Smart Manufacturing

CHAPTER 6Improving Logistics Using Smart Technology

Frank Poon

Introduction: Why Logistics?

As with all physical goods in today's world, logistics and manufacturing go hand in hand, because all physical goods, be they raw materials or finished goods, have to be at the right place (e.g., factory, customer, etc.) at the right time to make a successful supply chain.

From the perspective of traditional manufacturers, logistics may not have been their primary focus for the past 30 years. This is because the traditional logistics needs of most manufacturers are primarily in two main areas: first, the logistics of getting raw materials to the factory, and second, the logistics of shipping finished goods to the retailer or business customers.

In the past 30 years, the globalization of manufacturing has made these two main areas more complex with cross-border logistics. But the majority of these manufacturers did not experience these complexities; they were shielded by companies specializing in manufacturing and logistics domains that helped lessen the brand owner's responsibilities to the complexities of globalized logistics.

A brand's logistics capability was not seen as a differentiator to the end customer. For this reason it was not a focus area of most manufacturers. In many cases, this was due to the homogeneous nature of the traditional logistics model, with primarily bulk cargo movements, relatively stable pricing, and a predictable service level. However, the attention to logistics ...