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5 Major Logistic Changes

Global Business Logistics


Griffith University

Assessment 1

Introduction:
Technological and environmental changes have impacted logistics across the world for many
years. When the first cars were made, more than 110 years ago, they gave a reliable method of
small goods transportation inside local areas. Sea transport gave the opportunity to massively
transport good through continents. Air transportation, in the other hand, gave a quick but expensive
way to transport goods throughout the world. Knowing the benefits of each transportation method,
which also include trains and pipelines, logistic managers have been planning different ways to
transport their products in a timely and efficient way. Forecasting the different logistic changes can
give a considerable advantage when dealing with long term strategies. For the purpose of this
assessment, 5 of the major changes will be explained below:
1.
2.
3.
4.
5.

Automation.
3D Printing.
Communication.
Reverse logistics.
Boxes

Automation:
Automation is a broad term used for autonomous cars, warehousing and even systems to
load and unload containers in seaports. These computer programs are developed to efficiently
manage certain repetitive complex tasks while reducing the processes costs, reverse logistic costs
and increased quality in the goods produced. (Baker and Halim, 2007). The use of automation lead
into better quality in goods, better transportation times and in broader terms better efficiency in the
processes. Also, it leads into lower production costs as people are no longer requires for specific
tasks, lowering the different costs across the supply chain when used, as well as, the final product
price for the customer. The only negative aspect of automation is the fact that many people will be
forced to leave their jobs as they get replaces by these new equipments.
In the car industry, autonomous cars are now capable of going at high speed through
highways without constant supervision of the driver. Some Google cars are able to recognize when
someone is about to cross the street and even the surrounds such red and green light. In the near
future, these cars will also be able to drive by themselves inside crowded cities lowering the risk of
human interaction. This will reduce accidents, insurance costs while transporting at higher speeds.
According to Bertoncello and Wee (2015) autonomous cars CO2 emissions will be 60% lower than
normal cars.
Automation not only refers to the changes into he car industry, were driverless cars will be
able (and are now) to transport people and goods using computers which analyze the
surroundings. It also refers to the processes of loading and unloading in ports, warehouses and
other places were a change in transport method may occur. The following chart uses Melnyks
model to analyze automation.

Impact

Comments

Sustainability

Positive

The use of automatic systems will have a better ecological impact while
making these processes more efficient, which reduces CO2 emissions
and equipment use.

Resilience

Negative

A bottle neck (which includes the sudden function of a machine) could


easily stop the whole process inside a business. Unless different
alternatives to each process is thought of, this could present a huge
impact.

Innovation

Positive

Better, faster and more economical ways to produce, store and transport
goods.

Security

Positive

Automation leads into repetitive actions, which when done by humans, can
be poorly done due to fatigue and other human conditions. Furthermore,
the use of equipment instead of people, will drop the rate of goods being
stolen, which is a critical aspect in many countries around the world. The
negative aspect of automation, is the fact that these computers can be
hacked representing a huge security concern.

Costs

Positive

Even tough the implementation of such equipments may be high, the long
term investment will provide greater advantages. A similar case can be
seen in pipelines where the implementation costs are huge, but once it is
going it requires far less human work than trucks, trains and air freight.

Responsiveness

Negative

Production will be focused for a specific quantity of goods. Unless these


machines are working at a 60-70 per cent, and are able to have a bigger
load, their capabilities will be constraint by a certain number. A similar
case can be seen in pipelines, there is a maximum amount of gas that can
be transported, and if more transport is needed, a new pipeline will need
to be made.

3D Printers:
The printers we have at home are actually two dimensional printers which inject ink into
paper to recreate drawings, pictures and documents previously made in a computer. Similarly, to
this, 3D printers use a software to recreate a three dimensional object. In terms of logistics, the use
of this printers give the ability to locally produce items in a small place in a brief time. Prosthetic
arms, guns and even engines have been created using 3D printers (Mavri, 2015).
3D printing has become one of the biggest logistical rule changes in the last years. There is a
lot of innovation, cheaper products and, of course, interesting applications for such devices in the
automotive industry, nursing and any other imaginable product. The use of this technology is very
simple, you need to pay for a template, download it from the internet and, within minutes to hours

depending on the product you are making, manufacture a high quality product (Petrick and
Simpson, 2013).
The benefits of 3D printers relay on their quick response to produce almost any good
anywhere. They are capable of fixing car, computers and even equipment little problems with good
quality goods. The only concern with 3D printers is that bigger enterprises, which produce most
goods such as computers, cars and other equipment, will be able to directly sell these 3D models
to people for them to produce these goods inside their houses, leaving small businesses such as
dealerships, computer repair centers and others without a market. Using Melnyks (2010) model an
analysis of the logistical changes 3D printers is made below:
Impact

Comments

Sustainability

Neutral

Can be either good or bad. 3D printers are still under development,


however matching the offer and demand might sound like a reduction of
materials which may decrease environmental problems. More efficient
ways of manufacturing can be achieved in a specialized plant where less
energy is using while reducing the environmental impact. However, a
comparison should be made also including the transportation emissions
involved.

Resilience

Very
positive

3D printers can basically produce any item anywhere in the world. Its
thought to be in the near future the best tool to help in natural disasters
zones and remote places. Furthermore, it is still under development, and
the time it takes to produce an item will be reduce in the short term with the
use of better inks.

Innovation

Positive

There is plenty to learn, new products to use and better outcomes to


produce. 3D printers are just starting and could be a game changer in the
near future.

Security

Positive

3D printers should enhance the quality of the product while maintaining an


equal structure across the different twin goods made anywhere in the
world. The product is designed inside a computer, and similarly to a normal
printer, will create a 3 dimensional figure following certain commands.

Costs

Negative

Right now, it is very expensive to have a good quality 3D printer. The


products used to create objects in 3D printers are not yet massively
produced. However, in the long term this could change, and everyone
should be able to have their own 3D printer.

Responsiveness

Excellent. Unless you dont have the inks or the 3D printers, they can produce
whatever you want in a short period of time. With technology advances,
these times will become shorter, and the variety of goods, or models, will
be also expanded.

Transportation:

Sea, water, rail, pipeline, air and road transportation are the main ways to move goods or
people from one place to another. Enterprises normally use a mixed method of transportation to
reduce costs. For example, use a pipeline to carry the gas from Roma to Toowoomba, and then
use a sea transport to take it to China.
As discussed in class, new technological advances are being used to enhance the efficiency
in transportation. Bigger sea transportation units are being developed in order to transport more
containers inside one shipment. Alternative energy such as solar panels and wind are being used
to reduce the fuel consumption. This not only helps in reducing the costs of transportation, but
reduces also the contamination produced by these large vessels. Driverless cars will also reduce
the costs in transportation, as well as better aerodynamics in every type of transport mode. So,
better aerodynamics, more freight capacity and enhanced use of alternative energy are shaping the
transportation of goods across the world.

Melnyks (2010) model will be used to analyze this:


Impact

Comments

Sustainability

Positive The use of alternative energy, as discussed in class, have reduced up to 15


per cent of the fuel consumption generating less pollution in vessels. The
use of multiple AVs is also helping reduce costs in land transportation.

Resilience

Neutral

Innovation

Positive For the last years, as discussed in class, vessels have been getting bigger
and bigger. Trucks now support up to 3 containers. Better aerodynamics is
also a huge implication. In other words, there is still plenty of ways to make
transportation more efficient.

Security

Positive Quality in transportation is achieved through better transportation methods,


where containers are being well secured to each other in order to transport
the goods properly. Furthermore, the speeds achieved by new ways of
transportation get higher every year, achieving a better costumer satisfaction.

Costs

Positive The use of better technology, more security in ports, more aerodynamic
transport methods and better logistical management leads into less costs.

Responsiveness

Positive Bigger trucks, faster vessels and more efficient planes lead into more ability
to be responsive in the case of a natural disaster or sudden need for goods.

If a zone is affected by a natural disaster, an alternative method will be used.


However, these alternatives are not cost effective most of the time. For
example, air freight is way more expensive than sea freight.

Communication/IT:
Increased speed in communication across the world not only lets you talk to people in New
York from Australia. Having a logistics center in India while operating across the world is now
possible. Communication is making large distances become short, and endless possibilities for
improvement in logistic are coming such as more efficiency in the routes used to transport goods in
case of storms or even traffic (Sun et al., 2000). For Woolworths for example, the capability of
having more costumers at the same time is now possible through their online stores where they
can buy their goods and receive them in their houses.

Impact

Comments

Sustainability

Positive The use of online stores will lead into people going less to do their shopping
generating less CO2 emissions. More efficient routes will be used to
transport goods, as well as using less traffic zones and times (during the
night).

Resilience

Positive Better communication lead into the knowledge of what is going on in


different routes. This lead into the ability to change in time for more efficient
routes. Automatisation is also linked to IT.

Innovation

Positive New and more intelligent software capable of taking people and goods
from one point to another (driverless-cars). Applications to get a more
efficient route from your house to your work, the inclusion of more customers
through online stores.

Security

Vulnera Being dependent on technology can cause hackers to get into everyones
ble
accounts. It has already happened, and will happen again. Firewall need to
be developed in order to protect customers information and business
technology.

Costs

Positive Technology is improving very fast. There is plenty of competition in the


market which is forcing big business to reduce their prices. Unless an
specific software is needed, pretty much everything can be obtained for a
really good price in relation to the need.

Responsiveness Positive Extremely positive. Being able to communicate with a vessel in he middle of
the sea, or being able to know the best route due to traffic conditions is
already happening and will be further improved in the next years .

Boxes:
The standardization of the measure of containers (20/40 ft. containers) made it more efficient
while transporting goods. It is an easier operation to take a whole container from a AV to a sea
form of transport if they are all the same size. This reduced time, and makes it more efficient while
saving space.
As discussed during class, one of the biggest changes that could happen in the following
years across the world is the standardization of boxes used for transportation of goods. Usually
every manufacturer uses a different type of boxes that will fit their goods. This could be seen as a
sustainable solution as it requires less packaging (Hekkert et al., 2000). With the standardization of
boxes used for transportation, more space will be available as a result of using a more efficient
size. Standardized equipment could be used to move boxes inside warehouses, reducing their
manufacturing costs as they will be manufactured for different types of business (as they use the
same size box). It also reduced the amount of boxes being produced, while also baking them far
more reusable. Costs and production of boxes will also be reduced as there will only be a certain

number of different sizes. However, the coding process will need to be enhanced as they will all
look alike.

Impact

Moments

Sustainability

Positive All boxes produced will be used, and reused. Overproduction wont be a
problem as they will still be used in the next round, or by another enterprise.

Resilience

Positive Having the same types of boxes anywhere will help big entities to buy them
anywhere in the world as they will have the same size and dont need to be
created specifically for their needs.

Innovation

Neutral

Security

Positive As there are standard size boxes, the use of better products to protect the
goods will be less expensive as they will be massively produced.

Costs

Positive Having a standard size will reduce production costs as they can be
massively produced.

There is no innovation, but a clear logistic goal which is to optimize the size
of the boxes.

Responsiveness Positive Having a standard size will increase responsiveness as they will be available
anywhere in the world. Again, every box producer will make the standard
size, so business will be able t buy them almost anywhere.

Conclusion:
Automation in warehouses and transport methods, 3D printers improving the quality of the
goods being made, transportation changes in sea, air and land, communication and IT
developments and the use of standard size boxes are all part of the logistical changes happening
and expected to change in the following years. They all aim to reduce cost, improve sustainability
and enhance resilience.
Unfortunately, most of these changes may lead to unemployment as computers have proven
to be more efficient and economical in the long term. However, there is a positive side of the coin
which is that costs will be reduced, quality of goods improved and overall costumer satisfaction
improved. This is not only seen in a market point of view, but in order to recover from a natural
disaster for example, the use of 3D printers will save many lives. The contamination produced by
large vessels using alternative energy will be drastically reduced leaving a better planet for the
ones to come.

References:

BAKER, P. & HALIM, Z. 2007. An exploration of warehouse automation implementations: cost,


service and flexibility issues. Supply Chain Management: An International Journal, 12, 129138.
BERTONCELLO, M. & WEE, D. 2015. Ten ways autonomous driving could redefine the automotive
world. McKinsey&Company.
HEKKERT, M. P., JOOSTEN, L. A. & WORRELL, E. 2000. Reduction of CO 2 emissions by
improved management of material and product use: the case of transport packaging.
Resources, Conservation and Recycling, 30, 1-27.
MAVRI, M. 2015. Redesigning a Production Chain Based on 3D Printing Technology. Knowledge
and Process Management, 22, 141-147.
MELNYK, S. & SPECKMAN, R. 2010. Outcome-Driven Supply Chains. MITSloan Management
Review, 51.
PETRICK, I. J. & SIMPSON, T. W. 2013. 3D printing disrupts manufacturing. Research Technology
Management, 56, 12.
SUN, M.-T., FENG, W.-C., LAI, T.-H., YAMADA, K., OKADA, H. & FUJIMURA, K. GPS-based
message broadcast for adaptive inter-vehicle communications. Vehicular Technology
Conference, 2000. IEEE-VTS Fall VTC 2000. 52nd, 2000. IEEE, 2685-2692.