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What does digital logistics mean?

Jan Tore Pedersen | 07. May 2018
4 minutes read

As supply chains are becoming more and more global and responsive, seamless cooperation between actors in integrated supply chains becomes increasingly important. To achieve this, the systems used for managing transport and logistics operation need to interact efficiently and share information. Besides, stakeholders must be enabled to share information according to their own business rules.

 

More than ever, long-term success – even survival – of established logistics companies depends on having the most cost-effective, transparent and flexible business processes, as well as excellent customer service. Rapidly growing e-commerce and consumer demands, as well as the pressure of new competitors entering the market, necessitate a paper-to-digital shift.

Simply stated, established logistics companies need to get away from paper-based information exchange.

This is digital logistics in a nutshell. All information is electronic, and it is smoothly shared (communicated) between all stakeholders in the supply chain.

 

Removing barriers to going digital

Business networkThe B2B logistics sector as a whole wants to go digital. But the process of connecting stakeholders and facilitating interoperability between different systems and standards has been challenging – and costly.

However, as several joint initiatives have been taken to develop one Common Framework for exchange of information between ICT systems, the goal of becoming paper-free is now attainable not just for the bigger players.

The Common Framework approach reduces the profit pressures facing logistics and transport companies that want to electronically connect to the same infrastructure. Those who already have invested heavily in this area are not forced to stop using what they have.

Moreover, emerging digital technologies and cloud solutions enabling next-level supply chain collaboration and optimization are ushering in a new era of digital logistics.

The best part? These solutions neither break your budget nor disrupt your existing systems. You pay as you go.

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Breaking down operational silos

With the emerging of digital logistics, the entire path of a parcel is chartered digitally. When I receive a parcel at my house, I now typically have to sign for it on an electronic device (handheld terminal or mobile phone) and not on paper. The signature is immediately communicated to the ICT system of the logistics service provider (LSP). The signature marks Proof of Delivery, which the LSP now may communicate back to the shipper.

When all such information is being exchanged between logistics service providers, we have established a digital logistics operation. Many parcel carriers, like DHL Express, UPS, and FedEx have established such digital logistics networks. The problem with these, however, is that they are closed within each organisation.

Operational silos need to be broken down, and this is exactly what cross-industry initiatives toward digital logistics and supply chain integration do.

 

Conclusion

The only constant is change, and this is especially true for the logistics industry. Today, next-generation logistics management solutions are available to logistics companies, empowering them to draw actionable insights from a plethora of outbound and inbound data, in real time. This contributes to a culture of data-based decision-making that unlocks significant value.

Making logistics digital creates customer-focused logistics that build long-term competitive advantage and business growth. What’s more, it delivers greater reliability. The old way of doing things is causing clients extra time, hassle and cost. And it is losing you money.

So the questions is: Can you afford not to get away from paper?

 

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