Complex processes demand ever faster response times and decisions across the entire supply chain. The concept of real-time IT is becoming a key theme, especially in the business sector of logistics, and has become a crucial component for many companies that want to make their processes more stable and efficient.
What does real-time mean?
The term “real-time IT” characterizes the operation of information technology systems that reliably deliver certain results within a very short time. Real-time data generates the highest level of transparency and forms an important basis for effective optimization, which in some processes can also take place in real time using AI. For the economic sectors of logistics and supply chain management, technological advances in this direction are proving to be a welcome tool, as manual processes are often time-consuming.
Real-time IT in supply chain and logistics
Real-time IT uses technologies such as GPS tracking or sophisticated algorithms, among others, to enable companies to comprehensively plan, schedule and monitor their logistics processes. The goal is to give supply chain managers access to trackable information at all times, such as incoming orders, raw material availability, shipping details, or the exact status of an order. Manufacturing companies require high levels of agility to respond to varying planning and production processes, and the adoption of real-time aids this by providing flexibility. Some areas where it may be useful include tracking & tracing, planning and the allocation of time slots or order management, among other things. In order picking, such systems help to ensure that the right items end up in the right package within the shortest possible time. Large companies such as FedEx, UPS and Amazon have already implemented real-time applications into their operations.
Potential benefits
Higher customer satisfaction
With customer satisfaction being one of the top goals of companies and a key competitive differentiator, many companies have realized the importance of making their processes customer centric. Real-time transportation information, for example, allows companies to provide their customers with live updates on delivery progress. In addition, short-term changes in customers’ delivery requests can be tracked and amended. As well as this, delivery schedules can be adjusted quickly. Security can also be improved through real-time IT, which in turn increases customer satisfaction.
Another example is passenger service at airports. Due to constant changes in flight schedules and changing booking numbers, passenger handling must be rescheduled continuously and dynamically. In order to always be able to deploy the available resources where they are really needed, such planning and optimization systems must therefore work in real time. As a result, airports reduce the risk of flights being severely delayed due to a lack of resources, meaning passengers remain satisfied.
Visibility and risk management go hand in hand
Real-time visibility in the supply chain helps identify risks and take countermeasures before a long-standing risk leads to major losses. For example, real-time insights into overall demand can help companies identify trends or fluctuations in need for component parts and adjust production programs or facility allocations before productivity is severely affected. Overall, mitigating risks in a timely manner leads to improved productivity, reliability, visibility, and higher profits in the long run.
The detailed and precise overview of all deployed and available resources is the best basis for a smooth process flow, even in the event of unforeseen disruptions. One example is yard management. This covers logistics on the plant site and is the link between delivery, warehouse and production logistics. If, for example, a truck’s load slips in the yard, the resulting delays can be detected with the help of a yard management system and resources rescheduled in real time. Improved visibility avoids unnecessary detours and idle time for vehicles, for example, by ensuring that they do not have to wait for the ramp occupied by the accident but are diverted directly to a new loading point.
Sustainable cost-effectiveness
Real-time insights into the location of the job are a critical factor in achieving cost efficiencies. Increased visibility optimizes routes and idle time, reducing fuel consumption and costs.
Some software applications for building materials logistics, for example, allow a transport plan to be updated in real time. This way, users benefit from more stable plans and can react quickly and flexibly to difficult situations. In addition, current information about vehicles and orders can be clearly displayed on a map in real time, providing an overview at any time. The technology therefore contributes towards improving the company’s balance sheet quickly and sustainably.
Potential challenges
Even though real-time IT can be an important factor for the future of a company’s supply chain, an introduction cannot be implemented overnight. Possible challenges that companies need to be aware of can include a lack of IT infrastructure and interfaces between software solutions. Therefore, for some companies, it makes little sense to plan all processes if there is no infrastructure to optimize them. In addition, there may be hurdles such as the cost aspect and a lack of knowledge in dealing with real-time IT. In addition, it might make sense to examine real-time IT to see if certain processes actually have a real-time requirement. For example, real-time applications are not always necessary because planning and operations do not take place 24/7.
Final thoughts
Thanks to digital transformation, applications based on real-time IT are increasingly gaining ground in many areas of supply chain and logistics. Since operations can be effectively optimized, real-time applications have already proved to be a hit for supply chains and going forward, it will continue to be a key theme. Companies should analyze their operations and infrastructure and decide if real-time IT could work for them, as they could potentially reap the benefits of this exciting development.
