Logistics

Logistics: the evolution of a system

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Originally serving for the handling and stocking of goods, today’s logistics has now become a separate economic sector, which is well-structured and well-suited for innovation. Logistics in the IT age needs, however, new infrastructures and a new industrial culture.

The logistics concept has changed over the years, as have the ways in which goods are exchanged and handled. While the term has been traditionally used to refer to a series of activities ranging from transport to intermodality, with the possibility to travel by road, as well as to use trains, ports and airports, as well as intermodal interchange hubs, i.e. dry ports, today’s logistics has a broad range of definitions. This is where the so-called corporate or industrial logistics fits in. This was the topic of our conversation with Marco Spinedi, who is an economist and logistics expert, as well as President of the Bologna dry port.

Process innovation

Whether it concerns distribution logistics, dealing with the final product, or the raw materials logistics, which thus involves the supply chain, corporate logistics has a double face. It can concern spaces and systems for dedicated storage and handling inside companies, as well as transport services and management services storage and interchange warehouses, that are provided by logistics operators.

“In both cases, major change is currently underway,” says Spinedi. “The most innovative elements in logistics companies concern goods handling and storage inside the warehouse, as well as the loading and unloading of transport vehicles. Process robotics is the dynamic ongoing trend, with increasingly less personnel employed and more and more machines working autonomously and being operated by software and control engineering systems. This innovative process concerns industrial logistics, too”.

This evolution and the introduction of the innovations mentioned above aim to improve processes, reduce costs and make the entire logistic and warehouse management chain more efficient, thereby reducing storage costs and optimizing the efficiency of corporate activities from several viewpoints.

The way towards digitalization

In recent years, resorting to digitalization and new technologies has been at the basis of the development of these new processes. In Italy, it has been favoured by measures, like the ones foreseen by the Italian Industry 4.0 Plan that supported new investments. As stressed by Spinedi, “the possibility to move towards new technologies has undoubtedly been key to make the logistic companies’ supply on the one hand and industries’ demand on the other meet more easily. The measures introduced by the Industry 4.0 Plan,” explains Spinedi when asked about their impact on the development of logistics, “have, for instance, supported contract logistics processes, i.e. the outsourcing of logistic and supply chain activities, and 3PL and 4PL agreements between the manufacturing company and the logistic company, whereby the two agree to cooperate for the medium to long run in a win-win scenario, thereby improving the efficiency of the entire supply chain”.

New qualifications

The various types of evolutions the logistic sector is currently undergoing imply new developments also from the point of view of the required professional qualifications. It is the professional profiles involved in the management of the various logistic fields that change. If, on the one hand, increased system automation has, indeed, led to a reduction of the staff needed in certain working phases, on the other hand the same digitalization has required a different level of logistic management and the need to find personnel with new skills. “Within this framework, personnel training and qualification are of paramount importance”.

While specialized professional profiles are not required to carry out some logistic tasks, generally for production stages characterized by a low level of automation, like loading and unloading, others logistic steps have been characterized by a logistic leap, with more qualified engineers and skilled workers being in high demand. “Companies have made a significant effort to increase training and self-training activities,” continues the expert, “and today the very same school system is adapting and has started reacting positively to these needs. This is done above all and more successfully thanks to new specialization courses, i.e. ITS and Ifts, for people with a diploma and who have followed specific programmes on logistics.” Cross-sectorial professional profiles can, thus, be trained, who can well adapt to the industrial context of the type of logistics or transport activity carried out.

Working on the cultural level

Training can, therefore, be considered as one of the elements capable of giving a boost to this sector in the coming years. Much still has to be done, however, to improve several aspects. “A series of needed infrastructures will certainly have to be finalized.” In this respect, as pointed out by Spinedi, greater cooperation between the public and the private sector is desirable, as well as a more precise and timely planning and forecasting ability in the public sector, both at the national and at the local level. Spinedi reminds that “countries with a strong logistics sector, like Germany, have an efficiency and organization culture that is cross-cutting between the public and the private sector, and that plays a significant role”.

As specifically regards logistics in private manufacturing companies, an improvement has been registered, however there is the need to raise the awareness on the importance that logistics plays in the industry. “Manufacturing companies still lack the right culture. In turn, this lack of culture ends up limiting the development of logistic companies”.

The links to sustainability and safety and security

Logistics has been shown to strongly influence other aspects of the life of companies. In particular, there is a strong link between logistics and safety and security, as well as between logistics and sustainability.

“These topics are increasingly interrelated,” says Spinedi. Sustainability, especially environmental sustainability, is today even becoming a commercial promotion tool for companies, also thanks to the increased attention paid by part of the final market and society in general. “Besides the changes inside the warehouse, with the introduction of automated and robotic systems, the very same setting up of a warehouse today is carried out by taking “green” aspects into account, ranging from energy saving to environmental problems”. This implies the need to consider the aspects above “when choosing materials, energy control systems, when reducing consumptions thanks to the use of renewable energy sources, or when calculating the project’s overall environmental friendliness. Furthermore, compensation measures are often taken, i.e. the setting up of green areas or woods around the new facility. For example, as Interporto Bologna”, explains Spinedi, “ we have developed a special service, i.e. Mercitalia fast in collaboration with Ferrovie dello Stato.  This is an experimental link between Bologna and Napoli Marcianise with a high-speed train to guarantee logistic services that can be equalled to those of an express courier and for the transportation of small and light-weight packages. Several companies have uneasily to use this link and they have promoted it as a sustainable and environmentally-friendly service, a service that is gradually gaining ground”.

Besides the link to sustainability, also the relation with safety and security is equally important. A link that “has a double face. This means that logistics has a twofold connection with safety and security. On the one hand, there is the issue of safety on the workplace: in this regard, the automation, control and adjustment system should, indeed, help reduce the risk of accidents”, it being understood that all relevant legal norms must be complied with. Secondly, “a major issue is security vis-à-vis illegality and the need to sign transparency and fairness agreements – we, as a dry port, for example, have signed protocols with the companies of our area”.

This is yet another important aspect of the world of logistics, which, as has often been said, is characterized by many facets.

Service providers

Corporate logistics has radically changed in recent years, with new developments taking places in terms of management systems, logistics 4.0, new skills required from the logistics personnel and new professional profiles. Current changes also include the increasingly frequent resort to the so-called “contract logistics”, i.e. the outsourcing of logistic and supply chain activities. This means, “through medium- and long-term contracts contracting logistic services, including the storage of both new raw materials within the supply chain, and finished products, to third parties, who are also called upon to manage relations to customers, distributors and suppliers.” Marco Spinedi thinks this type of corporate logistics management is the ideal solution, however it is not at all easy to apply. As a matter of fact, he explains that “the manufacturing industry lacks a different industrial culture, having to learn through ad-hoc trained staff to manage these new contracts and build a relation based on trust that does not generate any problems with final customers or suppliers. The manufacturing industry should have the capacity to define the contract and the logistic company should have the capacity to formulate it, so as to provide quality service and all the necessary guarantees.”

Apparently, this is an already apparently ongoing evolution, although it is still underway. “Bigger companies, i.e. multinationals or companies with a special innovation capacity and courage, are starting more strongly.”

Outsourcing Made in Italy

Latest data released by the “Gino Marchet” Contract Logistics Observatory of the School of Management of Milan Polytechnic has shown that outsourcing logistic activities and the supply chain continues to grow.

The research study on technology, organization and competences for Logistics 4.0 (i.e., “Tecnologia, organizzazione e competenze: la svolta per una Logistica 4.0”), carried out at the end of last year, highlights that 2018 is the fifth year in a row where an increase in turnover (+0.7% compared to 2017) of outsourced logistic services in Italy was registered, with these services accounting for 41.7% of all logistic activities. This increase is likely to have continued in 2019, too, with forecasts predicting a turnover of 84.5 billion euro in absolute terms, thereby registering a 500 thousand euro increase compared to 2018.

The so-called strategic contract logistics, i.e. outsourcing a large part of the logistic process to just one supplier, has registered the biggest increase. At the same, there has been a large diffusion of automation and digitalization technologies, i.e. solutions for Logistics 4.0 for the handling and storage and goods and the development of new roles within companies as a consequence of the introduction of the new technologies.

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