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Evaluating Logistics Chain Technology – Australian Farmgate to Port by Access Economics Pty Limited and Maunsell Australia Pty limited
January 2005
RIRDC Publication No 04/188 RIRDC Project No AEC-31
Logistics includes activities such as packaging, documentation, communications and inventory management, in addition to the transport of goods to the waterfront.
Technology can: reduce time, costs, and staff to provide services and comply with regulations; reduce wastage, inefficiency and error; and provide prompt alerts to allow quick rectification of problems. The report explores use of technology in: (i) booking systems; (ii) tracking systems; (iii) cold chain systems; (iv) compliance & documentation systems; and, (v) ordering & payments systems.
There are some examples of use of advanced technology. But in many agricultural export industries, use of computers, the internet and advanced applications is less advanced than in manufacturing or transport. Adopting technology is not the highest priority of firms in the logistics chain. Benefits are seen as accruing elsewhere.
It is useful to evaluate regularly the progress of, and impediments to, technology adoption in the logistics chain, and to benchmark the Australian use of technology against that of our export competitors.
Many of the technologies are network dependent. Their adoption requires coordination, which is easier in consolidated than in fragmented industries. Bodies such as the Australian Logistics Council can help highlight issues relating to technology, and coordinate the adoption of network dependent technologies within the logistics industry.
Lack of advanced communications infrastructure (such as high speed internet) in regional areas can impede uptake of technologies that would benefit the whole of the export supply chain. The potential for downstream benefits may justify government support for roll-out of regional communications infrastructure.
Government regulation and the requirements of government agencies are an important stimulus to technological innovation and uptake. Governments should assess the net benefit of proposed changes prior to their introduction, taking into account the impact on risks (e.g. of sabotage or systems failure). There needs to be adequate investment in back-up to critical elements of technological systems.
Technology can assist in complying with the increasingly stringent security and food regulations around the world. For example, future European Union (EU) regulations for whole of life tracking of foods may substantially increase the adoption of tracking technologies. Australian exporters are well placed, relative to competitors in developing countries, to meet the increasing security requirements. They will also reap other benefits from the technologies such as reduced contamination of goods and increased ability to respond to emergencies.
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