Logistics 4.0: SCM in Industry 4.0 Era
5. Conclusion and Future Direction
This chapter introduces an extensive review of logistics, its changing patterns within the Industry 4.0 era, and its role in the digital transformation in SCM. The historical development of ICSs, the evolution of logistics, the interaction between Industry 4.0 and smart logistics, and potential challenges of Logistics 4.0 are broadly discussed.
Logistics is one of the core pillars in the value chain for suppliers, manufacturers, and retailers since they cannot be competitive in the market without getting the right good at the right time in the right place. It is getting more difficult to fulfill these requirements as logistics networks become uncertain and volatile. New methods, technologies, and services are required by companies as the complexity increases in logistics networks. Many challenges and opportunities for logistics emerge as a result of today’s consumer behavior. Therefore, the shift from traditional logistics to new logistics solutions is inevitable. Industry 4.0 will transform and improve the traditional logistics and its self-perception (Wang 2016). Logistics 4.0 is a complex system composed of many emerging technologies that are connected and able to communicate with each other, and it is responsible for fulfilling customers’ needs and meeting the requirements of increasing complexity in logistical operations. Logistics 4.0 is an element of Industry 4.0 and these two cannot be thought of as independent from each other (Wang 2016).
As an element of Industry 4.0, Logistics 4.0 creates possibilities for new business models. Instantaneous information exchange, computerized business solutions, and real-time big data analysis capability are some of the features that companies enjoy as a result of adopting Logistics 4.0. The combined use of all these features of Logistics 4.0 is changing the way
companies do their business. Today, service-oriented businesses, where the customer involvement starts at the product or service design stage, are at the focus of the companies. This transformation is expedited by the Industry 4.0 technologies such as CPS, IoT, IoS, smart products and smart processes (Strandhagen et al. 2017b).
Traditional logistics will undergo a transformation as Industry 4.0 takes over today’s conventional production process in use. This change in logistics will not be easy or effortless. However, it will substantially change the way companies perform their logistics operations and improve process efficiency, productivity and customer satisfaction. Companies who embrace Logistics 4.0 will gain a competitive advantage since Logistics 4.0 will equip them with a flexible, sustainable, and highly responsive supply chain. Transforming conventional logistics systems into smart logistics systems and optimizing the logistics process will lead to agile supply chains, improved cost-saving, higher customer service levels, and satisfaction.
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