Automation in Logistics: Exploring the Benefits and Implications

The rise of ecommerce and globalization bring opportunities, but also challenges. So, the humans could use a little help.

Enter automation. It’s a powerful solution, building bridges between supply chains and processes that need 24/7 coordination. But with all the benefits and applications, it does come with its own set of implications. In this article, we’ll explore all sides of this, providing you a comprehensive guide on automation in this great sector.

Why the logistical sector needs automation

It’s not just the rise of AI and other nifty tools that are shining a light on the need for procurement automation in logistics.

The impact of labor shortages and supply chain issues has the industry in a chokehold. Not enough people, delays in shipments and an increase in demand: logistics is taking a hit. 

60% of recruiting employers in transport and storage have hard-to-fill vacancies. With less people to do more work, a crucial part of a sensible solution is automation.

5 Benefits of automation in logistics

But automation isn't just the answer to a cry for help. In fact, it has been deployed over many years, because of its many benefits. On a positive note, let’s look at how automation makes the logistics sector better.

1. It increases efficiency

Automation is redefining warehouse efficiency and breaking speed limits almost daily. 

One of the most famous examples of just how efficient a warehouse on automation can be, is Amazon. Their combination of random storage and a sophisticated system, Kiva Systems, helps them ship over 5 billion items faster than you can even say Jeff Bezos. 

Not every business has the means to develop a system like that, but there are many more businesses who have intelligently implemented automation and robots into their processes.

2. It increases reliability and safety

Some processes are tedious and repetitive – which is not something humans are known to love. Automation can take over these tasks and in that reduce the risk of errors, and ultimately improve safety standards.

3. It reduces fuel expenses

Using software to track fuel consumption is a game changer when it comes to cost saving with your fleets. Fleet fuel management systems are able to identify fuel consumption to optimize operations and pinpoint exact costs for haulage and distance. 

4. It promotes scalability and flexibility

Robots in warehouses can work longer hours, autonomous vehicles can make more trips, and AI systems can handle larger data sets. As demand grows and fluctuates, automation can help businesses adapt. This flexibility does not compromise on efficiency nor accuracy, so standards can be kept high no matter the season.

5. It enables sustainable practices

Self-driving vehicles can be programmed to take a fuel-saving route, which is a next step in sustainability. But automation promotes sustainability in other, smaller ways too – that add up just as much:

• Reduced energy consumption: automated warehouse systems can be programmed to reduce unnecessary movements and save power.
• Less waste: since automation can increase accuracy and reduce the risk of errors, there can be less waste, product damage and overproduction.
• Optimized transport and storage: if automation is used to optimize transport routes and how many containers are shipped for instance, you can reduce the need for as many vehicles and save fuel.

There are many more ways automation can make supply chain technologies more sustainable, simply by the visibility they create into the processes at play.

6. It helps reduce costs

Automation is cost effective. It reduces errors, works faster and frankly, does not get ill. Long story short: the right tools can slash spending and increase margins.

Applications of automation in various logistics processes

It’s so much more than warehouse robots and self-driving vehicles. Here are some of the ways automation can be implemented into logistic processes.

Insurance and risk management

Let’s start with preparation and planning ahead: automation can significantly reduce accidents and errors, but also help you identify what types of insurances need to be taken out or renewed. Sync up with a partner like CoverWallet’s insurance for a safety net on dump truck accidents, and set up your systems to remind you when to renew your policy.

Transportation

This is where self-driving vehicles come in, but you don't need to change your fleet of vehicles. You can also use automation tools to help your drivers figure out the best routes based on traffic or stops to make, or to transform last-mile delivery.

Warehousing

Automation can help you stay organized, and have virtually any crew find what they need in your warehouse without having been there before. 

Order fulfillment

Automated picking, packaging and labeling, and order tracking: automation is there every step of the way of the order fulfillment process. It keeps consumers happy, and workers have more time to spend on human work.

Supply chain management

Last but not least, automation can help with predictive analysis, and real-time tracking – making your business run smoothly now, and in the future. With the IoT devices can track goods in real time, providing visibility into the supply chain. And all that data over time, will be handy to make predictions. 

Implications and challenges of automation in logistics

Let’s not just look at the advantages – to really leverage the power of automation, we need to be aware of its weaknesses, too:

• Job displacement: ethics are important here. While automation could render some jobs obsolete, it could also create new ones. The speed of automation is crucial in keeping it a balanced process, as are regulations from governments and the industry.
• Data security: automation relies on data, which means there should be an even higher regard for data protection.
• Regulatory changes: from safety to data protection to jobs, with the use of automation a lot of new laws will come in effect. 
• Skill gap: teams need to be trained and knowledge gaps need to be filled to help people bring automation to its fullest potential.
• Infrastructure and investment: automation isn't always cheap, even more so if it isn't implemented correctly. Make sure to assess what automation you need and how it fits into your processes.

Automation is paving the way for better logistics

The opportunities for automation in logistics are significant, especially with the challenges the industry faces. While there are certain implications and bumps on the road that need straightening out, it is looking promising and can transform the sector to make it more safe, sustainable, and consumer-centered. 

‍