Question

Discuss the future challenges and opportunities in logistics management.

Answer 1

FUTURE CHALLENGES IN LOGISTICS MANAGEMENT:

(a)  Increased fuel price: Cutting down the transportation cost has always been a major concern for the companies. Higher fuel prices would mean increment in the expenditure of the companies. Increased fuel prices would increase the surcharges added to the freight which would end up in either increasing the expenditure of the company or increasing the cost of final good.

(b) Improved customer service: Customers demand complete transparency about the tracking of their products once they purchase the order. Although the expectations of the customers have increased, their willingness to pay extra for faster delivery has decreased which ultimately puts pressure on logistics.

(c) Government regulations: Carriers in logistics often face strict regulations imposed by local, state and federal authorities and these rules are becoming more strict with time which ultimately would result in longer delivery time and decreased satisfaction for both the driver and the consumer.

(d) Shortage of Drivers: Stats show that thers is already shortage of carrier drivers in developed countries like USA and Canada and this problem will only increase in the near future. Also, retaining the current drivers sometimes also becomes a challenge.

(e) Environment issues: Government's continuous effort of sageguarding the environment and continuous imposing of regular new rules related to emission reduction has posed threat to the logistics world as companies fear that the expenses would exceed the benefits.

FUTURE OPPORTUNITIES IN LOGISTICS MANAGEMENT:

(a) Increased efficiency with autonomous fleet: One of the latest examples of this was when Amazon announced that it would launch drones for last mile deliveries. Also, most of the companies are already using automatic forklifts in their watehouses. The logistics industry may become completely dependent on autonomous fleet in the coming time.

(b) Shorter item life cycle: With the continuous changing and more advanced technology, the stock configuration is changing and therefore, the item life is shorter. Companies have already been using the advantages of just in time inventory to increase efficiency and the future opportunities of inventory management in logistics are numerous to help the companies save cost and increase the process efficiency.

(c) Data replaces fuel: Companies like Amazon believe that with the help of big data, Amazon would be able to ship the product before the consumer knows that he wants the product. It is quite a possibility that logistics industry might become a data centric industry where information from big data will increase the value proposition of logistics.