Start Building Tomorrow’s Supply Chains Today

Jan. 9, 2014
If it were just about automation, it would be easy. But what supply chain professionals must accomplish starts with our role as educators.

Many supply chain and logistics experts are floating a vision of a future that, at first glance, may seem improbable: a world where unmanned vehicles transport cargo to and from global megacities that are supported by a highly automated workforce and run by the power of big data.

Crazy? Maybe, but maybe not. After all, we scoffed 25 years ago when The Jetsons showed people talking via televisions, and today, we can share “Face Time” across the world from the palm of our hands.

If our future is heading in this direction—and I think it is—transportation and logistics professionals will play an integral role in shaping and supporting this new world. As such, we must embrace a massive paradigm shift in how we think about infrastructure improvement and development via technological innovation. Transportation management theories, strategies and philosophies must change at an accelerated rate for us to meet the demands of the future.

Megacities Bring Mega Change

To me, the prediction most likely to come true is the rise of megacities. Commonly defined as metropolitan areas with a total population in excess of ten million people, megacities like New York, Tokyo, Mexico City, Chicago and Shanghai are poised to continue growing while new megacities—largely in lower-income areas like Asia and Africa—are likely to emerge.

As supply chain professionals, we need to be attuned to this dramatic change for a variety of reasons. The sheer population density associated with megacities raises several issues that we need to be cognizant of as we develop future supply chain strategies and policies.

Congestion goes hand-in-hand with megacities and causes many challenges for the efficient distribution of goods and services. If most of the demand for the consumption of goods and services comes from these highly congested megacities, how will we properly service those areas? How will we navigate around constantly gridlocked cities—and do it in a way that doesn’t involve emissions spewing from vehicles sitting for hours in traffic?

Infrastructure challenges associated with megacities bring several other questions to the forefront for those concerned about the future of logistics. How will our rapidly aging infrastructure handle the increasing freight volumes needed to serve the world’s growing population while also meeting increased demand for sustainable transport options? How can we transform the transportation infrastructure so it will support the development of megacities rather than hinder growth?

We also have to be concerned about how congestion and infrastructure challenges will affect growing demand from citizens in those emerging megacities—for everything from consumer goods to food and supplies to energy and clean air and water. Shortages of food, supplies and other essentials are more likely to occur in the wake of the continual population growth associated with megacities, as well as the predicted natural disasters associated with climate change.

Over the past few years, we have endured a Superstorm that crippled the New York City Metro area, a tsunami that devastated Northeast Japan and a hurricane that brought New Orleans to its knees, as well as countless floods, landslides, and forest fires. All of these proved the importance of the supply chain in restoring the normal flow of daily life. If these climate trends continue—and worsen, as is likely—we must have more effective means of protecting infrastructure and preventing the human impact as well as the production downtime and supply chain disruptions connected to these events.

As the world population grows, the climate changes and natural resources become limited, we will need to create supply chain solutions that address these issues. Technology will be key.

Turning to Transport Technology

Unmanned transportation may be one of these solutions. Freight drones and robot-operated trucks may become common modes of delivering goods. Furthermore, we are not far away from discussing the use of underground railroads to mitigate congestion.

We also need to consider ideas for faster, smarter, environmentally friendly transport options for both freight and people. Take the Hyperloop, proposed by serial entrepreneur Elon Musk. It would run on an elevated tube built between two cities. Passengers and cargo inside pods could be shot back and forth inside the tube at speeds reaching 800 miles per hour. Think about the efficiencies gained when a trip from Los Angeles to San Francisco takes 30 minutes!

Concepts like ridesharing are also gaining traction. Companies including Lyft and Sidecar are helping facilitate on-demand, social transportation options that allow riders to share cars—a congestion-reducing approach that could become crucial for life in megacities.

We must change how we approach logistics and supply chain methodologies to better work within these new mega population centers. It will be more effective and efficient to locate distribution hubs at city peripheries and then make short-haul, last-mile deliveries within the megacities. Logistics providers will need to create innovative urban logistics solutions to meet this demand. I believe green-friendly high-speed rail and other intermodal cargo transport modes will become the best way to haul goods from one megacity to another. These transport planning strategies will play a key role in building sustainable urban areas.

It will be necessary to make drastic changes to infrastructure and develop new, more efficient traffic concepts. Technology development can and will improve centralized efficiencies in traffic management. Sophisticated mapping systems, for instance, will help vehicles take traffic into account when planning the fastest and most effective routes.

Ever-improving rail technologies will contribute to traffic efficiency by pulling more freight away from over-the-road transportation. With a tech-driven increase in the ability to handle fragile items and temperature-controlled goods, rail will continue to become a more viable option for many shippers, helping to redistribute traffic flows and cut down on congestion.

The Rise of Automation

Another prediction I believe will come true in the not-too-distant future is the shift from industrialization to automation. Automation will help us meet the growing need to react quickly as the world continues to focus on real-time decision-making.

Today, warehouses and manufacturing facilities already use robots on production lines and in picking and packing operations. The use of automation will continue to grow as we intensify our focus on maximizing efficiency in the workforce. And as we continue to improve our ability to capture and use data from myriad sources, automated systems will become ever more precise and customized.

Megacities won’t be able to function without automation. Complexity will only increase, and we will need to harness big data to make decisions in real-time. For example, we’ll use geo location to avoid traffic jams and automate optimal routes.

The automation of public transportation will be another important factor supporting the growth of megacities—and in easing the congestion that would otherwise hinder freight flows. Driverless buses moving on electric tracks would free up road space for freight and allow for safer, less congested routes around the megacities. The same goes for increased use of automated elevated trains and monorails, such as the ones already used at several U.S. airports.

While some of these scenarios may appear far-fetched, their reality is not as distant as it seems. We need to think now about the long-term planning required to develop innovative solutions. And we must be ready for the financial, economic and social impacts of the changes to come. Our cities need to think ahead to assess population density trends and their impact on our existing way of life and we need to embrace technology and automation to help our value chain evolve

As members of today’s supply/value chain, transportation and logistics communities, it is our moral obligation to collectively consider how we can make a positive contribution to society and the evolution of its people. We must imagine the future, foresee potential issues we will face and define a supply chain infrastructure that will support this new way of life.

Robert Nathan (@logisticsnerd) is co-founder and CEO of Load Delivered Logistics, based in Chicago.

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