If there is one certainty in the world of which we can be sure, it is that the society in which we live is constantly changing. Interpersonal relationships, production flows, technologies... Everything is changing and transforming the way we live and work. And even more so in a context in which digitalization and new technologies have been integrated into our daily lives at a dizzying pace in what many experts have come to call a fourth industrial revolution.
A revolution that, of course, is also affecting a sector such as logistics, which has always been in constant movement, trying to adapt to the needs of each moment and improve productivity and process efficiency. But how have we changed?
The evolution of logistics throughout history
Logistics is always associated with many different terms: supply chain, transportation, operations, procurement, supply chain... A variety of concepts that create confusion, but which are all part of this broad sector in which we operate. And they have been from the beginning.
To understand the origin of logistics we have to go back to the times of ancient Greece and the Roman Empire. It was there that we first encountered the word "logistics", a term with military origins that referred precisely to the supply, in this case of ammunition and weapons. The "logistikas" were the military officers in charge of supplying the army, highly trained people who stood out for their mathematical knowledge and their management of goods.
Since then, what we understand by logistics has evolved to encompass all those supply and distribution tasks that try to satisfy a certain human need. And just as the word evolved, so did the activity itself. Until with the appearance of the industry it acquired a meaning close to what we can understand today as a sector. But even as a specific economic activity, logistics has not ceased to undergo constant changes. In the 1960s, for example, it underwent a major transition with the development of the first distribution and transport centers, and during the 1980s the working model began to change as more importance was given to delivery times, resource management and customer service. As a result, the productivity of distribution plants increased and transportation tasks were rationalized.
Moreover, with the advent of globalization, all the rules of the game have changed. It was no longer a matter of storing and distributing the goods of a lifetime locally. Now we had to open our minds to operations on a larger scale, with an increase in demand and the birth of international distribution. Revolutions that meant adapting to the new model or disappear. And this brought with it a change in the entire workflow. Many production centers moved to places where manufacturing is cheaper, but which, on the other hand, make logistics more complex and more prepared, since all this production has to be managed and transferred to the places of consumption. In this way, the main need is no longer the supply itself, and aspects related to it, such as efficiency, speed of delivery, competitiveness, etc., begin to be valued.
Digitalization: a real driver of change
However, if we have to point out a milestone that has marked a before and after in the logistics sector, it is the emergence of new technologies. With the advances made in recent years, the ability to measure and control everything that happens along the supply chain has increased exponentially and, with it, the ability to develop ways to improve it and, therefore, competitiveness.
Information technology, the development of sensors, traceability systems, GPS and route management programs, QR codes... All the emerging advances have been applied in one way or another to the sector, improving its performance and positioning logistics no longer as a department that fulfills the ultimate function of distribution, but as a competitive advantage and a factor that can be key to the growth of companies. Logistics has become a cross-cutting process for positioning companies and satisfying the customer, which seeks to manage efficiently and, above all, seeks to have maximum control and provide maximum information to the customer. The rudimentary need to supply weaponry to classic militias has become a need for the consumer to know at all times exactly where the product he has purchased is. And all this has translated into higher profits, greater efficiency, the possibility of offering complementary services, greater sustainability...
And all this revolution has been the result, as we have said, of digitalization. Many technologies have been incorporated into the supply chain, although we can highlight three that have generated such an impact that it has completely transformed the logistics sector:
- eCommerce: E -commerce has radically changed the way customers consume. They can now buy anything, from anywhere, at any time, and logistics has to be ready to meet their demand and deliver their orders. This has been a huge challenge for the industry, as it has had to develop faster and cheaper delivery methods, expand the size of warehouses to handle all orders, have international shipping methods, develop return centers...
- Big data: refers to the massive processing of data and has a great impact on the supply sector as it allows us to know the tastes and preferences of consumers and, thus, adapt the logistics chain to meet real needs, prioritizing customer service over production itself. And this allows companies to be much more competitive because, in a globalized world with so many possibilities, the customer is much more demanding and wants a better service.
- The Internet of Things: it allows us to know in real time the status of goods, track deliveries by geolocation, control and respond to the risks associated with the supply chain...
These advances have radically changed the consumption model and the way of working in the sector in general. But to all this we must also add all the advances that have been implemented in each of the parts that make up the sector: warehouse management technologies, new forms of transport, automated vehicles, new machinery... And all this new technology has also had a great impact on professionals in the sector, as they have had to adapt to these changes and adapt their roles to the new demand and the new way of working. But new jobs and profiles have also been created that did not exist before, in order to be able to cope with all these new developments and have personnel who are specialized and prepared to handle these new technologies.
Sustainability: a challenge that did not exist before
In addition to all this digital transformation, there is another factor that was not taken into account before: care for the environment. For years, sustainability has been a key factor in all companies, including logistics companies. And even more so in a sector that has traditionally been highly polluting: fuel for transport, emissions from distribution plants, cardboard and plastic waste produced by packaging... This has meant that the sector has had to adapt and face the challenge of becoming more sustainable and efficient, tackling what is known as "green logistics", which has led to the introduction of new vehicles (electric, hybrid, gas...), the reduction of packaging, the search for more sustainable forms of delivery and the emergence of micro-hubs, the implementation of technologies that also help to reduce emissions...
What can we expect in the logistics future?
As if all these challenges and transformations were not enough, we are also facing a global health crisis caused by the coronavirus that has shaken the entire global economic system and has made it necessary to consider how to operate and seek new working models that will undoubtedly remain in place for the future. All companies have accelerated their digitalization to be able to continue operating in such adverse conditions, shipping companies and ports have had to modernize and look for new ways of operating, the online commerce sector has grown exponentially, the hygienic-sanitary measures demanded by consumers have changed... And all this will have an impact on the sector in the short and long term.
In this context, e-commerce has grown strongly, increasing by up to 30% during the pandemic. This growth will continue to be significant in the coming years, with an increasing percentage of Internet users. This growth will also lead to a redesign of supply chains and new operational changes in warehousing and transportation processes. In addition, customers have also changed, and this evolution will pose major challenges that will require ever faster and more flexible responses. Some customers will want faster deliveries and others will be more concerned about sustainability, and logistics will have to find ways to continue to respond to all of them in order to remain competitive.
In addition, the digital transformation we are talking about will not stop, and will continue to be one of the fundamental factors that will change the logistics areas with changes in connectivity, the implementation of 5G and the emergence of new tools and work models that we have not even imagined yet. This technological transformation will also generate the need to further specialize workers, having to adapt them to the new environment and creating even more new profiles.
In short, the logistics sector has been a sector in continuous change since its origins, and will continue to be so in the future. We have evolved towards a more agile, efficient, transparent, organized, secure and interconnected model, and new technologies have made it possible to improve all the processes involved and, with it, the user experience. And in view of the fact that this trend will continue, logistics companies and workers face a traditional challenge: renew or die.
Consultant in Logistics and Supply Chain Technologies
