How Industry 4.0 Has Helped Advance Freight Procurement

Buzz words come and go, quickly. But it seems “Industry 4.0” might stick around for a while as manufacturers continue to search for innovative ways to improve efficiency, reduce costs, and increase their profits. Industry 4.0 has revolutionized the way companies manufacture and distribute goods. And those who were slow to join the digital transformation movement have finally realized they need to catch up by replacing manual, outdated processes which hinder agility and the ability to remain resilient during unforeseen challenges. 

 

Given how unstable and chaotic the supply chain has been over the last 24 months, experts agree that manufacturers who embrace Industry 4.0 will have a much greater chance of survival. So what exactly do manufacturers need to embrace to make their operations smarter? Industry 4.0 refers to the convergence and application of innovative digital industrial technologies, such as advanced robotics, additive manufacturing, augmented reality, simulation, cloud, integration, and cybersecurity. Two major themes stand out: AI-powered automation and real-time analytics!

AI-powered Automation

Automation helps minimize human involvement in critical processes, reducing wasted time and money. AI’s inherent ability to learn and continuously improve on-the-fly will make any manual process more efficient and productive. For example, freight procurement (a critical supply chain process) has relied on transportation RFPs to help source contracted carriers to ship goods. As with any request for proposal, many hours and human capital are used to complete the process. AI-powered automation technology has advanced freight procurement by using unique shipper attributes and proprietary algorithms to dynamically match the perfect pool of carriers to shipper loads. When the right carrier– at the right location and price– is selected for a load, the shipper reduces truckload cost, improves on-time delivery, and reduces empty miles (which supports sustainability).

 

Real-Time Data

Collecting and analyzing data in real-time opens the door to proactive and rapid, data-driven decision-making. That said, many manufacturers lack actionable data insights. For example, many transportation departments rely on static 3rd-party market data to make important freight procurement decisions. And unfortunately, this data is often outdated because the freight transportation market supply and demand is unpredictable and can fluctuate by the minute. Therefore, it is imperative that manufacturers have the means to collect and analyze real-time, 1st party data to understand what variables are impacting their transportation operations so optimizations can be made that foster learning and continuous improvement. Advanced freight procurement analytics and dashboards have recently surfaced, which provide manufacturers with a 360-degree view of truckload activity. These dashboards support Industry 4.0 with 100% data transparency, something that has been long missing within the transportation and logistics arena.