Supply chain management is critical to a business’ success. Whether getting produce from farm to fork, home essentials from factory to supermarket shelf or business hardware from manufacturer to office, every step of the logistics process needs to be managed smoothly and effectively, with failures at any stage having the potential to become extremely costly to a business.
In this age of digital technology more and more we are seeing companies managing their supply chain through ‘smart logistics IT systems’ – applying innovations in software and cloud-computing to meet the demands of ever more complex logistical needs. Bringing new levels of efficiency to their processes to make considerable savings within the organisation.An example of how the embracing of smart technology in logistics can drive more than significant savings can be found via supply chain specialists DHL’s renewed relationship with the National Health Service (NHS).
The NHS is the sacred cow of the UK’s public sector and barely a day goes by without some discussion in relation to its management and the way in which tax-payers money is utilised. So any demonstration of savings and efficiency is to be generally welcomed in an organisation where every penny seems to come under scrutiny.
DHL renewed their contract with the NHS in October 2015, with the promise of delivering significant cost-savings to the organisation throughout the supply chain. Smart technology software underpins the drive towards making these savings a reality.
Freight Management of Sensitive Materials
An example of how smart logistics IT can be implemented to drive savings in supply chain can be seen though the managing of sensitive materials in transit.
In recognition that certain healthcare products need to be transported under specific conditions and with the utmost care DHL have implemented software that, through a GPS-link, allows real-time monitoring and control of cargo temperatures.
By having automated control of the conditions in which these items are moved, reduces the risk of products being damaged in transit. Which, naturally, reduces both product wastage and costs associated with additional transport and time.
Internet of Things
Such examples are a representation of how modern logistics can embrace new smart tech and the so-called internet of things.
DHL’s buy-in to smart logistics IT has been founded upon this connection between technology and physical items. This has enabled a streamlined supply chain that addresses specific needs of specific clients – such as those required in the health sector.
Smart logistics and the internet of things idea has allowed for online connection between ordering and inventory control to warehouse picking, loading and delivery. Each part of the process connected through the wireless transfer of critical data: inventory codes, order sizes etc. Process that save time and labour, allowing for orders to be picked, shipped and delivered efficiently and on-time.
So, how is this smart logistics system working out? And, more pointedly, is it delivering the savings required?
As part of the renegotiation of the NHS contract, DHL committed to savings to the organisation to the tune of £300m by 2018. This included a target of £150m to be achieved by March 2016.
Through the global business-wide adoption of smart technology in combination with traditionally managed solutions such as product rationalisation, the company announced in April that they achieved this initial £150m savings and were on-course for achieving the additional £150m within the time-frame.
With the continued evolution of smart logistics applications, it should allow innovation-embracing organisations the facility to make greater savings in the years ahead.