The global logistics industry is estimated to be valued at around four trillion dollars. This value signifies overwhelming importance in the global economy. Logistics management plays a vital role in the success of the global industry. Logistics management entails planning, implementation and controlling of the backward and forward movements of goods, services and information between the sources and customers in the supply chain. Logistics also involves the storage of goods in the supply chain. The main aim of logistics management is to meet the consumers’ requirements and satisfaction. This brings about efficiency and effectiveness in the whole supply process through transportation, provision of accurate and useful information, appropriate inventory, warehousing, proper handling and packaging of products (Bowersox, 2007). For the customers’ requirements and operational efficiencies to be achieved, technology stands out as one of the greatest facilitators and improves global logistics management. Adoption of new technologies enables global logistics companies to increase handling capacities, avoid delays in the transportation of goods or information, achieve financial efficiencies through cost saving and create more jobs.
How Technology Improves Management of Global Logistics
Information in the supply chain is of utter importance in the effective management of global logistics. It is a requirement in the management process that information at each supply chain level is known to avoid inefficiencies and implement corrective measures to deal with such situations (Chan, 2005). This consequently results in saving operational costs. The creation of networked communication is another technological measure aimed at establishing a link between members of the supply chain through information. Consumers’ requirements in the market are highlighted and serve to increase the general output of a global logistics company and enhance the responsiveness of the company to any changes in the market. Website portals run by the logistics company come as another technological milestone in linking between the company and supply chain. Supply chain members can engage in ordering purchases while the company can post information regarding their products, shipping notices and participate in the generation of bar codes. Improvement of information services and creation of the information software between 1996 and 2002 resulted in a 5 billion dollar increase in sales revenues of logistics companies in the USA.
Information technology impacts considerably on the functioning of global logistics companies. The logistics companies implement advancements in I.T through tracking of cargo. It estimates that the industry incurs annual 30 billion dollar losses in cargo theft. Products are monitored through tracking technology and information on efforts to tamper with the products is conveyed to the company’s tracking systems. The tracking technology encompasses Radio Frequency Identification Tags (RFID) GPS loaded sensors and machine to machine technology (M2M) all of which are wireless technologies. These technologies not only serve to enhance the efficiency of warehousing and inventory procedures, but also make a substantial influence on staff participation and morale. In the evaluation of the effects of subjecting its truck drivers to the use of wireless technology in logistics management, a logistics company noted that drivers feel more engaged in making decisions and convey the information back to headquarters regarding their schedules. This resulted in improvement in the efficiency levels of logistics management. In addition to that, it prompted workers in the warehouses to spring out as a team in response to technology-identified problems in the inventory. In an international freight handling facility in Germany, the year 2007, there was a reported mix up of containers in the vast facility. A wireless tracking device attached to the containers aided the location of urgently required one. The purpose of wireless technology is to push workers towards time consciousness and observation in duties.
There has been significant progress in wireless technology responsible for the transfer of information.
D-Link Systems Inc has been directing its efforts towards wireless Ethernet by increasing the distance over which they work and the kinds of information carried. Nokia Corporation has managed to make a cell phone that can operate in unfavorable networks. This technology has come in handy in the operations of the industry.
Technology enhances inventory management through the introduction of bar codes. They are popular in the automotive, sales and defense industries. The presence of bar codes in the logistics industry faces challenges such as blockage due to paints, coatings or adhesives. New technologies in methods of reading the bar codes despite the blockages have helped industries in managing inventory by detecting errors or airing details of the contents.
Transportation delays that lead congestion to persist as a problematic issue that global logistics companies have to face in the course of running. An annual estimate of $408 billion loss in productivity arises due to congestions and delays. Intelligent transportation systems (ITS) are a new technology from the USA, and it aims at adopting valuable traffic signals and cutting transportation costs tremendously. Other technological advances directed to transport include improvement of ships, vehicles (trucks, pickups) in fuel efficiency and performance and use of cleaner fuels with a less negative impact on the environment. These advances have helped cut costs, reduced shipping time and have translated to favorable pricing of the consumer (Lowe, 2002).
Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2007). Supply chain logistics management. Boston, Mass: McGraw-Hill/Irwin.
Chan, F. (2005). Logistics and supply chain management with artificial intelligence techniques. Bradford, England: Emerald Group Pub.
Lowe, D. (2002). The dictionary of transport and logistics. London: Kogan Page.