New Research: IoT Barrier to Entry Coming Down for Supply Chain Providers

Will digitalization reshuffle the deck in the marketplace of logistics services? The IT experts at AXIT, a Siemens company, believe it will. The new paper just published by the specialist for cloud-based supply chain management solutions highlights how the digital transformation is affecting the industry. The authors believe that the “fourth-party logistics” (4PL) provider model will be the main beneficiary of this trend.

No fleet of vehicles, no warehouses, no transport equipment: 4PL providers manage supply chains without any of their own assets. A business model that, only a few years ago, still occupied a mere niche market in the shadow of the big logistics companies is now experiencing an upsurge thanks to digitalization, the experts observe.

“Never before was it so easy to penetrate established markets and industries with the tools of digitalization,” the authors write. “Software is no longer a barrier.”

All this is made possible thanks to the availability of cloud-based solutions that allow businesses to manage even complex logistics networks without investing in costly in-house IT architecture. IT platforms provide 4PL providers with all the features needed to integrate network partners, manage supply chains, and safeguard processes at the click of a mouse, the experts explain – and these platforms easily accommodate innovative applications to interact with the internet of things, transport schedules, and environmental and traffic data.

In recent postings, SCMR has noted that groups like the Trusted IoT Alliance is trying to bring companies together to develop and set the standard for an open source blockchain protocol to support IoT technology in major industries worldwide.

But while transportation organizations recognize the potential of IoT to make them more efficient and profitable, new research from Inmarsat, the global mobile satellite communications provider, has revealed that many lack the skills and data-sharing processes to fully exploit the technology. Analysts told SMCR that unless these shortfalls are addressed, transportation businesses may be limiting the scope of their transformations.

The publishers believe that digitalization will shift the balance of power in the logistics industry: A truck manufacturer could soon become a transport manager, and more and more industry players could start managing their own logistics.

The AXIT expert paper “Will Digitalization Pave the Way for 4PL?” is available for free download at www.axit.de/en/expert-paper-4pl.