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The Logistics Landscape Past. Present. Future.

The Logistics Landscape

Past. Present. Future.

As an industry, logistics traces its beginnings to mainly military applications before 1950s. It was simple and direct then. It predominantly refers to the physical movement of materials and goods from one point to the other. Since then, in tandem with the advancement of technology, changes in lifestyles and consumption behaviours have brought about significant transformation in the industry.

PAST

1950s to 1970s: Rapid Economic Growth

General Outlook

In the post war era, many economies such as the U.S. and Japan experienced rapid growth. There was great demand for raw materials and produced goods.

Logistics Landscape

Besides being highly fragmented with many small players, coordination between the purchasing, production and marketing departments was usually poor. As a result, logistics costs were high for businesses. On an individual firm level, the cost could amount to 32% of sales1. The common transportation modes used were shipping by sea and rail, as the cost for shipping by air was prohibitively high and roads network in many places were not well developed.

1980s and 1990s: Structured Goods Handling

General Outlook

The economy continued to grow at a fast pace and businesses were looking to manage their logistics costs more effectively. Achieving economies of scope and scale was a priority.

Logistics Landscape

Logistics handling became more organised. Retailers consolidated their store deliveries through new distribution centres. From a highly-fragmented system, tasks became divided into two distinct functions: materials management and physical distribution. The common transportation modes used remained largely the same with increasing emphasis on roads network. Faster computing speeds and cellular network empowered better planning and communication between stakeholders, giving rise to the growth of intermodal distribution.

Did you know?

Did you know? In response to growing demand for supply chain management solutions, YCH Group developed three supply chain services, Intribution™, Intrabution™, and Retrogistics™, to ensure that the needs of their clients were addressed at every stage.

1 Lalonde and Zinszer, 1976.

PRESENT

2000s: E-Commerce Boom

General Outlook

Globalisation continued to be a central strategy for many businesses. However, intensifying competition brought about by slower economic growth, as well as rising fuel prices gave rise to greater sensitivity to costs.

Logistics Landscape

The concept of supply chain management was coined. Logistics companies looked to technology as a means to manage complex logistics networks, including the provision of visibility to customers through RFID technology. For the first time, customers can have real-time inventory movement information. During this period, technological advancements also brought down the costs of shipping by air significantly and improved the speed of shipping by sea moderately.

2010s: Uberisation of Logistics

General Outlook

Rising labour costs and even slower growth characterises this decade. Productivity comes to the fore – both for the customers and the logistic industry players. The trend of online shopping takes off with people increasingly looking to purchase anything from groceries to books and clothes online.

Logistics Landscape

With more businesses looking for faster delivery time and value-for-money services, logistics firms find ways to automate labour and improve productivity. Along with the change in purchasing behaviours, logistics evolve to become an on-demand service with many technology firms entering the last-mile delivery segment. Many traditional logistics industry players begin to slash prices and offer services such as on-demand delivery in a bid to meet growing customers’ expectations and gain market share.

FUTURE

2020s and beyond: A Technology Game

General Outlook

Globalisation, technology advancements, heightened customer expectations and the talent crunch accentuate today’s landscape. They lead to increasing complexities within the supply chain and, more significantly, hint at the upcoming trends on the supply chain horizon.

Logistics Landscape

Technology and the use of machinery would continue to be necessary enablers to increase efficiency and accuracy as well as lessen reliance on manpower. Companies are expected to rely on robotics to automate processes and reduce manpower.

In addition, RFID technology combined with data analysis will not only bring about greater accuracy and more prompt deliveries, but also enable insights to predictive behaviours. The availability of more dynamic communication platforms, which allow high quality and timely information flow, is expected to be critical for customer satisfaction and relationship management.

Did you know?

YCH Group has introduced multiple technologies to create a “smart warehouse”.

  • The world’s first Fusionaris® – an integrated solution combining an Automated Storage and Retrieval System and Ramp-up Integrated Solution
  • Autonomous drones equipped with RFID scanners and video analytics capabilities to fully automate the manual counting process and relieve warehouse operators
  • A centralised Supply Chain Control Tower for real-time visibility across different business units

About YCH Group

Founded in 1955, YCH Group is an integrated end-to-end supply chain partner. YCH’s proprietary suite of award-winning solutions are best-in-class across industry clusters from consumer and electronics to chemical and healthcare. A strong proponent of innovation, YCH is recognised for its 7PLTMapproach in seamlessly integrating supply chain strategy with execution.

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