humidity, vehicle location and stages of the transportation process.

IOT: Use Cases

Tracking & Tracing Shipment

TRACKING DATA

Traditional vs. Digital Supply Chain

TRADITIONAL LOGISTICS CHAIN

With increased globalization, complexity in the supply chain is increasing, causing the company to experience.

• Difficulty in getting the right data in a timely fashion.• Challenges when using available data to make smart

decisions. • Lack of direction or involvement from leadership• Silo Mentality. • Transport planning (e.g., optimal dispatch quantities &

frequency of dispatch, vehicle routing, loading pattern in the trucks etc.) lacking.

The digital supply chain is where the central control hub oversees the whole supply chain using technological enablers such as a network of sensors and social technologies. This is than managed through an overarching data analytics engine. In the digital supply chain the supply chain control tower is the ‘heart’ of the control tower. It helps… Transparency: Provides complete view of SC. Communication: Info available simultaneously Collaboration: Increase in info sharing Flexibility: Changes in customer demand are rapidly acted upon,

improving the efficiency in the supply chain.

Responsiveness: Real-time responses can be implemented on planning

and execution level.

Digital Logistics Supply Chain

Control Tower Operations

DIGITIZATION

• Digitization makes it possible to share (collaborate), process (automate), and analyze (analytics) the information.

• A digital model of the global supply chain creates the ability to quickly and easily adapt to the real world (flexibility).

3 Pillars of Control Tower

Digital Logistics Framework

1. E2E Visibility: This increases transparency and visibility from digitization across the complete supply chain.

2. Smart Utilities: Involvement of technology in logistics utilities like smart containers and smart pallets are transforming traditional shipping workflows.

3. IOT Adoption: Involvement of technology in logistics utilities like smart containers and smart pallets are transforming traditional shipping workflows

4. Industry 4.0 Integration: Enhances technology like smart containers and utilities by connecting them to the cloud.

5. Better Living through Analytics: Data collection through RFID & Sensors help in analytics & make better decision.

Key Elements of Logistics 4.0

Logistics Chain

The time when it was enough to just move goods from point A to point B, passed a long time ago.

With high competition and multiple challenges, the main focus is made on customers, meeting their needs and expectations.

Now the top-priority objectives of logistics companies are to ensure just-in-time delivery, supply chain visibility, product lifecycle transparency and quality services.

To accomplish 7Rs is very complicated, there comes an increasing necessity in the use of innovative solutions to achieve goals.

Customer Centered Market

Transformation

KEY CHALLENGES OF DIGITAL TRANSFORMATION

TRANSFORMATION

When companies adopt Industry 4.0 methodology, they work digitally, harnessing the benefits of Big Data, Analytics, AI and Cloud Technology to work with connected devices and intelligent schedules. The result is a responsive operation with absolute control over its demand, inventory and production processes.

Higher Productivity Agile Processes Rapid Innovation Reduced Cost Increased Revenues Better workplace Improved Communication Customer Satisfaction

Key Benefits

Tracking Food from Farm to Fork

Digital innovation enables logistics players to drive efficiency and lower costs, as well as pursue new business opportunities.This transformation is leading to a new paradigm called “Logistics 4.0,” which is based on four key trends:

Logistics 4.0: Tomorrow’s paradigm

Logistics Roadmap

While Logistics 4.0 represents a significant value-added proposition but the key challenges business faces to reap full benefits are: Reducing Shadow IT and information silos Breaking free from past-oriented planning Ditching the spreadsheet

Of these hurdles, perhaps the most important is “ditching the spreadsheet.” Not only do planners wall themselves off and actually contribute to information silos by producing plans in Excel, they also counteract the mindset of open, transparent workflows that is crucial to success in the modern supply chain.

Challenges

THANK YOU!

For More Information visit

www.ism-india.org

orcontact me :

contact@ism-india.org

Tel: +91 99711 71220

What is Logistics?

a) It is about movement of goods.b) It is about movement of goods & information from

point of origin to point of consumption. c) None of above

QUIZ 1

Digitalization is the integration of digital technologies and data into all processes that can be digitized.

a) Yesb) No

QUIZ 2

Digitization is the process of converting records from paper form to electronic form.a) Yesb) No

QUIZ 3

IOT can be seen as an analogy for ears and eyes, which passes data to brain for analytics.

a) Yesb) No

QUIZ 4

AI refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions.a) Yesb) No

QUIZ 5

Blockchain is digital ledger stored in distributed network. It is useful for logistics for which of the following reasons.

a) Secure Databaseb) Smart Contractc) Transparencyd) All of above

QUIZ 6

WHAT IS RPA (Robotic Process Automation)?

a) It is a Robot.b) It is an AI.c) It is about workflow automation.d) They are digital workforce or assistante) None of above

QUIZ 7

Smart Logistics (Logistics 4.0)...& Supply Chain Management profession and expansion of...

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