Vision of the future of logistics

The 8 logistics megatrends of Fraunhofer SCS

Recognizing and mastering future trends: thought-provoking impulse for the logistics sector

Containers and the Internet: two obvious innovations that have significantly changed logistics in the last few decades. They linked the world together, allowing for new, larger markets and an enormous growth in global trade. They made the world smaller but the opportunities for business became greater – but only for the companies that recognized the potential offered by the innovations in time and learned how to play the “keyboard” of the new age.

Knowing and recognizing significant innovations

That’s why it’s important to know today what will be state-of-the-art tomorrow. The only thing is – what will the innovations of the future be? In hindsight, significant innovations always seem to have come along as a logical progression of previous developments – they seem revolutionary, with a clear boundary between before and after. But this clarity is also there when looking back.

If we were to ask ourselves which innovations will have the same impact between now and 2030, it is quite difficult to answer the question. These “disruptive innovations,” as they are known, bring with them new functions and applications and change the rules of the market. To begin with, however, they are often underestimated and remain under the radar. If they are even perceived, their influence on the masses is still so insignificant that they are not yet a reason to rework functioning business models. Once the full force of the change is felt, however, it may be too late. That is why it is important not to miss the right time to introduce an innovation.

Current developments in the logistics sector

The prerequisite to achieving this is knowing the trends that dominate one’s own market. The Fraunhofer Center for Applied Research on Supply Chain Services SCS has spent 20 years observing the developments in logistics and is able to derive significant tendencies. We are currently focusing our research on eight megatrends that we think have the potential to change logistics significantly over the years to come.

· Digitization
· 3D printing
· Autonomous driving
· Robotics
·
Information society
·
Diversification
·
Servitization
· Sustainability 

Mastering trends – seizing chances

These megatrends will change in the future, will be complemented by new ones, or will become more or less important to the logistics sector. For this reason, they need to be checked regularly. On the whole, however, they are closely aligned to each other and are not to be considered in isolation.

Companies that wish to operate successful supply chain management in the future by defining new products, processes, and business models must take knowledge of the continuous change to and linking of trends into account. Only then will they be able to master the future.

8 megatrends in the logistics sector from the point of view of Fraunhofer SCS

All of these trends have the potential to open the way to disruptive innovations, or to become one themselves. Whether or not this happens, and when, and whether it will be relevant to the logistics sector, will be seen in the years to come. Fraunhofer SCS is concentrating its observations on the topics of digitization and a growing service orientation: these topics crop up in all trends, create the requirements to transform the value-creation chain into a value-creation network, and have the necessary impact to change the logistics market fundamentally.

Digitization

Objects are becoming smarter, thanks to new technologies, mobile computing, and the Internet of Things. New data-driven services are being developed around these smart objects with the aim of increasing the efficiency of products and processes. This transformation is combined with basic changes to business models and corporate cooperation. For logistics, in particular, there is still a great deal of research that needs to be done and action that needs to be undertaken.

3D printing

Classic production methods are being replaced by new additive methods (3D printing) that can process a greater and greater number of materials faster and faster. Almost daily, we find new practical examples of how 3D printing can be used, e.g. for constructing metal bridges, airplane parts, or vehicle chassis. The processes allow individual products to be produced down to a batch number of one, reflecting a society that continues to be more individualized. A drastically increasing number of patents indicates a high innovation potential that will change products, processes, and business models.

Autonomous driving

The necessary technologies are now mature enough that autonomous driving, for example on test tracks such as the A9, is technically feasible. Currently, the only problems are legal issues such as liability, which are connected to the participation of autonomous vehicles in public traffic. Thus, the automobile industry will change fundamentally, and this will have wide-ranging consequences for the logistics providers in the sector. Furthermore, autonomous driving opens up new possibilities when it comes to the design of processes and personnel planning in freight transport.

Robotics

Global demand for industrial robots is expected to climb by 10% per year by 2025. Germany, beside Japan, South Korea, China, and the USA, is a leading market for robot sales. The increasing spread of robots is due to their higher scope of functionality as they make use of new technologies and materials. The use of robots outside safety perimeters and in direct cooperation with humans will open up new fields of application for them, which in turn will increase productivity in the value-creation chain.

Information society

Global knowledge is growing at breakneck speed, which is witnessed by the exponential increase in the world’s data volume. Networking between humans and objects means that new data is constantly being generated and stored. It is with good reason that data is considered the raw material of the future. The task of the logistics sector will be to analyze this data and generate added value for the user, and thus to develop new products or services. The basis for this is the generation of a data space in which the data can be exchanged securely between the different actors in the value creation chain.

Diversification

Workforces are becoming more and more heterogeneous: the employment rate among 55- to 65-year-olds is on the increase, as is the proportion of women and people with a migrant background in the workforce. Heterogeneous workforces present small and medium companies, in particular, with significant challenges, but, with regard to globalization, also offer great potential. The task of the logistics sector will be to master diversity with regard to the qualification and health of employees.

Servitization

Germany is shifting from being an industrial to being a service society. Customers no longer only buy the product; they also buy the associated services. These hybrid products allow companies to improve their sales opportunities and attain a greater degree of customer loyalty. This transformation, however, is linked to significant changes to methods of customer contact and to business models. Over the next few years, the sector must ensure that it keeps tabs on the potential and challenges presented by service-oriented logistics.

Sustainability

Climate change and climate fluctuations are considered the most difficult environmental problems caused by humans. In order to attenuate the effects of climate change, governments and companies are enforcing stricter guidelines and strategies. Furthermore, customers are creating more and more demand for sustainable products and services. The task of logistics will be to develop new sustainability strategies and to make a greater contribution to reducing greenhouse gases, e.g. by using low-emission vehicles or optimizing transport paths to make them kinder to the climate.