With a background as an electrical engineer, it’s not surprising that W. Edwards Deming repurposed the ideas of connections and electric circuits as he became a business consultant.

One of his well-known theories is the “System of Profound Knowledge”, a concept that defines an organization as nothing more than a holistic system, connecting not only internal resources, but also interlinking with external stakeholders. For managing the system, four pillars are relevant: Appreciation of a system, knowledge of variation, theory of knowledge, and psychology.[1]

Deming published this concept back in 1993. But despite being almost three decades old, the philosophy sounds more modern than ever. Thanks to digital twins – virtual replicas of physical devices – his philosophy can now be practically implemented, not only in production facilities but also the office environment.

The new workforce is ready to take on AI systems

Believe it or not, Generation Z (born 1997 and later)[2] is now in the process of entering the  workforce. These employees not only grew up with the internet, but also have extensive experience with voice assistants and other forms of artificial intelligence. Accordingly, they appreciate the technology and are comfortable interacting with AI to achieve the required results. With Generation Z, the future workforce is skilled in system-thinking.

The concept of smart contracts was first defined one year after the “System of Profound Knowledge”, not by a lawyer, but the computer scientist Nick Szabo:

“A smart contract is a computerized transaction protocol that executes the terms of a contract. The general objectives of smart contract design are to satisfy common contractual conditions (such as payment terms, liens, confidentiality, and even enforcement), minimize exceptions both malicious and accidental, and minimize the need for trusted intermediaries. Related economic goals include lowering fraud loss, arbitration and enforcement costs, and other transaction costs.”[3]

As a mathematician, his definition of a legally biding document is nothing more than a rules-based algorithm.

Smart contracts can keep your company sustainable and secure

With extraterritorial laws such as the U.S. Foreign Corrupt Practices Act or the UK Modern Slavery Act 2015, companies can be held responsible for their vendors, sales agents and other partners. As a consequence, they must elaborate a code of conduct for vendors, and in parallel conduct background checks and request evidence.

The electronic signature on a contract is based on conditions. If a vendor stops complying with one or more of them, much like the effect of an electric circuit getting interrupted, the validity of the contract is disrupted.

For example, a company may require its vendors to upload an annual statement that their products are free of conflict minerals. Based on this condition, the agreement was signed. If the vendor does not comply with the deadline of the rule, the smart contract gets automatically abrogated until the issue gets resolved or the company decides to terminate the agreement.

Smart contracts can be combined with continuous monitoring, where an algorithm connects  automatically with various databases to check if a used vendor gets listed or delisted from a governmental sanction-list, is involved in a lawsuit, or negatively mentioned in the news which could lead to reputational risk.

Human interaction is still needed to execute smart contracts properly

The ideal collaboration of AI with humans is that the machine is responsible for the level 1-tasks, freeing up the human expert to focus on the level 2-priorities. Regarding smart contracts, this means that the algorithm can continuously monitor that all defined rules are still valid. The moment the AI perceives that this is no longer the case, it interrupts the smart contract and alerts the employee to analyze the situation.

The human stays in charge, and accordingly must make final decisions to confirm or dismiss the computer alert.

This requires not only that the human understands the system, but also that they are capable of critical thinking to avoid falling prey to automation bias or a general over-trust of the AI. This has become increasingly important in the current environment, where a host of disruptions have been deemed “force majeure” due to the COVID-19 pandemic.

Deming’s focus on human psychology inside the system is imperative. He says a contract is “a voluntary, deliberate, and legally binding agreement between two or more competent parties. Contracts are usually written but may be spoken or implied, and generally have to do with employment, sale or lease, or tenancy.”[4]

This broad definition should also apply to smart contracts. The province of Alberta published the “Electronic Transactions Act” in 2001. The law defines the validity of electronic contracts, including the option of “the interaction of an electronic agent and a person or by the interaction of electronic agents.” Today the wording “electronic agent” has become outdated, replaced by as the terms “automated” or “autonomous software”.

As the demands of all included parties must be ensured, it’s crucial that smart contracts need to be auditable at any time.

Blockchain technology adds an extra layer of security and transparency

Modern definitions align smart contracts with blockchain:

“A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible.”[5]

The blockchain technology promises enhanced cyber-protection for smart contracts, as the information does not get stored on just one server, but is encrypted and decentralized on numerous servers. The different machines validate each other, and any deviating information (such as a manipulated contract),  would be automatically overwritten with the correct authorized information stored on the other servers.

As expressed by “chain”, no information gets deleted, but all changes are registered with the date and time. If the smart contract is enabled to connect automatically with other databases where certifications are stored in blockchain, the contract would add those. If not, it could connect to an internal server, where vendors manually upload such documents.

In times of global anti-corruption enforcement and rising stakeholder activism, companies want to ensure that their partners continuously comply with the law and defined human rights-initiatives. As a result, more documentation and statements are required. Smart contracts are a possible solution to achieve transparency, and automatically control the needed certifications. In the spirit of W. Edwards Deming, they can act as a bridge to connect two crucial organizational systems.

[1] Deming, W. Edwards (1993): “The New Economics for Industry, Government, Education”

[2] Dimock, Michael (2019): “Defining generations: Where Millennials end and Generation Z begins”

[3] Szabo, Nick (1994): “Smart Contracts”

[4] BusinessDictionary (fetched 04.04.2020): “contract”

[5] Frankenfield, Jake (2019): “What is a Smart Contract?”

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Logistics and shipping have always been busy and rapidly transforming industries that embraced the latest technologies faster than many other industries. From the adoption of advanced car sensors to the Internet of Things (IoT) gateway and devices or the big data analytics to analyze freight and shipping data, there has been no dearth of successful efforts to incorporate new technologies to boost efficiency in the sector. No wonder logistics solutions developed by mobile app developers played a central role in this technological revolution in the sector.   

Logistics as an industry has been at the forefront of the adoption of mobility and mobile apps. From the shipping and logistics brands around the world to the businesses running their own in-house logistics solutions, the adoption of mobile apps has been widespread.  

In this context, it is vital to understand the wide-ranging implications of mobile apps for the entire logistics industry. Here are the key ways mobile apps transformed logistics operations and businesses. 

IoT, GPS, and AI

Internet of Things, Global Positioning System (GPS), and Artificial Intelligence (AI) have been among the most elementary technologies for the entire logistics sector. Thanks to the connected device ecosystem and the GPS, tracking shipments and on-road vehicles became easier than ever before. No wonder the world’s biggest logistics solution providers are now using IoT and GPS for their processes. 

In the past few years, artificial intelligence (AI) has come in a major way to help these two technologies provide more precise output. While connected transport systems can be tracked and the GPS system can deliver precise location information about the transport vehicles, AI technology can process this information along with the traffic data to guide the vehicles to take the best routes. Moreover, AI-based apps can also predict delivery timing more accurately.

Effortless warehouse management

Human errors have always been a nightmarish factor for the vast majority of logistics and shipping services and companies. Fortunately, thanks to the mobile app-based consolidated management of warehousing data and streamlined processes, the impact of such unwanted errors can largely be avoided now.  

Mobile apps facilitate automatic processing through logging equipment IDs and include storage information to make the whole system streamlined and friction less. The best thing is, logistics mobile apps can also sync all data with a central database.  

Keeping track of shipments

Thanks to mobile apps, we no longer need to check emails or the respective merchant website to track the shipment we are likely to receive. We get instant notifications on our screen and can track the shipment in real-time. Moreover, the entire process is transparent and informs us about the product shipment and arrival from time to time through mobile notification messages. 

This ease of keeping track of shipments is great for the user experience of countless customers who order products online. Moreover, shipment tracking through mobile apps also helps to boost the productivity of the entire sector. 

More e-commerce sales

Besides providing better customer experience and greater procedural simplicity, mobile apps for the logistics sector also helps to create more business opportunities simply by increasing total sales across retail and merchant apps and websites. 

Thanks to the faster and transparent delivery process that allows shipment tracking throughout the process, many retail customers order products online or through mobile apps without the slightest worry over any errors in the entire process. Moreover, the prompt confirmation of an order and notification about the shipment in the delivery process makes the whole process transparent, trustworthy and reliable. 

Cost advantage and efficiency

The mobile app development for the logistics industry can not only ensure optimum transparency and efficiency but also help reduce the task loads for logistics professionals. For example, the streamlined, transparent delivery process helps reduce the number of phone calls from customers asking for updates and information, as they always remain informed about the progress of the shipment and delivery. This helps the logistics companies to decrease costs by reducing the demand for dedicated and round the clock customer service.  

Transport operations

One of the key advantages of logistics apps is the way they help ease out transport management and operations. Any logistics service needs to handle a fleet of vehicles from various operators and transport services. By using a simple app, the logistics company can manage all these vehicles from various operators and transport services in a seamless manner. 

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For businesses across the globe, faster, secure, and more efficient transportation and product movement are non-negotiable. While businesses previously had less control over several factors to make their trucks reach destinations in time, thanks to the data-driven predictive insights, they can now take control of all aspects of product movement and transportation. 

One of the main ways they can do this is through Big Data analytics, the latest science, and technology of analyzing exponential volume and a variety of classified and unclassified data. It is providing business strategists and supply chain managers with new information they can use towards boosting efficiency, speed, and precision in goods movement, inventory management, transportation, and delivery process. A plethora of connected IoT (Internet of Things) gadgets, sensors, and real-time collaborative abilities are further providing supply chain managers with precise data and feedback to ensure efficiency. 

Here we are going to explain how both big data analytics and IoT are bringing revolution to the supply chain management. 

Providing more precise diagnostic information

Every supply chain manager knows how predictive insights about on-road transport and other challenges can help them. For mitigating transportation issues and various problems, companies always need diagnostic information. For more informed and precise decision making in the supply chain process, businesses depend heavily on quality and relevant diagnostic data. For this, Big Data analytics incorporated by app developers into smart logistics apps comes as the ideal and appropriate source of help. 

Besides providing historical data about the transport, Big Data analytics provides companies the most relevant insights on various issues ranging from slowdown or sudden hike in demands to higher rate of fuel resulting in increased cost to various contingencies. Based on these insights, companies can actually figure out a better strategy and create appropriate contingency plans for their business processes. 

Planning facilities as per precise demand forecast

All those times when most companies had no access to tools and means for making informed decisions for expanding their supply chain and warehousing facilities are gone. These days, thanks to data-driven insights, companies can make more informed decisions to establish warehousing facilities precisely as per their requirements. Artificial intelligence-based tools can help companies dealing with a plethora of variables and information. 

When companies plan to extend their reach to new places and build new distribution facilities across regions, they depend upon the structured and unstructured information they can access. From past transaction records to customer data to local business dynamics, they actually make decisions based on several factors. However, there are several ongoing factors that are not presented by historical data. This is where broader access to Big Data analytics and decision-making power of A.I. based tools feature in. 

Proactive maintenance and operation

When it comes to the efficient operation of warehousing facilities and their maintenance, Big Data tools and A.I. powered tools, coupled with connected sensors and gadgets, play a very important role. Thanks to the real-time access to information about various triggers and issues such as immediate maintenance needs of vehicles or the completion of service cycle for parts, companies now can take more proactive decisions and measures resulting in more efficiency and sure-footedness. 

The emergence of the Industrial Internet of Things (IIoT), boasting a new web of connectivity across gadgets and sensors, is helping supply chain managers to reduce downtime and make the process more streamlined. Moreover, proactive maintenance and streamlined operations are providing a better cost advantage to the businesses in respect of supply chain and transportation.

Managing risks and contingencies beyond human control

In supply chain management, the external risks and contingencies can have a significant impact, and this is where the latest Big Data analytics and A.I. powered tools can play a big role. For example, the rise of crude oil prices in the international market can play havoc with the cost of transport and logistics. In such cases, if the supply chain managers have any prior clue or hint about the possibility, they can take proactive measures to deal with the imminent contingencies.

In the same manner, there can be a sudden upsurge in demand because of a panic about shortages due to war or predictions about a flood or other natural calamity. In spite of having your regular contingency plan in place, the company may not be pressed to deal with such sudden changes all the time. This is where data-driven insights and predictions can play a significant role. 

Inventory sensors for warehouse management

For some industries where goods have a lesser shelf life, inventory and warehouse management is of supreme importance. For example, for food supplies, inventory sensors can send timely alerts about its condition, days left before expiry, and give real-time alerts about the need to restocking the food in case of need. 

Timely alerts with connected sensors will help reduce warehousing and inventory management cost for food items. This will also help to predict shortages in terms of inventory management based on previous orders. For instance, if during holidays, there is more likelihood of a spike in the demands of chicken, the connected sensors will send alerts about this. 

Artificial intelligence for a smarter workforce

The new connected technologies, coupled up with artificial intelligence and big data analytics, can also help to build a smarter and slimmer workforce focused on productivity. The IoT gadgets and sensors and AI-driven apps in logistics and supply chain management can completely reduce the burden of all the repetitive and daily tasks in the industry. 

While this reduces the workforce in some areas, these technologies will also create new job opportunities for technology experts, developers, and strategists. The entire industry, after passing through this hi-tech transformation, will settle with a more stable and expertise-driven workforce. 

Supply chain and logistics are some of the key beneficiaries of the new technological evolution. Big data analytics, the Internet of Things, and artificial intelligence together are shaping the entire industry for smarter, streamlined, cost-effective, and more efficient output.

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