Table of Contents
Logistics is primarily driven by the interests and demands of customers related to the specific industry. Logistics service providers often face severe competition, which in turn forces them to innovate their internal decision making systems to allow better flexibility to adjust with the external business environment. Open innovation methods can be helpful to develop the innovation process through the help of outsourcing from external resources. Logistics operations also need to be aligned with customers’ requirements, in order to be effective (Kersten, Blecker, & Ringle, 2015). A significant measure taken in this regard is that of technology infusion, which has not only assisted modern organisations to enhance the efficiency of their logistics systems but has also initiated another dimension of customer services initiatives. As a result, the logistics market has expanded to hi-tech technology revolution. In this milieu, modern warehouses use advanced software to take account of data base management. It consists of delivered materials, unloaded materials, freight documents, check in materials, regular orders, transfer orders and direct shipments among others. The use of robotic technology has also proven helpful when multitasking, by accelerating the growth of logistics and simultaneously, reducing the operating costs incurred through the process (Rossum, 2016).
The discussion further aims to describe the impacts of modern day technology in the transformation of primitive ways of logistics, consequences of technological advancements on environment, and the differences between operations of human driven machineries and automation by using Melnyk’s Model, taking the examples of Rio Tinto (auto vehicles), Amazon (robotics), China Railways (high-speed rail) and DHL (bio-fuel). To be noted in this regard, the Melnyk’s model helped to analyze the supply chain outcomes in alignment with the customers’ needs based on the six parameters of cost, responsiveness, resilience, innovation, security and sustainability (Melnyk, David, Spekman,& Sandor, 2010).
Supply chain management involves the use of strategies, needed to improve the flow of raw materials and simultaneously ensure timely delivery of the final products in the market. The parameters that can be used to determine about the effectives of supply chain include cost, responsiveness, security, sustainability, resilience and innovation (Melnyk et al., 2010).
Rio Tinto’s Autonomous Trucks
Rio Tinto is one of the World’s most famous mine and operation companies. The company is renowned for technological innovations, building industry partnerships abroad and creating customers in local communities. The company marginalizes the use of bio fuel and aluminium, generated from the use of hydropower that emits low-carbon dioxide (Rio Tinto, 2017)
Rio Tinto’s mining operations are conducted through hauling and mining of the iron ore, diamonds, minerals, and aluminium. Rio Tinto’s plant in West Angeles, Australia hauls raw materials with self driving trucks. Autonomous machines transports iron ore all around the day, which reduces the need for human miners and helps in cost reduction with the use of robotic technology. The trucks can track obstacles with the use of laser and radar sensors and navigate precisely with the help of GPS, making the transition smoother and faster (Simonite, 2016).
Rio Tinto Borate mines produce fifty percent of world’s products made of refined borate that cater kernite, tincal, colemanite, and ulexite in greatest demand. The process consists of automated trucks and machines for shovelling and blasting, hauling borate to crushing machine. Each of Rio Tinto site is certified by ISO 14001. The company has developed intelligent computer programs to set mine blast and drill plans. Automated shovels help to load the ore to the haul truck. Rio Tinto automated haul truck carry the ores to the factory. Sustainability is provided in the case of borate processing, as it uses recycled water. The company was able to lessen the use of bio gas and managed waste production (Rio Tinto, 2017).
Correspondingly, Rio Tinto’s Dunkerque aluminium plant is Europe’s top aluminium producer, which is located in France. It concentrates on energy saving and technology solutions for better output of engineering services, smelting automated machinery sales along with aluminium smelting and services (Rio Tinto, 2017). The efficiency of automated trucks of Rio Tinto has been evaluated with the application of the Melnyk’s Model, as depicted in the table below.
|Cost||High||Cost effectiveness of automated trucks is high. Use of auto vehicle is more secure than driver run vehicle as it maintains average speed and can run twenty four hours consecutively (Ross, 2017). Employee cost can be omitted and operational cost of the truck is unsubstantial (Bellamy & Pravica, 2010, pp. 149)|
|Responsiveness||High||The responsiveness of the automated trucks is high. Driverless auto vehicles costs less as it increases time availability and needs lesser manpower to operate. The effectiveness of the vehicle is to increase freight movement. These trucks can maintain delivery sequence of the freight with given tasks without error (Ghosh, 2016)|
|Security||High||Auto vehicles have fewer possibilities to occur accident with higher cognizance and discipline than human beings. Automated trucks also use GPS and radar sensors to project road way and identify obstacles with changing circumstances. Three-dimensional camera and structural light camera are useful to determine collision related visuals and unnecessary use of other vehicle (Hedenberg & Astrand, 2016)|
|Sustainability||High||Automated long haul trucks never cause higher amounts of emission, as it runs at an official speed. Auto vehicle meets environmental guidance for the maintenance of carbon footprint, running hours, maintenance, and connected to sensor technology that can operate through various routes (Manners-Bell, 2017)|
|Resilience||High||Supply chain management risks are one of the major aspects of auto vehicle logistics. Artificial intelligence, in this context, helps to avoid failure of logistics sequences and deadlines (Bostrom, 2014)|
|Innovation||High||Innovation is high in auto vehicle sector of logistics, as organisational benefits are best served with automated intelligence. Rio Tinto is expanding rapidly into the markets of Europe, USA and Australia for its innovative approach towards importing automated trucks. It is connected to a computer based personalized system of the organization for order loading and dumping of the freight (Matysek & Fisher, 2016)|
Table 1: Analysis of Logistics (Rio Tinto)
China Railway’s High Speed Rail Network
China Railways offers logistics services pertaining to the movement of freight and cargo. The basic characteristics pertaining to China Railway is its high speed rail network that enables to transport goods at a faster rate and at a lower cost. One of the most important features of the logistics services provided by China Railway is that it operates at the international level. Other than China, the high speed rail operates in parts of Europe. The railway network is connected to Europe via Kazakhstan and Russia. Moreover, the link between China and Europe is connected by means of the Silk route. The railway track that connects Europe and China is categorised as High Speed 1 and the total distance that is covered by China Railway is above 30,000 kilometres, starting from China to Europe. China Railway has also built a 12,000 kilometres of network that originates from China and enters Russia by means of the Trans Siberian route. Such initiatives are supposed to enhance the chances of export and import due to prevalence of high speed railway network at the international level (Bloomberg News, 2017; Brunel Shipping, n.d.).
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A consortium of various railway firms of China is observed to take the initiative for building up a high speed railway in the USA. Deals have been signed between the US based organisation-XpressWest and the China Railway International U.S.A. China Railway International U.S.A consists of various state owned firms consisting of China Railway Group. The benefit of this high speed railway network is that in the USA, transportation of freights can take place rapidly. Moreover, ongoing discussions are prevalent which mentions about connecting China and the USA by means of high speed rail network. This reflects the goodwill of China Railway to build high speed network at the international level. China Railway is supposed to build a high speed route that will start from China and eventually enter continental USA via Canada and Alaska. The speed of high speed rail in this route will be approximately 220 miles on an hourly basis (Hallemann, 2014; Reuters, 2015). Another deal is to be made between China Railway and the US government that will connect Las Vegas and Los Angeles and enable transportation of cargoes at a high speed. The total distance over which the railway network is supposed to run is 230 miles. Such huge potential of China Railway to build high speed rail is a remarkable footprint to strengthen international relations by promoting movement of freight for export and import (Shoemaker, 2017).
China Railway also operates in Australia and has taken the responsibility of building a high speed rail. The organization has proposed the railways department in Australia to spent AUD $7billion for building tunnels. The high speed railway is supposed to connect the parts of southern and western part of Wales. It is depicted that due to such high speed rail the movement of goods and individuals will take place at a rapid rate. China Railway also got engaged for construction of high speed rail network in the second Sydney Harbour. This project will be undertaken by a private organization of China and backed up by the state railways (of China) (Shanghaiist, 2016; McGowan, 2016). The high speed railway network of China Railway can be analyzed using Melnyk et al. (2010) model in the following manner:
|Cost||High||The cost incurred on setting of high speed railway in all the three areas is costly for China Railway as the construction has to be done in abroad areas. In the same manner, higher costs have to be incurred for maintenance of the tracks and rails (Rus & Nombela, 2006; Rus &Palmas, 2008)|
|Responsiveness||High||The responsiveness of high speed rail is high, considering that Europe, the USA and Australia are willing construction of high speed rail that will lead to quick movement of freight (Shanghaiist, 2016; Shoemaker, 2017; Bloomberg News, 2017)|
|Security||High||Need to undertake proper surveillance so that chances of accident reduces substantially due to derailing or adverse weather conditions (Chopade & Sharma, 2013)|
|Sustainability||High||China railway has to ensure that the construction process is sustainable and does not cause environmental degradation. Similarly, the high speed train must minimize emission of green house gases (GSIA, 2016; Newman, 2016; Phillips, 2017)|
|Resilience||High||This will enable faster movement of individuals, which in turn will reduce the supply chain risks (for example, delays) faced by the parties involved in movement of goods (Albalate, Bell, & Fageda, 2014)|
|Innovation||High||High speed rail is a matter of innovation made by China railway that connects long distances often between continents such as Europe and China. The model of high speed rail developed by China railway is now increasingly adopted by other nations (Brunel Shipping, n.d.)|
Table 2: Analysis of Logistics (China Railway)
The German based logistics organization operates in the UK. The organization has been focused intensively on the usage of bio-fuels in the logistics chain, so that it can help reduce the harm caused to the environment. DHL has used cooking oil and bio-gas in its vehicles for transportation of goods. The logistics company has also focused on the achievement of the target set by the European Union on the use of renewable sources of energy. As per the standards set by the European Union, it is important that 10% of the energy must be sourced from renewable sources in case of transportation, which DHL has apparently achieved. The organization is aiming to reduce the emission of carbon dioxide by around 30% at 2020 (Morrison, 2009). In the UK, DHL, D Wetherspoon and Argent Energy have signed a deal so that the logistics company can obtain the adequate supply of bio-fuels. The innovation brought about in logistics is important for reducing emission of green house gases (Post & Parcel, 2007).
In 2013, the total number of DHL vehicles that operated on alternative fuel was 3000 in the UK. Additionally, the use of cellulosic biomass feedstock is another biofuel that has gained popularity in logistics pertaining to DHL. Cellulosic biomass feedstock is a bio-fuel made from glucose (McKinnon, Browne, Piecyk & Whitening, 2015). Pertaining to the European context, DHL uses alternative sources of fuel in case of aviation, which is responsible to reduce carbon foot print (Hardcastle, 2016). DHL is also observed to focus immensely on reducing environmental pollution in the context of the USA. The trucks, which are used by DHL, are also observed to run on bio-fuel so that damages to the environment can be reduced. To be noted in this context, the logistics operations in the USA are guided business by a set of guidelines set by the head office at Germany. By the end of 2012, DHL was able to offer logistics services in most of the US-based nations in an eco-friendly manner (Deutsche Post DHL, n.d.).
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In the Australian market, DHL focuses on cutting down the emission of carbon caused due to burning of fossil fuels. The initiative used by DHL to reduce carbon footprint is better termed as GOGREEN initiative. Most importantly, DHL is observed to engage the customers in the decision making process so that better means of using bio-fuels can be developed. Usage of alternative sources has not only reduced emission of carbon dioxide but has also other gases used in its process, such as methane and nitrogen based gases. In Australia, DHL focuses on adopting an optimal route that is useful in reducing the emission of green house gases (DHL International GmbH, 2017). The model proposed by Melnyk et al. (2010) can be used to trace about the effectiveness of bio-fuel usage pertaining to DHL.
|Cost||High||The cost that has to be incurred by DHL is high, as the production of bio-fuel is expensive (Abosede, Peter, &Adunola, 2017; Hill, Nelson, Tilman, Polasky, & Tiffany, 2006)|
|Responsiveness||High||The demand of bio-fuel usage is widely acceptable in the present era. It is especially because bio-fuels reduce fewer amounts of green house gases such as carbon dioxide as compared to hydrocarbons (petrol and diesel). Thus, Europe, the USA and Australia are expected to respond highly to bio-fuel usage (Lee, Tong, Cheston, Yi, & Olaganathan, 2014)|
|Security||High||DHL is observed to effectively bring out a balance between fossil and bio-fuels, so that transportation does not delay. For example, sufficient number of trucks are present that will provide logistics services, and runs on fossil fuels (Morrison, 2009)|
|Sustainability||High||Use of bio-fuels is highly sustainable, as it leads to reduction in carbon emission (Worldwatch Institute, 2012)|
|Resilience||High||Adoption of wide scale use of bio-fuels enables DHL to cope with the emission standards (Morrison, 2009)|
|Innovation||High||DHL adopts innovation by adopting standards that are useful in reducing emission by using bio-fuel (Hardcastle, 2016)|
Table 3: Analysis of Logistics (DHL)
The warehousing system adopted by Amazon uses intelligent systems with the help of robots. In the UK, Amazon uses robots for conducting various tasks in its warehouse, such as carrying weight and moving them in and around the warehouse. Use of robots has reduced the wastage of time and therefore, enhancing efficiency of its entire logistics system (Armstrong, 2016). Transformation of industrial work structure of Amazon begins at Robbinsville, New Jersey, USA. Amazon’s operations have apparently changed the perceptions of human workers on how technology can assist their manual tasks. It has diminished the labour market significance, wherein warehouse inventory is full with square shaped shelves that contain packaged products. Previously, the workers at the warehouse used to roam to find shelves for each demanded order, which was a time consuming process. By replacing the human carriers with small robots, the entire warehousing process has become more synchronised, helping employees to replace products for packaging or add new products in a more time convenient manner. Amazon’s robots can balance the products queued within a tight space. These can assist by bringing products to pickers with precision and settle empty shells to packers (Knight, 2015).
This process is much simpler than manual employee operations and is also a fine example of combining human labour with automation. Robots were used for repetitive tasks for decades, which is presently used to the work of reasoning with sensors, computer chips, algorithms and actuators. Amazon acquired Kiva systems for further innovation. The robots were also operated by a central processor settled in a computer and by using markers. Amazon focuses on future automation of self-picked capabilities of its robots. Recent programming of robots has therefore been based on human robot collaboration. Some companies are inspired by the human improvised robots of Amazon and develop the robots for using it in regular activities. Amazon warehouses operate through automation, controlled by the employees to trace an order arrival to the point of dispatch of the product through a customized computer programming. Computer view finder is also used to recognize the unpacked products, while employees’ at Amazon use computer programming to pack products. Product characterization of a customer is automatically identified from shelves for sorting an ordered batch, whereby the warehouse computer smartly accesses the size and dimension of products to wrap and weigh the package for final delivery (Knight, 2015).
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The CEO of Amazon, Jeff Bezos started his drone delivery initially in the USA. Later, the UK based Amazon centre had built launch pads for drones. These drones are capable of conveying light-weight products, flying at a visible range and tracking customer destination through GPS. Amazon is set to expand its robotic technology used at warehousing in Essex, UK. To be noted in this regard, space reduction and fast processing of orders is the prime target to open the technologically advanced fulfilment centre, whereby Amazon is technologically expanding to afford its own shipping facility to disrupt well positioned parcel companies. Online tycoon Amazon’s Australian division is planning to develop robotic technology for its fulfilment centre (BBC, 2017). Applying the Melnyk’s Model, a better insight can be obtained from this context.
|Cost||High||Cost and operation of robotics and automation help Amazon digital warehouse to reduce its excess costs. Robotics minimizes warehouse operation area to add more stocking opportunities (Logananthara, Palm, & Ali, 2000)|
|Responsiveness||High||Demand of Robotics in warehouse logistics is well accustomed in the modern era. Ware house responsiveness is related to the frequency of orders, availability rate and time aperture (Van Den Berg, 2007)|
|Security||High||The use of artificial intelligence in the warehouse is secured than the human operation (Knight, 2015)|
|Sustainability||High||Drones, in the form of delivering products and robotics for keeping warehouse operations sorted, lessen the use of fuel and excess energy consumption on a daily basis. It triggers major environmental problems and supports sustainable development (Soyka, Palevich, & Leon, 2013)|
|Resilience||High||Supply chain in intelligent and knowledge warehouses reduces the chances of error in day to day logistics with the help of meta knowledge to support system producing software (De Pablos, 2012)|
|Innovation||High||Amazon innovates by dividing its workforce with robotic technologies that allows other countries to pave way to achieve advanced warehouse output (Knight, 2015)|
Table 3: Analysis of Logistics (Amazon)
Logistics refer to the process of movement of goods from one place to another. The challenges faced by the logistics organization of the present day are those pertaining to increasing costs. It has become important that innovation has to be brought in logistics so that the goods are transported at low cost and time. Logistics can be regarded as a part of the supply chain management of any organization, owing to which it is important to install systems that enables faster movements of raw materials and simultaneously ensures that the final products are distributed in the market within a short span of time. For instance, the warehouses of present day organizations use advanced software systems to enable effective database management. Robots are also vitally important because it can perform multitasking, making the process more time efficient and effective.
Drones can be regarded as another technology, which is important in last mile delivery, especially in the congested areas. This is because drones follow the aerial route to deliver at door steps of the customers. Contextually thus, it can be observed that China Railway concentrates extremely on increasing the speed of the logistics, wherein the organization has made significant investments in the USA, Australia and Europe to commence the service of high speed rail. High speed rail has been well accepted, by the USA and Australia, as it enables faster movement of goods and people. On the other hand, DHL has incorporated innovation in its logistics system by using bio-fuel during transportation. The measure has reduced carbon footprint of DHL and has therefore been appreciated in Europe, Australia and the USA. Rio Tinto has also used automated trucks that can operate for twenty four hours as there is no need of drivers. Low prevalence of errors has in turn increased the usage of automated trucks in the logistics facility of Rio Tinto. Another pioneer in the logistics industry, Amazon has also started to use robots in warehouse management that has made it possible to shift heavy loads within a shorter span. It is infact an example of intelligent warehousing system that has gained importance today.
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