The logistics sector is contributing significantly to the Luxembourg economy. The country’s main assets include notably its central location in Europe, a modern logistics infrastructure, an innovative local ecosystem and the presence of major logistics service providers managing distribution centres for third parties.

Logistics 4.0

Just as digitalisation has radically changed the way we consume with a simple click of a button, Industry 4.0 will strongly influence the way logistics operations and supply chains are managed. In order for companies to successfully embrace this evolution, they need to move from linear supply chain management to a more interconnected model where information flows seamlessly between all stakeholders involved. Connectivity and interoperability of data are key.

Logistics service providers in Luxembourg have successfully adapted to the changing global environment.

“Over the past decade, logistics service providers in Luxembourg have successfully adapted to the changing global environment by continuously moving up the ladder of the value chain. They offer dedicated services for special cargo such as pharmaceuticals or online purchases, for example,” explains Daniel Liebermann, Director of the Logistics Directorate at the Ministry of the Economy. In order to strengthen its position as a prime logistics hub in Europe, Luxembourg is determined to support companies in succeeding with their digital transformation.

Towards customer-centric supply chains

With the rise of  e-commerce  and the emergence of the on-demand economy, supply chain management is becoming more complex. “Nowadays, consumers expect convenient and personalised delivery services. They are no longer the last link in the value chain, but an essential part of it,” says Mr Liebermann. The higher expectations of private clients have set new standards along the whole logistics value chain. Digital-savvy business customers now expect similar services. Another major challenge is end-to-end supply chain visibility, covering the whole process from procurement to final delivery – and, when applying the principles of the circular economy, even beyond. An increasing number of companies are looking to set up “supply chain control towers” to monitor and manage their global supply chains.

The ‘holy grail’ of supply chain management today is predictive analysis.

It is no longer enough to use real-time data obtained through the Internet of Things just to track and trace goods – it needs to be turned into useful information. “The ‘holy grail’ of supply chain management today is predictive analysis,” says Mr Liebermann.

Predictive data analytics

Big data analytics make logistical prediction possible on an unprecedented scale. While the day-to-day business can be managed with real-time monitoring, predictive data analytics allows operators to become proactive.

“With big data coupled with artificial intelligence, we can anticipate the impact of unforeseen events or external occurrences such as natural disasters. We are moving towards logistics solutions that are more agile, more responsive and increasingly connected to the needs of the end customer,”  explains Mr Liebermann. Knowledge about how to forecast demand, predict disruptive, unforeseen events and take informed decisions on how to react is thus becoming a key strategic asset for companies.

A supportive ecosystem

Luxembourg’s strategy for data-driven innovation includes a number of key initiatives targeting logistics companies. The government’s ambition is to turn Luxembourg into a next-generation logistics 4.0 hub, where established logistics service providers consistently use digital technologies and new companies find a favourable ecosystem. The sector can benefit from innovation funding schemes and cooperation with public research institutes. “We strongly encourage public-private collaboration,” confirms Mr Liebermann. “Companies that want to embark on a digital transformation will not be left on their own.”

Photo: © CFL multimodal