Terence Leung, senior director of solutions with Blue Yonder, offers a vision of the future for logistics.

Manufacturers, retailers and third-party logistics providers are facing two distinct sets of challenges, short- and long-term.

In the immediate sense, says Leung, they’re up against severe labor shortages at key points in global supply chains. Medium to long term, they’re concerned with how to beat the competition through achieving greater supply chain efficiencies.

The solutions lies in digitization of the supply chain, says Leung. And logistics executives are responding accordingly. A recent survey found many installing new systems and embracing cloud infrastructure. “That’s the way of the future for flexibility and digital advancement,” Leung says. 

The biggest issue to address is the need to achieve end-to-end visibility through adoption of integrated systems and processes. In addition, warehouses and transportation providers need to achieve better agility in utilizing the limited capacity that’s available to them. “They want fewer penalties, and to improve customer service, even though the network has become more complex,” Leung says.

The benefits of digitizing omnichannel fulfillment can be dramatic. Leung says. A $1-billion company can save $14 million in transportation costs. Savings on transportation and warehousing labor can amount to some $34 million. 

It can be difficult prioritizing the necessary investments. The first objective, says Leung, is acquiring systems that enhance customer service. Yet another key goal — one that’s taking on greater importance — is compliance with new and emerging environmental, social and governance (ESG) principles.

Leung identifies five key trends in warehouse automation: a shift from “push” to “pull” fulfillment; increased use of robotics, in tandem with a hub that accepts systems from multiple vendors; dynamic pricing for carriers; digital bidding, and the adoption of logistics control towers, linked to transportation and warehouse-management systems.