The imminent arrival of Amazon in Australia has put a spotlight firmly on the nation’s retail industry. But in the background, companies in the logistics and supply chain management space are diligently preparing for boom times.

Amazon does a roaring trade in the US, accounting for more than half of all new online spending. By 2020, investors predict its sales will be triple what they are today.

The e-commerce giant has signed a lease on a large warehouse on the outskirts of Melbourne and is promising super-fast delivery times. And Australian suppliers are ready for the challenge, experts say.

Dr Ahmad Abareshi, from RMIT’s School of Business IT and Logistics, says companies have ditched ageing legacy systems and invested in cost-efficient technologies to bolster operations and speed up deliveries.

Cloud-based technology and automation are the driving forces behind the slick transformations.

“Due to huge advantages, cloud-based services are becoming popular, especially over the last few years in Australia,” Abareshi says.

“Cloud-based technologies have great potential to create competitive advantages in logistics and supply chain management through coordination mechanisms and global networking platforms that ultimately help managers make decisions quickly and reliably.

"The discipline is moving towards higher levels of automation and this is due to a significant increase in automated labour compared to human labour."

Leading the globe


The industry’s switch to cloud-based technology has made the world take note. According to the Business Software Alliance, Australia was among the top 10 countries in the 2016 Global Cloud Computing Scorecard.

And a survey by Indian IT outsourcing firm Infosys found Australia was one of the earliest adopters of cloud technology, with 86 per cent of surveyed enterprises here using cloud in their production environment for more than a year. This compares to only 50 per cent in the US and nearly 60 per cent across Germany, France, and the UK.

Cloud technologies have overtaken traditional offline systems such as ERP (enterprise resource planning) software. They offer huge advantages for businesses looking to cut costs and, ultimately, fast-track growth. These include minimal service provider interaction and configurable resources in various operations such as applications, storage, networks, servers and services.

“Cloud services provide an excellent model for the decentralised nature of global supply chains,” Abareshi says.

While moving away from old systems in favour of new technologies is initially a costly exercise for businesses, it pays off in the long run.

“In the long-term it leads to cost savings because it gives businesses the chance to focus more on their core activities,” Abareshi says.

“New technologies can also bring other benefits such as more efficient service delivery and ultimately greater customer satisfaction, which gives you an edge over the competition.”

Primed for growth

The world’s logistics hotspots have moved from North America and Europe to Asia, putting Australia in prime position for growth. With close proximity to production powerhouse China, the nation is expected to play an increasing role in the mega-business of moving freight around the world.

Currently, industry revenue is worth $79 billion in Australia with growth of 2.4 per cent reported between 2011 and 2016. There are almost 60,000 organisations in the market, employing more than 280,700 people.

Competition in the market for more efficient and accurate freight movement for higher volumes has also seen the emergence of greater automation in the industry, currently used in a range of operations such as Computer-Integrated Manufacturing (CIM), robotics, Flexible Manufacturing System (FMS), automated guided vehicles (AGVs) and Computer-Aided Design (CAD).

Looking towards the future, the logistics industry is set to be transformed through the anticipated introduction of autonomous road transportation, or driverless trucks. While those kinds of jobs are at some risk from the automation revolution, the demand for people with higher-level logistics expertise and specialist skills will remain strong.

According to the Transport and Logistics Skills Council, the industry needs workers armed with digital skills combined with good language, literacy and numeracy skills. Jobseekers in the industry should work to develop these essentials, Abareshi says.

“Cognitive, interpersonal, and communication skills are critical, as is technical, numerical and analytical know-how,” he says.

“It’s these kinds of skills that will set you up to break into this fast-paced industry and lead the creation and implementation of efficient, effective, and sustainable strategies over the entire logistics lifecycle.”

 

First published on 20 September 2017.

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