Definition of Logistics 4.0 and Smart Logistics

Today, Smart Logistics tends to be replaced by Logistics 4.0 for two main reasons, the term 4.0 comes from Industry 4.0, which represents a logistics system commensurate with Industry 4.0, for example, it can sustainably support mass customization production of Industry 4.0 at a reasonable cost, secondly, as versioning-analogy like software engineering, 4.0 can better reflect the meaning of continuous upgrading.

Domains

Supply logistics, Intra-logistics (also named production logistics or in-house logistics), Distribution logistics, Reverse logistics.

Technologies related to Logistics 4.0

Digital virtualization technology, Internet of Things (IoT), real-time big data analysis (BDA), autonomous robots, artificial intelligence (AI), cyber physical system (CPS), etc.

Facts and Issues

There is no universal standard for Logistics 4.0. For different enterprises, their management elements and focus are different.
Digital technology cannot exist without the support of basic capabilities. Therefore, the establishment of corporate Logistics 4.0 capabilities also requires a transition process from basic capabilities to advanced capabilities.
So, where should the upgrade path of enterprise Logistics 4.0 start? How to effectively evaluate the current state of the enterprise and analyze the gaps, and how to formulate an action plan that suits the enterprise itself?

Hope the following actions and countermeasures suggested by our experts can be helpful to you.

Countermeasures 1： Evaluate, build and complement the basic capabilities of Logistics 4.0

Although the concept of Logistics 4.0 is usually associated with cutting-edge information technology, the enterprise’s logistics 4.0 capability construction should start from basic capabilities, objectively evaluate AS-IS logistics capabilities, analyze gaps, and carry out necessary construction and supplements.

Taking intra-logistics as an example, these basic capabilities may include:

Material control capability, for example, the material life cycle management capability, which may include management of material timing cycle, quality cycle, IE cycle. Definable material flow control logic, production pulling/supply mode, and fine-grained material management ability, etc.

Material scheduling capability, in particular, capability to plan and schedule material handling resources, human resources, material flow route, etc. for material warehousing, production supply, WIP transfer, buffer, returns according to production schedule, Able to provide real-time visual guidance for on-site material execution; and has the capability to measure the material plan fulfillment rate, vehicle load rate, personnel efficiency, resource balance, cost, etc.

Material execution capability, for example, established standardized material execution processes, including material warehousing processes, quality control processes, production pull/supply processes, and process for WIP and finished products; Flexible material execution capabilities, e.g. there are mature plans and standardized processes for production material changes, etc.

In-house material visualization capability, e.g. visibility of real-time material inventory information, visibility of material execution process, capability for risk identification and early warning, etc.

Material traceability, able to trace back the detailed information of materials used for particular production orders, such as the material source, batch, and other key managed attributes, and able to trace all the operations performed and changes made for a particular material in its whole management cycle, etc.

Other basic capabilities for intra-logistics may also include the Logistics capability management capability, for example, the visibility of enterprise material execution capacity, cost and efficiency, KPI management system, logistics execution capability prediction, etc. Enterprise internal integration is another key basic capability of intra-logistics, for example, the information integration across different enterprise management domains, for example SRM, ERP, WMS, MES, APS, CRM, etc. upon which, integrated material planning and execution can be realized.

Countermeasures 2： Build up Logistics 4.0 oriented automation and unmanned capabilities

Automation and unmanned technologies play an important role in Logistics 4.0. Some automation and unmanned technologies have been widely used in modern intra-logistics, such as automatic storage systems and automatic picking systems. On the basis of above-mentioned basic logistics capabilities, enterprises should consider introducing and strengthening the automation and unmanned capabilities of enterprise logistics. Moreover, some of these technologies are more critical for the upgrade of Logistics 4.0.

Automatic material identification, for example, the realization of real-time, automatic material identification and information collection of raw materials, WIP, and finished products for intra-logistics, eliminate information blind spots and break points, realization of open-loop IoT applications for core suppliers and customers within the supply chain to realize automatic material information identification and collection of raw materials, outsourced components, products, and spare parts among core partners in the supply chain.

Automatic positioning, by using automatic positioning technology, to obtain real-time location information of the material container and equipment as well as the associated material information at any time, and able to provide these information to the collaborative system ERP/APS/MES, and possible to trace back movements history of material containers, logistics equipment, and personnel, etc.

Automated and unmanned material handling and warehousing. introduce moderate and collaborative automation and unmanned operations for in-house material warehousing/buffering, raw material production line supply, work-in-process transfer, finished product off-line transfer, etc.

Overall synergy of automation and unmanned units, realize collaborative work among automation, unmanned identification, positioning, handling, and storage technologies. The overall collaboration capability is the key feature of the unmanned and automated oriented to Logistics 4.0.

A Uniform In-house Material Control Platform (IMCP)

Establishing a unified in-house material control platform as early as possible can well solve the problem of information islands caused by step-by-step implementation, sub-module introduction, and diverse technical sources when enterprises are carrying out the transformation and upgrading of in-house logistics capabilities. A unified in-plant material control platform, as a unified technology and process carrier, is conducive to the realization of the coordination of logistics capabilities, enterprise integration of internal and external systems, and the continuous upgrade in future.

Countermeasures 3： Build intelligent logistics capabilities

Intelligent logistics is the focus that enterprises should pay attention to in the next step, including the introduction of intelligent logistics-related technologies and the construction of corresponding intelligent logistics capabilities, such as:

Digitalization and virtualization capabilities

Digital Twin, Digital virtual representation (digitalization model) of intra-logistics. The digitalization model of intelligent logistics should have real-time, dynamic, and analytical characteristics, for example, be able to reflect the current actual position and status of the current material flow-related objects, and be able to trace back to any time point the material flow status, can reflect the logical relationship of interoperability and mutual influence between different material flow objects, and has the big data analysis ability of logistics events, etc.

Real-time material flow transparency, Through Digital Twin and big data analysis technology, provides real-time material flow transparency capabilities related to material flow events, root cause analysis, and has the ability to make complex and rapid decision-making in case of exception and change.

Virtualization verification capability of logistics execution, Such as logistics execution virtual simulation ability based on production plan or forecast, What If scenario verification ability, etc.

Predictive analytics

Material demand predictive analysis capabilities, Such as predictive analysis of material level in the factory, predictive analysis of material execution ability, risk prediction ability, etc.

Predictive simulation capabilities, based on Digital Twin, providing predictive logistics execution simulation capabilities.

Supply chain predictive analysis capabilities (extension of supply chain control capabilities), Market demand forecasting capabilities, predictive analysis of supply chain material stock levels, and analytical forecasts of supply chain resource network capabilities, reliability, and stability, etc.

Early action decision support capabilities, supports early action decision-making based on predictions, artificial intelligence (AI).

Autonomous material flow capability

Cyber-Physical Network linked in, Connect to the Cyber-Physical Network and operate as a part of CPN.

Highly coordinated with production and delivery planning, adaptive material level control, change and exception response, and adaptive material and logistics resource checking and preparation according to production plan requirements, etc.

Self-managed material life cycle.

Autonomous material decision and execution, autonomous material flow calculation and decision-making capabilities driven by production and interactive planning requirements and material logic, autonomous material flow execution, and the operation and mutual cooperation of autonomous material execution units, etc.

Self-learning and self-optimization capabilities.

Human-machine interoperability, autonomous material flow monitoring, intervention and substitution.

Countermeasures 4： Full supply chain control capability

For most companies, when building internal logistics capabilities, they should also pay attention to the construction of full supply chain capabilities, such as:

• Supply chain predictive analysis capabilities.
• Integrated planning and execution capabilities of the full supply chain.
• Full supply chain visualization and tracking capabilities.
• Supplier risk management.
• Supply chain incidents quick response capability.
• Smart procurement, etc.

Logistics 4.0 capability model

In the early stage of the action, to establish a hierarchical Logistics 4.0 capability model that meets the characteristics of the enterprise industry and individual needs, so as to sort out and clarify the core logistics capabilities, key action areas and verification standards that the enterprise should have at different stages of action, and use it as a basis of establishing further roadmap for the action. The effectiveness of the Logistics 4.0 capability model as a tool to help and guide enterprises to achieve Logistics 4.0 upgrade has been proven in the past customer practices of Leanfour Technologies.

Contact Leanfour to get more information about how our expert team can help enterprise establish Logistics 4.0 capability model and development roadmap.