Business Rules Engine Technology In Cargo Logistic

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June 25, 2024
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Rules Engine Technology In Cargo Logistic

The global cargo logistics market is a $10 trillion industry where speed and accuracy matter. Logistics companies are constantly seeking ways to improve efficiency and reduce costs in this highly competitive market. In this complexity, a powerful yet often underutilized technology is changing the game: business rules engines.

What are Rules Engines and How Do They Work?

Think of a cargo traffic control system where shipments are directed based on a set of rules. That’s what a rules engine does in the logistics world, automating decision-making processes to streamline operations.

Just like traffic lights control the flow of vehicles, rules engines control the flow of goods making real time decisions based on multiple factors.

  1. Rules: These are “IF-THEN” statements that define the conditions and actions. For example, a rule might say “IF the shipment has hazardous materials THEN route it through a specific customs checkpoint”.
  2. Facts: These are the data points that describe a shipment, such as origin, destination, contents, weight, dimensions, regulatory requirements etc.
  3. Inference Engine: This is the “brain” of the rules engine that applies the logic of the rules to the facts of the shipment. It decides what to do based on the available information.

By partially automating decision-making, rules engines help logistics companies to achieve speed, accuracy and adaptability. Decisions that took hours to process manually can now be made in seconds and free up human resources for more complex tasks.

Additionally, by removing human error from the equation, rules engines reduce the risk of costly mistakes such as misrouting shipments or non-compliance with regulations.

Cargo Logistics Challenges with Key Rules Engines Applications in Supply Chain Operations

In the cargo logistics industry, several real world challenges can be addressed by rules engines. Here are some of the challenges:

1. Regulatory Compliance

  • Challenge: The ever changing customs and trade regulations is a big challenge. Regulatory compliance issues account for up to 25% of all supply chain disruptions​
  • Solution: Rules engines can automate the process of checking shipments against the latest regulations and ensure compliance and prevent delays at borders
  • Challenge: Ensuring accuracy and compliance in logistics documents.
  • Solution: Rules engines can automate data extraction from documents using OCR and machine learning algorithms to ensure accuracy and compliance.

2. Route Optimization

  • Challenge: Efficient route planning is key to reduce transportation cost and improve delivery time, contributing to overall efficient processes. Inefficient routing can lead to increased fuel consumption and longer delivery time. An example of it might be UPS’s ORION, which helped UPS drivers avoid unnecessary turns and miles, leading to a significant reduction in fuel consumption and vehicle wear and tear. In 2016 alone, ORION helped UPS save 100 million miles and 10 million gallons of fuel
  • Solution: Rules engines can analyze real time data from GPS tracking, weather forecasts and traffic reports to determine the best routes​

3. Load Distribution

  • Challenge: Optimizing cargo load within trucks, ships or airplanes is crucial to maximize space utilization and reduce cost. Poor load distribution can lead to increased fuel consumption and higher operational cost.
  • Solution: Rules engines can consider factors like weight, dimensions and fragility to determine the best loading configuration. This ensures maximum efficiency and cost effectiveness in cargo handling.

4. Natural Disasters

  • Challenge: Natural disasters like floods and heavy rains can severely disrupt logistics networks. For example floods in New South Wales and Victoria in 2023 caused significant disruptions to supply chains​
  • Solution: Rules engines can provide alternative routing and logistics plans in real time to help companies adapt to disruptions and maintain delivery schedules.

5. Rising Fuel Costs

  • Challenge: Fuel cost is still a big economic burden. In 2023 fuel prices rose significantly and impacted transportation cost​
  • Solution: By optimizing routes and improving load efficiency, rules engines can help logistics companies mitigate the impact of rising fuel cost and stay profitable.

6. Warehouse management

  • Challenge: In logistics management, inefficient inventory tracking, poor space utilization, and high error rates in order fulfillment are significant challenges. These issues lead to increased operational costs, delayed shipments, and decreased customer satisfaction, impacting the overall efficiency of the supply chain​​.
  • Solution: Business rules engines automate warehouse processes by defining rules for inventory management, space allocation, and order processing. They ensure accurate inventory counts, optimize storage space, and streamline picking and packing, reducing errors and improving efficiency. This leads to lower operational costs and faster order fulfillment. DHL Supply Chain implemented a rules engine to manage its warehouses. By automating inventory management and order processing, DHL improved its accuracy and efficiency. This system helped reduce picking errors by 20% and improved order fulfillment speed, demonstrating the significant benefits of using rules engines in warehouse management.

7. Cybersecurity Risks

  • Challenge: The digitization of logistics operations has increased cybersecurity threats including data breaches and ransomware attacks. This is what happened with Mearsk’s NotPetya in 2017, which disrupted a huge chunk of logistics
  • Solution: Rules engines can enhance cybersecurity protocols by partially automating network activity monitoring and implementing real time security measures to prevent cyberattacks.

Rules Engines to Automate Decision Making Processes in Real Time

Transportation route target costing with analytics can result to 10-20% cost reduction. Scheduling optimization with analytics can give 25% production increase. Digital warehouse design can mean 10% savings in capital expenses. Using advanced analytics in demand forecasting can result to 5% sales increase and 15% inventory reduction. Rules engines with analytics

When rules engines are connected to GPS tracking systems, enabling real-time tracking, they can access real time location data and adjust routes dynamically based on traffic, road closures or weather disruptions. This integration ensures that shipments are always on the best route, reducing delays and cost.

IoT sensors can provide a lot of data on the condition of the cargo, temperature, humidity and handling impacts. By feeding this data to the rules engine, logistics companies can make immediate adjustments to prevent damage to sensitive goods, reroute shipments to avoid adverse conditions and comply with regulatory requirements for temperature controlled shipments.

ERP systems which manage business processes and data can interface seamlessly with rules engines to make decisions across the entire supply chain. This integration can automate adjustments to inventory levels, order processing and distribution plans in real time, to optimize resource utilization and customer satisfaction.

Summary

Rules engine is a game changer in the cargo logistics industry, revolutionizing logistics operations by enabling companies to navigate the complexities of the global supply chain better, faster, and more accurately.

By automating a certain part of decisions rules engines can help you:

  • ensure compliance,
  • optimize routes and load distribution,
  • optimize warehouse operations,
  • streamline workflows,
  • make real time adjustments.

It might be your competitive edge resulting in higher sales, increased profit, less errors, better deliverability and speed that will enhance customer satisfaction and loyalty.

Do you need a rules engine for your supply chain operations? A rules engine that’s 62-119x faster than the competition?

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