Smart cities could significantly reduce supply chain costs for enterprises. How can they achieve this, and what are the barriers standing in the way?
Navigating our most congested cities, the average commercial vehicle driver wastes 129 hours a year sitting in traffic. In supply chain speak, that’s 16 work days of inactivity—for every driver.
This delay has implications that stretch from productivity and fuel wastage to employee wellbeing. Congestion isn’t the only inhibiting factor on today’s supply chains. Most cities simply weren’t designed to handle such large numbers of vehicles, directly impacting the energy consumption and waste of logistics operations every single day.
Could smart technologies smooth the journey and clear the way forward?
Smart city initiatives
At a time when almost one in three people has a smartphone in their pocket, the concept behind smart technology is familiar. Smart city initiatives are no different: embedded technologies, in this case across a city, feed data back into a central hub, providing intelligence that can be used by organisations around the city to improve on their processes.
In London, city planners are already using information technology to curb congestion, and in 2014 they rolled out a smart parking initiative. From Singapore to San Francisco, other cities around the world are adopting similar approaches to improve processes and services.
Recall for a moment the fleet of drivers, sitting idly on the Inner Ring Road. Consider the multiple other drains on your supply chain’s efficiency and sustainability.
Now imagine how access to a constant stream of intelligence on the surrounding city would impact that.
How smart city technologies will save supply chains millions
Distributors could use traffic data to predict the most efficient time to deliver stock, improving delivery speeds and reducing fuel wastage, while autonomous vehicles reduce staffing levels and associated costs.
Smart lockers on the sides of buildings could act as a drop-off point, minimising a company’s reliance on warehousing and shortening the supply chain altogether. Such lockers could chill refrigerated items to precise temperatures, remotely monitored and controlled. Security breaches could also trigger immediate notifications, improving the security of valuable stock.
Smart stock management systems would flag items for reorder, reducing timely manual stock checks and ensuring item availability is always optimised. Items travelling to similar destinations could be transported via the same vehicles, making the most of available space and maximising the efficiency of each trip.
More value for less cost
Cost is the shade beneath every supply chain process.
According to TomTom’s Traffic Index, those 129 hours each driver spends in congestion costs UK businesses almost £1bn every year.
By enabling intelligent supply chains, smart cities provide supply chains with more value for less cost, enabling organisations to retain more profit.
To achieve this, governmental and commercial bodies are going to have to work together to properly develop and implement smart technologies across cities. But intelligent smart chains are not entirely dependent on the development of smart cities.
How to unlock a smarter supply chain
As a result of our experience designing, operating, and optimising complex supply chains for clients across a wide range of sectors, we understand the challenges enterprises typically face when developing more intelligent supply chains. Most notably, many teams lack the deep understanding necessary to effectively implement smarter processes. New technology can complicate this, increasing risk across the supply chain when not used properly.
The biggest barrier? Change rarely comes easily, and an intelligent supply chain is more than optimising existing processes. Only by rethinking their supply chains from the ground up will organisations be able to embrace intelligent supply chain transformations.
Those that do are set to have a distinct advantage over businesses that cannot see the benefits or are unwilling to rethink traditional supply chain models.
When these supply chains fail, it will be the enterprises engaging intelligent supply chains now with the supply chains of the future.
Is your enterprise ready to take the next step with smart technology? Do you have the deep understanding required to futureproof your supply chain?