Due to the rise of ecommerce, The B2C experience is driving user expectations in the B2B environment, as well. Customers in all parts of the world are now increasingly voicing demands in terms of levels of service and the flexibility of logistics services. Both individuals and businesses expect to get goods when agreed, with more control and visibility.
To stay competitive and retain market positions, logistics service providers need to address a host of new and pressing issues – rapidly growing customer demands, cost reduction requirements, and the need to being compliant with regulations and environmental legislation. Use of digital technologies has been identified as key in addressing and overcoming these challenges.
Moreover, with potential industry disruptors entering the logistics scene (from strongly funded start-up tech companies to giants like Amazon and Uber hatching completely new business models), understanding how to unleash the potential of digital technologies is not only essential to meeting greatly increasing customer expectations – it is also an imperative for future survival.
In a rapidly evolving digital economy, there are numerous benefits and opportunities of digital logistics operations. These are the key benefits:
So how do you go about making your logistics operation digital in order to meet disruptions and growing demands, enabling you to emerge as a winner in an era of unprecedented change?
Digital solutions for logistics optimisation and collaboration have proven to unleash great savings (up to 35% cost reductions and up to 50% carbon footprint). You can look for opportunities in several different areas: For instance, have you considered what the average truck fill rate is for your operation? Or how much time is spent by your resources on data entry activities? Digital solutions can help optimise and streamline many of these areas.
Most companies that subcontract logistics services now favour digitally enhanced, simple and user-friendly experiences at every stage of the customer journey. Brands like Airbnb, Uber, and Spotify are now well established in the competitive landscape, and many companies have realised that the value chain has moved from the possession of assets and production tools (i.e. costs) to the mastering of customer interface (where the money is!). Making the customer experience digital is a key issue.
Many logistics service providers right now have to externally integrate with brokers, suppliers, 3PLs, ocean carriers, air forwarders, and more. If using the cloud, all systems can talk to one another, allowing for easier transactions such as uploading orders or checking order status, booking or downloading invoices. Already, there are logistics cloud services (such as MIXMOVE) that can close a gap many LSPs are not even aware exists.
Typically, logistics service providers build their IT infrastructure using different interface formats to create data connections with different partners. As the number of partners rises, so does the complexity of connecting them all. State-of-the-art architectures simplifies the process of integrating supply chain data with multiple standards, formats and communications channels. You only have to connect once – no longer do LSPs need to build new interfaces again and again – everything is housed on a single platform. At the same time, it is possible to link your existing systems to these new platforms, thereby preserving the investments that already have been made.
This is uncharted territory for most LSPs, though it is fertile ground for supply chain efficiency.
As a logistics service provider, there’s no reason to be afraid of disruption from startups and tech companies. Instead, see them as a means to an end: enhancing and evolving your core business, while establishing ties to the innovation community.
Driven by the pressures of competition, cost-reduction and performance, digital technologies are set to transform the logistics industry – with innovative cloud services and architectures playing key roles. For many logistics companies, however, digitally optimising operations has not been a strategic priority so far. It most certainly ought to be. Making your logistics operation digital creates great opportunities for new business concepts, revenue generation, and improved efficiency. Plus, it helps you shrink your environmental impact.
In an increasingly real-time economy, companies that take a structured and disciplined approach to digital adoption will have a competitive advantage in the challenging freight transport and logistics marketplace.
Start taking our 6 steps to going digital today, and you’ll be well on your way to logistics leadership.