In our increasingly congested world, we often think of congestion as costing us time. In fact, it costs much more. According to the Centre for Economics and Business Research, between 2013 and 2030 congestion in the United States will cost citizens and companies some $2.8 trillion.That's how much it costs to stand still.
From a supply chain perspective, however, congestion can mean anything from late deliveries of parts that cause manufacturing schedules to be missed, to unhappy customers waiting for their products, to even hampering efficiency, growth and expansion at a national level. The effects hit us all in multiple ways and can literally slow down business, leaving companies worth less.
The good news is that some emerging technologies are set to help unclog our roads and get business supply chains moving more efficiently. Here are three notable examples.
The IoT is a fast-growing network of devices that communicate predetermined information about their status with one another, entirely free of human involvement. For example, a package or pallet in transportation can communicate its location within in a network. Or it can send an alarm signal to indicate that its temperature-sensitive contents are at risk of overheating. Or a vending machine can send a signal to say when, based on today's demand, it will run out of product. Each of these communications can help a business build a more accurate model of its supply chains, sometimes in near-real time.
As a consequence, shippers and recipients can know more precisely when deliveries will take place, where bottlenecks have developed in networks and what may need to happen to clear those. Even the vending machine will be replenished in time, so its owner can earn revenue instead of experiencing a stockout. What's more, as technology related to optimizing transportation routes continues to evolve, the driver who replenishes the machine may drive fewer miles and complete his or her round in less time, leaving more space on the road for others.
Long before there was an official policy at UPS®, there was an unofficial understanding—no unnecessary left turns. Left turns mean idling, which increases the time a route takes. Left turns mean going against traffic, which increases exposure to oncoming cars. Right turns are faster. Right turns save fuel.
Eventually, UPS's technology caught up with experience. The result is ORION (or On-Road Integrated Optimization and Navigation). By optimizing delivery routes in regard to distance, fuel and time, ORION saved 10 million gallons of fuel in 2016 and reduced 100,000 metric tons in CO2 emissions. It also saved an estimated $300 million to $400 million in cost avoidance.
"Before computers, engineering was about measurement and process," says Jack Levis, Senior Director of Process Management at UPS. "UPS has always believed in data, not intuition." In logistics, when shaving seconds can mean saving millions, optimization is everything—and not turning left is definitely the right thing to do. Especially when it means that large brown truck is in the road for less time and is less likely to be in front of you.
Just as companies such as Uber and Lyft have brought about massive change in personal transportation, some other companies are exploring the idea of matching the intended routes of personal drivers to the origins and destinations of packages in transit. How would it work?
Even the traditional freight forwarding industry is experiencing similar waves of change, with companies such as Coyote Logistics finding space on trucks for freight loads. It seems that the empty truck returning from a long delivery run may soon become a thing of the past, increasing the efficiency of our transportation system. Just like Lyft and Uber, trucking companies using the service benefit from price transparency, and we all benefit from fewer less-than-full trucks on our roads.
Technologies like these promise to help create more efficient supply chains in our increasingly congested world. The companies that move today to engage these technologies to optimize their operations will likely be those that will become tomorrow's supply chain successes.
To learn how UPS can help make your supply chain more efficient, click here
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