Logistics: What It Means and How Businesses Use It

Once the item arrives, it goes to a separate area of the warehouse for the retailer to decide what to do with the inventory. Incoming returns go through a review process where any sellable items are placed back on the shelf. This process involves purchasing and delivering materials, packaging and shipping goods as well as transporting goods and products to distributors. Conversational AI is an evolved form of chatbots, combining natural language processing (NLP), large language models (LLMs), and machine learning to enable dynamic conversations.

Leading manufacturers are increasingly considering alternatives elsewhere in Asia. The shipping company recently ordered 19 container ships powered by climate-neutral green methanol. From June 2023 to 2025, one feeder ship and 18 large container ships with slot capacities of 16,000 TEU and 17,000 TEU will be put into service under the Maersk flag. Major seaports, such as Rotterdam, Europe’s largest port, will respond to increasing costs with moderate price hikes of around 2.5% to 3%, according to Siemons Boudewijn, COO of Port of Rotterdam Authority. Most facilities managers possess a bachelor’s degree, with degree specializations such as business management, engineering or facility management.

Asset-based 3PLs have more control over their operations, which can mean better quality and consistency. Non-asset-based 3PLs rely on partners, which might lead to less control but more flexibility. When deciding on a 3PL parcel transportation provider, explain your origin and destination locations and the time frames you expect for stock to move between. Since 3PLs are able to negotiate preferred shipping rates, the cost of shipping is typically lower. And those savings, in turn, can be passed on to consumers by offering them free shipping.

With the right tools, processes and organizational structure in place collaboration provides key people throughout the value chain with the information needed to make business-critical decisions with the best available information. AI and machine learning algorithms enable logistics companies to be proactive in dealing with demand fluctuations. For example, AI-based forecasting allows managers to plan supply chain processes and reduce inventory waste.

The Supply Chain: From Raw Materials to Order Fulfillment

Last-mile logistics companies can also leverage AI-powered systems to manage driver deployment. By automating the entire process of receiving an order, assigning an order and providing the necessary information to drivers, they are able to scale to a virtually unlimited degree without relying on additional dispatch personnel. Process mining turns operational data from business systems into a hyper-accurate, 360-degree visualization of processes, how they impact each other and how that translates into overall business performance. Celonis has taken this a step further with its development of object-centric process mining (OCPM) which funnels multiple layers of cross-business process mining insight into a single three dimensional, end-to-end process perspective. In addition to these reactive measures, reverse logistics enables a proactive approach to promoting sustainability. By analyzing returns data, companies can identify and address the likely causes of goods being sent back — such as design, build quality, promotional language, and even the returns policy itself — and take action to address these.

It can also be used to demonstrate why one carrier is better than another, based on relevant performance metrics. WTL smart contracts enable businesses to minimize currency fluctuation costs, in addition to eliminating the costs of currency conversion. French startup Exotec builds the automated robot Skypod to optimize eCommerce warehouses. The Skypod system ChatGPT optimizes storage space by employing vertical storage methods in order to increase the height in warehouses by up to 10 meters. Irish startup Manna offers drone delivery as a service to restaurant chains with its aviation-grade fleet of delivery drones. Manna’s drones are capable of flying at an altitude of 80 meters with a speed of 80 km per hour.

• In conclusion, supply chain, logistics, and transportation careers offer a wide range of opportunities and a positive career outlook.
• Similarly, reverse logistics processes often include recycling efforts to extract and reuse both components and raw materials from returned inventory.
• Having inaccurate data can affect a company’s ability to use analytics effectively, automate activities, and more.
• They also intend to increase open innovation ecosystem collaboration, embrace new business models, and identify and implement best practices.

The NCMA also offers a Certified Federal Contract Manager (CFCM) certification for those working in or with the government and a Certified Commercial Contract Manager (CCCM) certification for those in the commercial industry. In contrast, managing logistics in-house offers control, customization and alignment with corporate values but can come with high fixed costs and scalability challenges. Companies must carefully consider the best option for their unique needs and market conditions. The emerging technologies reduce human errors, allowing companies to meet transparency expectations from higher ups and consumers. In addition, they also enhance productivity and profitability by enabling workers to report information in real time. As a result the company increased parts re-use, improved document retrieval time, reduced design cycle time and ultimately reduced new product development cost by 15 percent.

Fulfillment automation

The use of Internet of Things (IoT) devices across supply chain operations also provides AI systems with a wider range of data, leading to more comprehensive insights. IBM applied several of its AI-driven supply chain solutions to its own operations, leading to USD 160 million in savings and a 100% order fulfillment rate even during the peak of the COVID-19 pandemic. Shopify Fulfillment Network (SFN) offers a powerful solution for businesses looking to streamline their ecommerce logistics and scale operations. By partnering with Flexport, a trusted logistics provider, SFN brings advanced technology and efficiency to your fulfillment process. Warehouses that store, ship, and handle returns are the most common type of 3PL, with many offering super-fast two-day shipping options. And, if you’re expanding globally, international warehouses can help build a global supply chain.

Transforming logistics from a cost center to a value creator is driving business impact, with a focus on last-mile delivery, cost optimization, and leveraging tech and talent. This shift is shaping supply chains and changing the way businesses approach logistics management. Companies across the aerospace, fashion, automotive and food industries use Infor’s AI-powered supply chain applications to make more informed decisions about how they get their products to consumers.

The increased transparency further increases supply chain efficiency and reduces waste. OBORTECH is an Estonian startup that utilizes blockchain to build a connected and secure supply chain ecosystem. The startup’s blockchain and cloud-powered communication solution, Smart Hub, allows stakeholders to store and share information in a central platform.

It provides freight transportation and logistics, sourcing and warehousing services to thousands of companies around the world, handling about 20 million shipments annually, according to the company. Software helps companies track and manage inventory, plan delivery routes, automate warehouse operations, and more. Technological advancements in AI and automation make many logistics processes more efficient and autonomous. Recent extraordinary events, such as the COVID-19 pandemic, the Russo-Ukrainian conflict, the energy crisis and rising inflation, have drastically altered the balance between supply and demand. These disruptions have underscored the critical need for operational flexibility, prompting companies to explore alternative strategies beyond traditional approaches.

But on the bright side, meeting these diverse challenges should be exhilarating. In addition to managing the standard flow of business and doing more with less, managers are faced with more data being created and provided to them than ever before. Efficient processing of this data drives success in operations and forecasting, while ignoring or focusing on the wrong data leads to inefficiency and failure. During the pandemic, the industry faced significant disruptions, leading to major transformation initiatives across supply chains with the intent of reducing challenges.

The Tree Map below illustrates the 10 emerging trends in logistics that will impact companies in 2025. The Internet of Things (IoT) enables real-time tracking and monitoring of goods and assets to enhance supply chain visibility and efficiency. AI powers predictive analytics, route optimization, and demand forecasting solutions, reducing costs and improving decision-making.

In economically challenging times, incorporating elements of cost reduction can be necessary, but it should never come at the expense of service quality. Supply chain logistics management is key for determining the success of companies across industries. We explore the world of supply chain logistics and the transformative strategies that are driving logistics from being seen as a cost center to becoming a creator of service-based value. We’ll also look at the core aspects of last-mile delivery optimization, the delicate balance between cost reduction and service excellence, and the important roles of technology and talent.

Much of delivering good customer services relies on logistics operations, including speed, quality, cost and fulfilment. It connects all stages of the supply chain – from production, storage, transport, and delivery – to optimise the flow of goods. The result is more streamlined, accurate, reliable deliveries and the potential for improved customer experience. Skilled professionals who understand the intricacies of supply chain management, logistics planning, and customer service are essential.

The CPSD certification consists of two exams, but you can skip the foundational one if you already hold your CPSM exam. To qualify, you need three years of supplier diversity or management experience and a bachelor’s degree, or five years of experience. To maintain your certification, you need to complete 50 hours of approved continuing education credits over a three-year period. According to the ISM, those with a CPSD certification earn around 10% more than their uncertified peers. Umberto Cavallaro is Head of Business Development at AscoService, empowering clients with their supply chain management systems. Umberto Cavallaro is Head of Business Development at AscoService, empowering clients with their supply chain management systems.

As with the CPIM certification, you’ll need to submit an extra 15 points for every year your certification is suspended if you let it lapse. According to the ASCM, those with a CSCP certification report earning salaries that are 40% higher than their peers. Companies with dedicated resources focused around demand planning and forecasting yield stronger results and drive more value to their company.

Through strategic investment, careful planning, and prioritising resilience, freight forwarders can help maximise their potential for success. In recent years, many freight forwarders have implemented ‘track and trace’ capabilities and are increasingly catching up to the user friendliness of platforms offered by digital forwarders. This is likely to continue as freight forwarders recognise the need to offer the best possible digital services to secure new customers and keep existing ones.

As your business grows and evolves, you can easily adapt your fulfillment strategy. Plus, SFN’’s pricing is competitive and transparent, ensuring you pay only for what your business requires. The right partner can make or break your company’s logistics, customer service, and repeat purchase rate. Trusting someone how is customer service related to logistics management? with sales, inventory, and other sensitive information is a significant risk. A full-service 3PL will also manage your return and exchange processes, as well as the customer service that goes along with that. Based on where most of your customers reside, it’s helpful to know where a 3PL’s warehouses are located.

Indian startup Addverb Technologies works on Dynamo, an AGV for the transport of diverse loads in the warehouse. The Global Startup Heat Map below highlights the global distribution of the 901 exemplary startups & scaleups that we analyzed for this research. Created through the StartUs Insights Discovery Platform, the Heat Map reveals that the United States is home to most of these companies while we also observe increased activity in India as well Europe, particularly in the UK.

The continued move toward SaaS deployment, use of AI/ML resources, and ubiquitous internet-based devices should have TMS technology streamlined and poised to take on an even bigger role in SCM. Three-dimensional graphics are becoming more common in visualization tools that help, for example, with designing loads. SaaS continues to provide an important delivery mechanism for these capabilities.

Projections suggest global generative AI supply chain investment to reach $13 billion (about $40 per person in the US) by 2032 at a CAGR of 46% from $301 million in 2022. For North America, the recent Infosys generative AI survey that involved over 1,000 respondents estimated the investment to double in the next 12 months to around $70 million. The shift in priorities due to post-pandemic disruptions and events such as the Ukraine war significantly hindered generative AI use cases in supply chain management. Then logistics experts discuss the challenges and prospects for global supply chains in 2023, it’s clear that a multitude of factors are involved.

If you aren’t already a member, the cost of the non-member fee for the exam also includes one year of ISM Direct membership. The Six Sigma method was designed to streamline quality management and it’s still widely used today to help eliminate waste in processes, identify areas for improvement, and keep track of the supply chain while developing products. The Six Sigma certification scheme is often found within organizations, earning you “belts” as you move from green to black up the certification ladder. It’s typically used in large companies to create paths toward leadership in operations and to maintain a focus on efficiency and quality. The principles in Six Sigma can be extremely helpful for keeping your supply chain lean and agile, and it’s a valuable certification if you’re working in an organization that leans on the Six Sigma method. Integrating our company with Maersk aligns with our values and strategic goal to scale our services to reach more customers with our business model.

FedEx has also diversified its offerings, providing supply chain solutions, freight transportation, and specialized services for healthcare and perishable goods. E-commerce businesses that don’t want to oversee their own warehouse management can turn to Shipbob, which runs a large network of fulfillment centers and offers express shipping capabilities. The company also uses predictive data and analytics to provide inventory management services, and can be easily integrated with platforms like Shopify, Wix and Squarespace to enable users to more easily import orders. Supply chain management ( SCM) is the overall process of procuring raw materials to develop into finished products that can be delivered to end-users, such as software, hardware, and other IT and tech services offered by companies. The SAP supply chain management software SAP SCM is an enterprise-grade solution offering business intelligence tools. These include AI-powered predictive analytics, integrated planning tools for a demand-driven supply chain, and supplier management tools to ensure you’re working with the best vendors.

The MSI Lean Supply Chain Management certification (LSCMC) is a certification that specifically focuses on the lean supply management principles, which integrates the lean management principles into the supply chain. The course covers topics such as improving performance, lowering costs, procurement, forecasting, inventory, order fulfillment, supply and demand, lean SCM, and value stream mapping. Over the past three years, the risks and shortfalls in our global supply chains have been brought to the forefront across all industries. Supply chains are now recognized as central to business survival, success, and growth, rather than an opportunity to just reduce costs. Great recent examples of collaboration have been seen in the expansion of sales and operations planning processes that include upstream and downstream value chain partners as regular participants. S&OP processes help maintain a well-coordinated and valid, current operating plan in support of customer demand, a business plan and a strategy.

Future of transportation management systems

Instead, they partner with other companies to use their equipment and facilities. Don’t assume that the cost of third-party warehousing and distribution is out of your price range—as we explain below, it can actually reduce your overhead costs and free up capital. 3PLs maintain their own hours of operation and workflow, which can have a flow-on effect to your business.

Poor data management and governance also present a foundational issue to supply chains. Having clean, well-managed data is critical to the success of systems across the organization. Having inaccurate data can affect a company’s ability to use analytics effectively, automate activities, and more. Customers create an account on the company’s website or mobile app to utilize FedEx’s services. From there, customers can access a range of logistics solutions tailored to their specific requirements.

Also inquire about whether your 3PL options offer some form of reporting to help you keep track of things like timeliness of deliveries, order and delivery accuracy, and shipping-related damages. Ask about the shipping methods they use, the service levels, and any pricing/discount information they’ll give once your inventory increases. You can foun additiona information about ai customer service and artificial intelligence and NLP. If you transport international freight, some include brokerage fees; others include import/export taxes and duties in their costs. When choosing a 3PL warehouse, determine how many distribution centers you’ll have access to. You’ll need a larger network of warehouses if you promise customers expedited delivery. Shipping speed hinges on warehouses being geographically close to your customers.

Customers can drop off packages, purchase packing materials, or seek assistance with their shipping needs. FedEx charges fees for these retail services, contributing ChatGPT App to the company’s overall revenue. Despite initial financial difficulties, FedEx achieved profitability in 1975 and continued to experience steady growth.

It also tackles the problem of overstocking as companies adjust their inventory levels to align with actual demand, reducing carrying costs and the risk of obsolescence. These insights are derived by working with our Big Data & Artificial Intelligence-powered StartUs Insights Discovery Platform, covering 4.7M+ startups & scaleups globally. As the world’s largest resource for data on emerging companies, the SaaS platform enables you to identify relevant technologies and industry trends quickly & exhaustively. 3PL companies can manage order packaging and warehousing, track inventory and handle customer service for clients.