In organizations, it is vital to reach the customer. For this reason, logistics is considered an essential function in organizations. A general definition of logistics includes planning, production, purchasing, transportation, storage, loading and unloading, handling, packaging, processing, distribution, control, information processing, and traceability. These activities must be balanced to achieve the primary objectives of logistics. This situation requires an appropriate flow of goods/services/people/information at the right time with the right equipment/devices/competent people at the right place in the right quality and quantity to satisfy customers. Logistics should also be sustainable, flexible, and resilient.
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Technological change must be responsible and consistent with socioeconomic growth objectives. Modern digital, computerized, and networked advances have changed how organizational activities (people, machines, and automation) connect and collaborate to work efficiently.
Technologies such as AI, cloud computing, data science, the Internet of Things (IoT), and Blockchain to digitally connect and manage infrastructure can transform traditional logistics processes.
This chapter looks at the technological components of Logistics 5.0 that provide transparency and traceability in the network of logistics systems while being effective, efficient, economical, and incredibly sustainable.
Organizations have moved from traditional product tracking methods to information and communications technology (ICT)-based technology infrastructure such as cloud computing, EDI, and 5G networks, even though the problem of product visibility at each stage has not yet been fully solved. These technologies are also vulnerable to hacking and security risks because they operate with centralized database management. Another issue with these systems is the lack of connectivity and visibility of information between all logistics organizations.
Both quantitative and qualitative issues are challenging. For example, globalization and the increasing number of intermediaries between producers and customers have stretched logistics processes. In this way, it is difficult to determine where products came from and how they were shipped.
Studies have shown that knowledge gaps between logistics players affect business performance. Managing the flow of information between parties with appropriate openness and reliability is critical because logistics often consists of multiple partners, including vendors, manufacturers, distributors, and resellers. The involvement of multiple intermediaries and the lack of transparent data are at the root of several current logistics and logistics operations challenges.
Accurate demand and inventory forecasting, material planning, production scheduling, and improved inventory management require transparency and management of logistics data. The pandemic outbreak and its impact on logistics are well-known issues that brought to light the inadequacies of current methods. Initially considered a minor issue, the semiconductor shortage evolved into a global emergency affecting all industries, including consumer electronics, automotive, medical devices, and service. It highlighted and brought into public focus the crumbling infrastructure of the current logistics networks of many large, established industries. Such significant logistics disruption can impact the organization's operations and negatively affect revenue and profitability (deBodt et al., 2021). The widespread failure of the organization's logistics network hurts all organizations, regardless of their size, industry, or geographic location, and shines a spotlight on their current ineffective practices.
The main problem is the lack of easily accessible logistics data for organizations. Organizations rely on numerous vendors, often worldwide, to reduce logistics costs. The increase in risk due to the number of commodities and global vendor network has led to the addition of many complex and interconnected layers in logistics and longer logistics routes. The transparency of data at each level, as well as its quality and reliability, is critical. Sectors must integrate innovative technologies such as blockchain solutions to improve data integrity, security, and transparency and further digitize their logistics and logistics infrastructure. Blockchain would be a powerful solution for integrating logistics infrastructure due to its unique features, such as secure, traceable, and immutable information exchange in real-time. In order to use IoT and Blockchain solutions effectively, efficiently, and economically, it is essential to define a model for their use in logistics. It is important to understand the basic operating principles of the technology, as it is still relatively new and immature when it comes to addressing complicated challenges in practice.