The logistics and supply chain sector has been inundated with new and novel transport technologies in the past two years, with the likes of drones and self-driving truck convoys hitting the headlines.
However, experts don't expect many of these technologies to be widely and commercially available for another five to ten years. Here, Jonathan Wilkins, marketing director at obsolete equipment supplier EU Automation, explains why, for the time being, parts suppliers may be better served by focusing on reducing lead-times to same-day delivery.
On 7 December 2016, Amazon successfully trialled its Prime Air drone-delivery system to deliver a package in just 13 minutes from click-to-delivery. The drone, capable of fully-autonomous take-off, landing and flight, flew at an altitude of 400ft — the legal limit set by the US Federal Aviation Authority — and can carry payloads of up to 2.3kg.
In a more recent development, in August 2017 the UK Government awarded a contract to the Transport Research Laboratory (TRL) to test small convoys of self-driving trucks on UK roads. In these platoons, made of three vehicles, the lead vehicle is operated by a human driver. The following, self-driving, vehicles will autonomously match the braking, acceleration and steering inputs of the leader. This technology allows the self-driving trucks to drive much closer to the lead vehicle, reducing aerodynamic drag, making the vehicle more fuel-efficient and reducing congestion on the roads.
Despite the benefits that these technologies offer, there may still be a long wait ahead. In an article for the Massachusetts Institute of Technology's (MIT's) Technology Review, Otto, a company that retrofits existing trucks with self-driving systems, says, "New-truck development is on an eight-year cycle, and we're not waiting". The MIT lists availability of this technology as five to ten years away.
Apart from a small proportion of companies who are willing to speculatively invest in the research and development phases of these fledgling technologies, the best course of action — and the one likely to deliver more immediate returns — for most businesses, particularly those delivering industrial parts to manufacturers, is to focus on achieving same-day delivery.
Food retailer Tesco and consumer goods retailer Argos have pushed the boundaries of existing modalities by offering same-day delivery nationwide. Argos, for example, spent four years reconfiguring its supply chain to take advantage of its 700 physical stores.
"We started thinking about our stores not just as stores, but as fulfilment capabilities," explains Bertrand Bodson, chief digital officer of Argos, speaking to Diginomica.com. "And to leverage some of the things that are very unique to us, such as a single view of stock, which very few people in the world have.
"Most retailers know where their stock is, but at pallet level, which makes it very difficult to do click and collect. Some items also move super-fast, some move slowly, but you need to have them to serve customers so that they have the full choice. Having every single bit of stock item at a point in time is really valuable to us."
While same-day delivery in the consumer retail market may be a useful "want", rather than a crucial "need", for industrial businesses, short lead times can prevent costly downtime. According to Business Insider, a minute of unplanned downtime can cost anywhere between $65 in the airline industry, $8,851 dollars in the data-centre market and $22,000 per minute in the automotive sector.
As a supplier of obsolete industrial parts, at EU Automation, we understand this problem better than most, which is why we've worked hard to deliver extremely fast shipping times. We are able to deliver parts to anywhere in Europe within nine hours. We also offer next-day delivery anywhere in the world, using key distribution hubs located in Chicago, Singapore and the UK.
Autonomous delivery systems certainly offer exciting prospects for the future of the logistics and supply chain sector. However, manufacturers should not let this blind side them from the needs of their business today. For the time being, choose a supplier that offers same-day delivery and keep one eye on the sky for that autonomous drone delivery.