Modeling a Logistics Hub Using the Digital Footprint Method—The Implication for Open Innovation Engineering

Abstract

Optimizing the cargo flows through the nodes of a digital transport corridor is a crucial problem; solving it allows to introduce modern management methods in logistics. This study examines the optimization of the technology of a distribution center as the base node of a third-party logistics network operator. Our objective consisted in theoretically substantiating the application of mathematical formalisms to describing the passage of stochastic goods flows of a complex structure through a node of a logistics network. To solve the problem, we constructed a mathematical model intended as a decision-making block in the Warehouse Management System software. This paper presents the results of calculations carried out using a computer according to the proposed algorithm. Preliminary results allow to conclude that there is a significant resource for reducing construction and maintenance costs of the distribution center. Quantitatively, the savings will range from 10% to 40%, depending on the terms of delivery of goods and the degree of market uncertainty. An example of a practical calculation using the developed mathematical model is given. The calculations were performed for Huawei, a key global provider of ICT infrastructure and smart terminals. The algorithms were designed to account for uncertainty, which allows to use the results for risk management applications. In practice, this theoretical concept can serve as a basis for digital logistics platforms, increasing the speed of delivery of goods and cargo and the profitability of logistics as a result. The solution to this problem will allow to consider the nodes of logistics networks as smart independent divisions with an information interface for interaction built into a digital logistics platform. The role of these nodes is to make the best decisions in handling cargo flows. As the next stage of research, we plan to develop algorithms for coordinating the information flows reflecting transport activities and forming the material flows entering and leaving the distribution centers.

Smart supply chain and firm performance: the role of digital technologies

“…In order to leverage the power of digital transformation, organizations must develop adaptability and embrace novel technologies in business processes (Frank et al, 2019;Pramanik et al, 2019). This transformation in digital processes has improved the ability to conduct business meetings virtually, thereby minimizing the expense of business travel and in-person meetings (Shmatko et al, 2021). It also plays a vital role in improving customer service by collecting great amounts of data from various sources and developing a powerful network among different collaborators.…”

“…Similarly, the supply chain business process is digitally transformed by three technologies, including block chain, machine learning and robotic process automation (Hartley and Sawaya, 2019). In the context of the digital supply chain, Shmatko et al (2021) explained that the optimization of cargo flows by nodes of digital transport corridor is a critical problem. The solution to this problem is the implication of modern management methods in logistics.…”

Digital Echelons and Interfaces within Value Chains: End-to-End Marketing and Logistics Integration

“…Authors attempt to theoretically substantiate the possibility of using the digital data flow for predictive analytics, which in turn requires a developed mathematical model. Since it is precisely the opportunity to formalize the transition processes at the stages of creation of a consumer value chain, it provides a basis for digitalization [4][5][6][7]. The formulated concept of echelons allows one to clearly divide the entire business process into stages between echelons and, at the same time, take into account the influence of the time factor, which is important for assessing the economic performance of a business.…”

“…According to principal M. Porter's idea, the researcher could select five primary activities: "Inbound Logistics", "Operations", "Outbound Logistics", "Marketing and Sales" (informing buyers with facilitating their purchase) as well as "Service". The authors developing M. Porter's approach rely on the concept being applied to the conversion of the sales funnel and digital logistics [4][5][6][7]. The researchers consider that a full promotion cycle of any product includes various stages of the consumer value chain.…”

Sustainability of Management Decisions in a Digital Logistics Network

“…From the obtained relation (17) at M → ∞ , let us pass to the limit with respect to the sequence { u M (x, t)} and obtain identity (6), which means that u(x, t) (the function u(x, t) ∈ W 1,0 0 (a, Γ T )) is a weak solution (state) of system ( 4) and (5). By virtue of the uniqueness of the solution u(x, t) to problem (4) and ( 5) on the basic fundamentals and estimate (16), the sequence {u M (x, t)} converges weakly to u(x, t).…”