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5 steps towards digital logistics

Artur Alves | 17. Jun 2020
5 minutes read

At a conference in 2017, DHL CEO Ken Allen held a presentation called «Disrupt or be disrupted», a statement that is even more relevant today. A key part of his message was that those who are not adapting to the use of digital logistics will be disrupted. 

Start-ups and heavy hitters that understand how to make the most of opportunities are not only gaining a competitive advantage in the future of logistics, they are threatening to sweep away LSPs that are dragging their heels into the digital age. One way to survive and succeed in the hypercompetitive market is to engage in cooperative logistics networks, employing digital technologies.

For many logistics companies, though, the implementation of digital technologies and models can seem like a long and tiresome process. Internal factors such as employee or management pushback, budgetary constraints and lack of an overall digitisation strategy are some of the issues facing companies of all sizes. Replacing existing systems or investing in expensive integrations upfront is perceived as a major hurdle by many logistics service providers.

 

Going digital without breaking your budget

Going digital is a journey, not a light switch. You don't have to convert to digital logistics in one big implementation step. And you don’t have to pay a lot upfront. A gradual and systematic process to go digital is less expensive, less risky and hassle-free. Here are 5 steps for doing digital logistics in a sustainable manner, without having to exceed your budget.

 

1. Identify your strategic business goals before going digital

Knowing what your strategic goals are will allow you to decide on your future key strategy, thus enabling you to make the best technology investment. Your goals describe what your company expects to accomplish over a specific period of time, giving your business direction and helping measure results. Goals can be reducing costs, increasing market shares and revenue, improving customer service, and so on.

It is important to get the strategic context right for your digital investments.

strategic business goals

2. Favour solutions that can be integrated into existing systems

Every executive knows it: Disrupting or replacing existing systems can be an expensive hassle.  But you don’t need to get rid of what you already have in order to do digital logistics. Instead, build on it. Go for solutions that can be implemented without disrupting any of your existing systems, allowing you to retain as much as possible of your previous investments.

 

3. Consider SaaS solutions

Cloud technology is leading the revolution in how supply chain services are provided. Unlike traditional software solutions, which usually require considerable initial investments, Software as a Service solutions allow you to “pay as you use”. This eliminates the upfront cost of purchase/installation, as well as ongoing costs like maintenance and upgrades. Implementing SaaS is affordable, easy … and practically risk free.

Besides, the pay-as-you-go-model allows SaaS solutions to be treated as an operating expenditure rather than an investment, which is one of the reasons why they are favoured by small and medium-sized companies.

 

4. Look for solutions that connect you to a logistics network

In the business of logistics, developing digital integrations with all the companies you are working with can be extremely expensive. But solutions already exist that offer the capability to tap in and immediately connect to an extensive network. This will bring huge cost savings in the future.

 

5. Look for partners that can help you develop your digital logistics processes

The right partner can help you improve your business substantially, without going over budget. Having an agile technology partner onboard gives you instant access to highly-skilled expertise. What’s more, you get a trusted advisor that brings both operational and strategic insights to the table. Look for companies that can understand exactly what you need and then tailor solutions accordingly. It will pay off.

 

Conclusion

No matter where you stand right now, preparing for the impact of digital logistics is not an option. It’s a must. For established logistics companies, it’s high time to respond, not just to react. Right now, you have a time window to decide on a new and digital path forward, ripe with opportunities.

Adopting new concepts and technologies, such as big data, telematics and cloud-based solutions, brings significant gains. Digital logistics doesn’t have to be painful or costly.

 

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