Industry 4.0: Building the Digital Enterprise

Behind the scenes of the world’s leading companies, a profound digital transformation is now underway.

The transportation and logistics sector is no exception.

Companies are digitizing essential functions within their internal vertical value chain, from procurement through operating activities to customer service, as well as with their horizontal partners along the supply chain.

In addition, they are enhancing their product portfolio with digital functionalities and introducing innovative, data based services.

• The proportion of transportation and logistics companies in our survey expecting to have reached an advanced level of digitisation and integration is set to increase significantly over the next five years – from 28% today to 71% by 2020.
• Companies are stepping up investment in digital operations solutions and expect to unlock significant cost reduction and revenue gains. Digitisation is already transforming the customer interface in the passenger transport part of the sector. It is also transforming the logistics and freight side of the industry but here the sector is more fragmented and progress is more uneven. Across all parts of the sector, digitisation has immense potential to deliver internal operations improvements in a wide variety of areas, including fleet repair and maintenance, capital programme management for infrastructure operators and streamlining complex roster and scheduling planning.
• Mobile, big data analytics, cloud and sensor technologies are all fast-evolving and coming of age. The use of machine learning algorithms is having a big impact on predictive maintenance and fleet management. At the same time, new innovations offer future integration and productivity opportunities. Autonomous picking and autonomous vehicles offer the potential of automated movement and transportation on-site and between sites. Drone technology is also evolving and under active exploration by a number of leading companies.

Some of these developments are happening now. Others remain for the future. But the digitisation journey in the transportation and logistics sector is already well underway and set to accelerate in the immediate period ahead.

Approaches will be different in the B2C versus B2B parts of the sector, such as passenger transport compared to warehousing and haulage. But in both, the digitization, integration and automation opportunities offered enable companies to collaborate both internally and across their value chains in ways that can provide a step change in productivity as well as design and build quality.

And they are opportunities that are increasingly important as companies seek to stay relevant as the era of digitally-connected smart infrastructure develops.