The development of new transportation networks has a profound impact on the organization of our societies, changing the relationship between physical goods and people, and in turn changing the institutions that govern our societies.
Since the nineteenth century railroads to the twentieth century highways and airports, transport networks have brought communities and services together and changed the face of the economy. However, these networks and the modes of transport that travel on them are anything but static. As new technologies emerge, and society’s preferences change, transportation networks expand and evolve to meet these changes, facilitating the transmission of people, goods and information until a new paradigm arrives that undermines the utility of the prevailing network.
The internet is clearly this century’s innovative, paradigm changing transportation network. Though it differs from previous networks as a virtual, rather than physical, conduit, its impact on the organization of goods in the physical world is perhaps as profound as any transportation network that preceded it. Almost everyone understands the internet’s utility in the transfer of digital goods and services, but for most people, the impact of the internet on the physical world is largely invisible. Buying things online has become so easy and natural that most possess only a vague idea of how items get to our homes after we’ve received a confirmation on our phone or computer screens.
Supporting E-Commerce in the Physical World
To provide an example, when someone asks me what I do for a living, rather than tell them I work in logistics infrastructure, I respond by asking them one question: “Do you shop online?” Typically, the person laughs or smiles and replies that they do – to which I respond, “my company builds the buildings that store the items you buy online”.
The conversation usually expands from there and I explain that LOGOS develops buildings that store goods ranging from industrial to consumer use. We develop property infrastructure in the physical world to underpin the network infrastructure in the virtual world. As the internet’s maturation as a transportation network drives ecommerce to inhabit more and more aspects of our lives, physical and virtual worlds are converging into a single channel – our experiences online manifest with ever greater speed and efficiency in “real” life.
While the internet has been paramount in enabling the blend of our virtual and physical worlds, it would have remained a concept without complementary changes taking place in supply chain infrastructure.
Today global supply chain networks are not only comprised of traditional transportation networks of rail, roads, sea and air, but they are also supported by logistics warehouses (regional distribution and urban fulfillment centers) that function as organizational centers and staging grounds for high volumes of product. Whether it be a large footprint distribution center in industrial zones outside city limits, or a last mile fulfillment center tucked among shops, homes and offices, the logistics infrastructure plays a critical role in supporting the growth of ecommerce. Shifting patterns in consumption and consumer expectations mean that logistics infrastructure will play an increasingly large role in our future economy, with warehouses of all shapes and sizes replacing shopfronts or, in the case of “consumer engagement spaces” focused on establishing a consumer’s personal connection to a brand and minimizing on-hand inventory, complementing them.
Helping Along an APAC Convergence
LOGOS’ presence across Asia Pacific is directly linked to these broader trends already taking place. From China to Australia, trade amongst Asia-Pacific nations is increasing, with the region in the nascent stages of re-forming a common sphere of economic interest. As the domestic economies of Asia-Pacific nations become more intertwined, so inevitably will their supply chains.
LOGOS’ role in this multifaceted process is to design and build the often unseen but critical property infrastructure that forms a crucial part of trade in the twenty-first century. Across the region, LOGOS is developing next-generation facilities in areas of strategic significance to support our customers’ growth in exciting new markets.
These modern buildings will contribute to a virtuous circle of innovation as “virtual” networks integrate with hard property ones. For example, IoT (internet of things) technology will enable better visibility into the supply chain by automatically tracking containers, trucks, or even drones as these vehicles move in and out of logistics parks. This has wide ranging implications from inventory management, product safety, to even fuel savings through more efficient transportation management. Maximizing internal process efficiency will drive warehouse “box” design in the future with new technologies at the center of these changes.
Removing Obstacles to the Era of Zero Inventory
As artificial intelligence (AI) in the ecommerce space develops, modern distribution centers may become value-added centers where experimentation with 3-D printing, “Batch Size 1”, or “Zero Inventory” occurs. AI’s application in ecommerce may also be oriented towards predicting future consumer behavior. For example, based on previous purchase history, an ecommerce AI might suggest new products or even tailor individual products to a specific customer.
The “Batch Size 1” concept essentially is the logical end of ultra-customization – literally, commissioning the manufacture of just one single item for one customer. Some 3-D printing may occur in homes or retail outlets but when significant scale is required large fulfillment centers are a natural choice for this to take place. In these facilities, mass-produced products, or highly customized goods manufactured with 3-D printers, may all be prepared for shipment together.
The dream of “Zero Inventory” is also becoming more of a possibility. The concept of “Zero Inventory” is that as data streams allow for real-time forecasting and as the underlying property, transportation, and manufacturing infrastructure are flexible enough to accommodate the mandates of these data streams, holding inventory can drop to almost nothing. This is the goal currently being pursued by global fast fashion brands as it would allow them to decrease costs throughout the supply chain while at the same time freeing up valuable real estate, manufacturing, transportation, and human resources to be deployed elsewhere.
The internet has transformed modern society through its ability to blur the line between the physical and the virtual. We can video-chat with friends and family half a world away, gain an artistic or political following of people from every corner of the world, and launch successful businesses and careers without getting out of our pajamas.
Just as the internet has changed the way people interact with one another, so has it dramatically altered the way we organize the physical world. And with a litany of technologies on the horizon poised to accelerate that reorganization and make the world more efficient, transparent, and sustainable, we will need physical solutions that can accommodate these changes. LOGOS is ready, constantly stretching our thinking and updating our building designs to make sure we are in the best position to help shepherd in this exciting future. We can’t wait to participate in what happens next, whatever form it might take.
This sponsored feature was contributed by logistics specialist, LOGOS. To learn more, visit www.logosproperty.com