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Logistics 4.0 – The Digital Supply Chain

In today’s global economy, the logistics sector has sustained considerable growth and is expected to grow further, in the years to come. Supply chain processes and transportation are critical factors for meeting the needs and demands of the global economy.

The global market has successfully delivered an agile and effective response to the crisis posed by the pandemic, through a digital supply chain, based on data-driven processes. The digitization of the supply chain incorporates warehousing, stock control, storage, tracking and other functions which can be automated and integrated into a business’ operational system. The use of Artificial Intelligence, Blockchain, augmented reality and robotics further offer a competitive edge and have revolutionized business functions, supporting companies to adapt quickly and effectively to a constantly changing business environment.

Digitization and automation help optimize warehouse and transportation workflows while offering real-time information across the entire supply chain. However, the reliance on digitization requires strong and efficient management of cyber risk, including protection from hardware failures, software breaches and cyber-attacks. Data loss or interruption of services could lead to massive economical and reputational damages. This has marked a need for integration of a solid business risk management plan to strategically prevent and mitigate risks associated with cybercrime, information management and data loss.

Standard IT logistics solutions are available off-the-shelf in a one-size-fits-all model; however, businesses are increasingly requiring tailored solutions to meet their unique needs, which they can develop in-house or commission from a third-party software provider. Insourcing - the in-house development of IT logistic solutions, can prove to be costly, requiring the employment of a specialized team of employees and the purchasing of hardware and software by the company.

A rising trend among market leaders is to entrust all logistical operations to a single supplier, thereby out-sourcing the integration of information to a third party. This can offer advantages in terms of specialization and increased adaptability to the changing business scenario. However, such a relationship, which involves critical business functions, needs to be managed through a well-defined set of contractual instruments that should include specific deliverables, contingencies for emergency situations, clearly outlined cyber risk measures, the protection of confidential information, intellectual property rights, and information security policies.

DISCLAIMER: the content of this news is for informational purposes only and neither represents, nor can be construed as a legal opinion