Automation and application of technology in urban consolidated centers (UCC) are important approaches when managing city logistics. Utilizing augmented reality experience, artificial intelligence, and other disruptive technological innovations, such as drones and robots to manage deliveries may save time and reduces traffic. This paper analyses the significance of urban consolidated centers in managing city logistics, and explains the relationship between modern delivery trends, consumer expectations, and the growth in supply chain logistics within cities. While providing examples of cities that have implemented UCC, the paper will demonstrate how the model delivers higher operational efficiency. The discussion also provides the perspective of shared logistics and warehousing software automation for companies through augmented reality systems, artificial intelligence, data analytics, and model of reducing congestion through prioritized delivery routes for partner companies.
Automation in Urban Consolidation Center Promotes City Logistics
Urban Consolidation Center with Automation
Optimizing of interconnections between commercial cities and urban consolidated center (UCC) is critical when managing supply chain activities. Freight logistic interchanges are a fundamental expectation in urban sections of the supply chain. Automation in urban consolidated centers leads to upgraded service provision and promotes modernization of logistics processes. Therefore, actors in the logistics sectors have a responsibility of ensuring that a suitable location is achieved to establish an automation facility. Additionally, the identification of target deliverables of the facility in line with the interests of the local needs is an important factor in UCC. Based on the expectations and operations of UCC, Simoni et al (2015) define it as a logistical facility situated proximity to a city or town where consolidated product delivery services are scheduled. The authors further illustrate that a variety of other services, such as marketing and value added logistics can also be managed within UCC. Although setting up urban consolidation centers to promote logistics in cities can be expensive, the operational optimization enjoyed by an organization leads to competitive advantage in supply chain systems.
City logistics move beyond the transportation of products within urban zones. Organizations are developing innovative solutions to manage the movement of labor and goods within several jurisdictions, especially in modern commercial cities. According to Simoni et al. (2015), providing innovative response to consumer prospects and managing the movement of products within cities are expectations of an effective UCC. Accordingly, the increase of freight challenges in commercial towns is necessitating the emergence of new and innovative logistical solutions, such as the UCC. Progressive freight management models employ the UCC perspectives to achieve enhanced benefits to organizations. Advantages such as faster processing and distribution of goods and the environmental benefits through reduced emission are providing sustainable solutions in city logistics. Therefore, cities such as the Hague, Netherlands are employing sustainable solutions, including green vehicles as a response to logistical and conservation needs (Simoni et al. 2015). Notably, logistics such as electric vans and light trucks are effectively coordinated to manage traffic congestions within cities. Such perspectives are innovatively changing logistics to respond effectively to consumer trends that are oriented towards home or office deliveries, their expectations on efficiency, and environmental needs.
While some organization are utilizing virtual platforms as UCC, others are exploiting physical jurisdictions as control centers that work as interchanges in their logistics. For ease of supply chain logistics, companies have developed UCC’s closer to their targeted markets to respond efficiently to customer demands while enhancing competitive advantage. Although the case in Hague illustrates an innovative model given the planning and operations of city satellite points for centralized logistics management, cities within Brazil experience challenges in executing city logistics (Oliveira et al. 2018). As towns in Brazil and other destinations continue to struggle with the challenges of freight such as congestions, increased emission levels, and occasional road accidents, the growth of technological pay systems like mobile money and e-commerce are on the increase, creating the need for enhanced deliveries. Therefore, UCC manages effective sorting, value addition, packaging, and the movement of products to targeted markets within closed distances. Such perspectives if well embraced with greener solutions will reinvigorate distribution management to attain the expectation of the changing product delivery trends.
Figure 1 represents the findings by Oliveira et al. (2018) on the types of vehicles used in urban delivery system. It is significant to note from the results that majority of the cities have not adopted disruptive technology and automation within UCC, and hence, the challenges of congestion persist.
(Oliveira et al 2018, p. 7)
Systems Applications and Automation in UCCs
Urban logistics is becoming a growing concern for most cities. Traffic congestions, toxic emissions from the motor industry, road accidents, and human resources costs, such as salaries and allowances, influence the developing of approaches that resolve the product delivery gaps. Innovative trends from different fields are revolutionizing the logistics in cities when responding to the global trends. Bucsky (2018) demonstrates the role of city freight automation to manage logistics using sustainable and eco-friendly models. By employing emergent technological approaches, cities are effectively managing product delivery through eco-friendly models.
The manufacture of autonomous vehicles (AV) is an emergent disruptive technology that revolutionizes the transport sector. Although majority of manufacturing in this sector has been concentrated in private vehicles, their utilization saves on operational costs and environmental degradation. According to Bucsky (2018), AV have benefits, such as lower travel duration, reduced traffic congestions compared to heavy trucks, and minimized operational demands, leading to improved productivity. Simoni et al. 2018; Mabkhot et al. 2018, and Bucsky 2018, acknowledge that the utilization of greener vehicles as part of restructuring the logistics industry protect the environment from emissions. However, three viewpoints exist in the AV perspective in managing city logistics.
Lead driver convoy. Cities manage the delivery of high volume products using lead driver vehicles followed by a convoy of heavy trucks. According to Bucsky (2018), this approach control traffic and road lanes, which enhances delivery systems. Accordingly, this perspective ensures that city managers or municipal councils schedule reserved parking slots. The lead driver convoy is a better approach in managing city logistics for capacious product since it saves time and human resources, especially when scheduled within off-peak hours with limited or controlled traffic.
Self-driven vehicle. Self-driven vehicles are fully automated to deliver products without the assistance of human resource. The AV disruptive technology effectively manages city logistics since it is fitted with augmented reality and enhanced artificial intelligence to deliver products to customers. Additionally, the process saves maintenance and human resources costs (Bucsky 2018). Majority of AVs are electric propelled with limited or zero emission to the environment. Therefore, AV encourages faster logistics and deliveries across cities since it utilizes the disruptive technology system, which is a sustainable logistical approach and the friendly to environment.
Drones and robots. Drones and robots are disruptive technology approaches that can change the delivery systems for products from UCC to consumer destinations. Apart from AV, mobile picking carts, autonomous robots, and drones can improve productivity of the organization’s operations and ease the city freight systems. The technology is first and flexible when distributing products within defined locations leading to full automation of city logistics. Light cargo services such as letters, gift items, corporate file folders and other equipment can be delivered effectively using pick up robotic and drones to scheduled zones faster and conveniently without affecting city traffic (Mabkhot et al. 2018). Innovative disruptive technologies reduce wastage of time in traffic, decrease human resource costs, and enhance efficiency to satisfy the customers’ needs. Picking orders from UCC can be delivered faster and conveniently irrespective of how busy traffic is within highways.
City Inbound and Outbound Service
The fulfillment of urban logistical expectations in major cities is a challenge for organizations. Retailers, industries, and consumers expect their orders to be processed and delivered in a few hours. Therefore, city managers and logistic companies are expected to apply technology to meet the expectations quickly and efficiently. According to Mabkhot et al (2018), digitalizing manufacturing solutions for those products controlled by demand reduces the inbound and outbound logistical concerns. Accordingly, when a company produces goods as per the order received from customers and ships them directly to their destinations, storage and warehousing charges are reduced. The approach mainstreams planning processes within the operations. Mabkhot et al. (2018) aver that logistic providers should be able to forecast their routes, delivery times, and costs though artificial intelligent data analytics. City inbound or outbound services should be managed in UCC that are strategically located within manageable points, and using emergent disruptive technology.
Shared warehousing is a progressive approach that influences the operations of UCC. Organizations operate under-utilized warehousing systems, leading to wasteful reserves. Automation of warehouses can also manage the flow inbound and outbound logistics. Digitization is an important driver in warehousing because it monitors and controls product streams (Mabkhot et al. 2018). Therefore, innovation in warehouse management, such as shared platforms, product delivery integration model between delivery actors, and digitization of information streams will streamline city inbound or outbound services.
How Automation in UCCs Improve City Logistics
Automation in an important aspect in UCC since it defines the logistical flows within cities. Several approaches have been utilized to ensure that cities achieve an improved flow of traffic. The automation and system integration of UCC can lead to shared logistics. Collective logistics is a critical point in the automations of UCC across cities. Roca-Riu, Estrada, and Fernández (2016) provide a perspective that cooperation between freight handlers can simplify operations within a UCC and ease congestion in the city. Although the heterogeneous market that lead to multiple roles, products and incompatible objectives is a challenge to major UCC, Roca-Riu, Estrada, and Fernández (2016) aver that effective operative measures such as shared freight handling within cities can improve logistical flows and product delivery processes. Therefore, shared logistics can reduce the problem of congestion and enhance traffic flow since a delivery trucks can supply products for three or more companies instead of all the companies having to utilize their trucks. Accordingly, this model saves on fuel costs and leverages on the possible noise and environmental pollution.
The Brazilian perspective as provided by Oliveira et al. (2018), reveals the importance of the UCC. The findings in Figure 2 indicate that a majority of freight handlers utilize on-street parking and loading for delivery. The activities slow down transport on city roads.
(Oliveira et al 2018, p. 7)
Computer optimization in the UCC can also improve city logistics. UCC located within a city can share computer data, and hence, save on cost through shared infrastructure. For instance, two organizations aiming at delivering products to a mall in town can utilize a shared integrated platform to avoid congestion within towns. Simoni et al. (2015) indicate that configuring services of two competitors in logistics can introduce interactions that lead to more meaningful sharing of delivery data leading to the prioritization of the distances to be served by the competitors. The findings give credence to the fact that improved logistic sharing within a city reduces congestion. Although the logistic market is an open sector for all entities to invest, its restriction could lead to monopolistic tendencies of already set up companies. Therefore, controlling logistics through the automation of the UCC is essential in monitoring city logistics.
Automations in UCC can collect trade information for products, leading to faster decision making. Digitizing UCC maximizes order-picking capability and enhances accuracy. The increased picking and real-time sorting reduce error margins and subsequently boosts city logistics since single effective trips will deliver the required products without making return trips based on order or product variances. In addition, computerization of the UCC will improve sorting of orders and enable scheduled delivery during low peak hours, thereby improving logistics in cities. Automating UCC will deliver efficiency and save time. It implies that UCC will process orders and distribute them appropriately, hence improving return on investment for the organization. Enhanced profitability improves city logistics since an organization can schedule the purchase of superior technological equipment such as delivery drones and robots.
Spain has implemented the UCC model in the city council of L’Hospitalet de Llobregat. The UCCs were located between 10 km and 200 km away for the main service (Roca-Riu & Estrada 2012). The operational objective of implementing the UCC was to attain reduced costs, manage the number of vehicles within the area, and handle congestions. Other objectives were to manage environmental issues, including noise pollution. The UCC were developed to support products in sectors such as leisure, catering services, construction or home materials and other collective establishments. According to the results of the case study by Roca-Riu and Estrada (2012), UCC achieved substantial savings on operational costs, logistics management, and environmental protections in the city council of L’Hospitalet de Llobregat.
The data outlined in the study demonstrates that UCC saves the cost of between 10-12 percent when compared to the ordinary operations. Some of the charges covered include terminal machines, personnel, and information technology outlays (Roca-Riu & Estrada 2012). The results carried in the perspective of Roca-Riu and Estrada (2012) endorses the benefits of automations of the UCC in managing city logistics and products delivery to customers.
Figure 3 by Roca-Riu, Estrada and Fernández (2016, p. 381), confirms the argument that the distance of a UCC and the number of logistics players that serve it reduces the cost. The authors contend that UCC automations can enhance city logistics.
(Roca-Riu, Estrada and Fernández 2016, p. 381),
From another evaluation carried in the city of Barcelona, Roca-Riu, Estrada, and Fernández (2016, p. 374) posit that the UCC approach enhances businesses. The results of Roca-Riu, Estrada, and Fernández (2016) concur with those of Roca-Riu and Estrada (2012) that shared logistics and UCC automation have significant gain in operational savings and enhanced delivery systems leading to competitive advantage.
Challenges and Future UCC Prospects
Several operational and cost challenges are evident when implementing effective UCC models. Although the illustration on logistical cost summarizes the classification administration costs, warehousing, and inventory, they can be merged into transport and warehousing costs. Significant challenges in the UCC automation exist in the areas of software application, disruptive technology, equipment management, and coordination systems in the supply chain. Software synchronization, such as cloud coordinated operations and the enterprise resource planning (ERP) for UCC are expensive and require frequent upgrade. Additionally, the expected level or technical and academic expertise in managing such integrated applications is not cost effective. Digital coordination through utilization of cloud wireless systems and other approaches, such as Google maps in delivery system require servers to coordinate robots and drones applications to deliver products conveniently. Drones and robots are costly to operate and to maintain and follow strict licensing regulations making it expensive for organizations working in congested cities.
Although Simoni et al. (2015) and Bucsky (2018) recommend green vehicles, such as the utilization of AV, their increase in cities have the potential to complicate congestion issues. Therefore, drones and robots have better future prospects in delivery systems, although they are managed using expensive applications. Other challenges include over utilization of technology trends without the consumption of human resource at the workplace. A crisis with a potential to destroy the progress of technology and digital innovation is likely to occur due to increased levels of unemployment.
Future development in optimization will revolutionize city logistic services. Monitoring and evaluations are expected in energy requirements with attempts expected to mainstream greener logistics. Augmented reality (AR) systems are projected to control a majority of UCC centers. The digital lifestyle might enhance information systems for consumers. Product viewing is expected to be simulated through augmented reality platforms, which will require warehousing and logistical delivery systems through enhanced software applications (Mabkhot et al. 2018). Applications such as 3D visualization will be expected to improve the consumer experience when interacting with UCC. Additionally, for the convenience and reliability of operations in UCC, artificial intelligence will be expected to control a wider range of warehousing management operations. Therefore, artificial intelligence and disruptive technology will be the main focus of UCC when managing city logistics.
As businesses accelerate towards priority and demand driven manufacturing, shared warehousing will become significant. Competition is likely to be redefined from product quality towards logistics and delivery perspectives. According to Mabkhot et al. (2018), the future operations will encourage greater transparency and enhanced networking for people, process, and machines. The broader goal of UCC automation and digitization is to achieve smart cities across the world. Therefore, efficient delivery of service, reduced emissions, and enhanced productivity will be achieved through these operational approaches.
Demand driven manufacturing processes administered on the pull principle has the potential to revolutionize the traditional supply chain systems. The model will reduce traffic, decrease emission levels, and enhance delivery of products. Digitization is significant in the management of city logistics. The efficient flow of information within cities enables the managers to analyze, monitor, plan, and control movement of data from customers and UCC and schedule decision in real-time for the benefit of organizations. Traffic congestion across cities contributes to substantial wastage of productive working hours. For instance, if an accident occurs, significant losses are recorded. Controlling delivery systems within cities is necessary to allow access to specific vehicles. The automation of UCC through software applications and utilization of disruptive technology, such as AV, drones, and robots will digitize cities. Additionally, integrated freight management system that delivers collaboration between logistic providers will go beyond what market competition is capable of and deliver unique competitive advantage to all stakeholders.