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How Digitalization is Making the Logistics Industry more Efficient?

How Digitalization is Making the Logistics Industry more Efficient?

by Rachelle — 7 months ago in Supply Chain Management 8 min. read
1642

The logistics industry is undergoing an amazing revolution, driven by advances and modernization in IT and digitization. The Indian logistics sector is regarded as the backbone of a healthy economy, despite this, it is highly unorganized and fragmented with the organized companies accounting for almost 10% of the total economy. With the increased customer base of industries including retail, telecom, automobile, manufacturing, pharmaceuticals and many others, the logistics sector has been increasingly drawing investments in the past decade.

The term “Digitalization” means using the technology to create and explore new opportunities, improving a business structure by moving it to a digital industry. Now, let’s understand how digitalization is applied to logistics?

With Artificial Intelligence, advanced IoT (Internet of Things), and important data innovations, logistics sector has almost reformed. But, it’s apparent that the industry still needs digital transformations. With the launch of self-driving tech and Vehicle-to-Vehicle improvements, the logistics sector needs to assess these opportunities and become accustomed to them.

Have a look at the below mentioned some examples to see how the digitalization has helped the logistics companies to improve their services-

  • To solve the issue of a shortage of trucks, an automated truck platooning system has been proved a great step. This innovation has enabled the logistics businesses to provide their clients with live tracking, current positions and timely data on truck’s route.
  • In the upcoming years, the self-driving industry will use advanced Vehicle-to-Vehicle systems so that the vehicle can communicate with each other with no broker interference. Furthermore, this will enable transporters to connect with the online services or close by institutions and communicate online to move this data to a controller app.
  • The formation of marketplaces for consumer-provider organizations both in B2B and B2C fields is another example of logistics digitalization development.
  • With the help of sensors, drivers can have a better and faster idea of the local reality. It will also help them to respond with the planning and better control level. All this is possible by making digitalization an integral part of the logistics solution. This also results in greater transparency and flexibility in the completion process.
  • The new information can be created with the help of an organized integration of earlier fragmented data. This improves front-to-end risk management, for instance, the prediction of bad weather, strikes, traffic congestion, etc. Additionally, logistics also acts as a data supplier by recording real local data. This significantly enhances delivery reliability.

Digitalization is now playing a key role in logistics for businesses that are trying to set themselves apart from their rivals. It not only forms the way for advanced, customer-focused and effective solutions but is also helpful for the transparent and reliable execution of these solutions. In future value-added networks, the digital processes for the interconnection and association of all parties will become important and ultimately contribute to the success of logistics activities.

When we are discussing the impact of digitalization in the logistics industry, we need to understand that what makes up successful digitalization and what are the critical points in creating a successful and effective digitalization strategy?

We have explained a few most important factors which will be helpful to do so-

  1. To satisfy customer expectations

As we all know that logistics has numerous applications, but the most important is the product delivery. Now, with online shopping stores, users expect that they should have a digital experience similar to a physical one, if not better. The most important competitive factor is the time and speed involved in the product delivery – the faster you deliver the product, the better will be your customer base.

Several global examples of the most popular and professional online delivery service providers are Amazon, Walmart, Apple, CVs, etc, that keep up with the ever-evolving demands of customers.

Therefore, logistics companies need to innovate their supply chain services and logistics operations to cope up with dynamically changing consumer mindset and to stay ahead in tough competition. The Internet of Things and Artificial Intelligence are the best ways to monitor and track these processes with big data.


  1. Improving present multi-carrier transport solutions

When you are working with different logistics providers to manage parcel shipments, it is difficult to track each parcel without an assistant and here, a multicarrier software comes in place.

Key functionality

  • Shippers frequently change the label standards and only advanced and smart machine-learning systems can completely keep up with these regularly changing standards.
  • Transportation visibility improves as real-time tracking is done for all the label products. This data is further can be shared among collaborators, consumers and the company’s employees.
  • To ensure that the transporter is not overpriced, this software controls the compliance to previously consulted tariffs and procedures expenses.

Such software creates the labels that provide important insights-

Transportation data

  • For each shipment, it will provide a unique ID code.
  • A delivery message with the shipper’s comments.
  • Shipper’s and receipt’s data and both the addresses.
  • When one order is delivered in different parcels, it will provide a sequence-number identification.

For transporters

  • For all shippers, tracking and managing codes.
  • An ID code for each client.

Package and parcel Details

  • Stamp for each time when the material of the package is checked and labeled.
  • Unique tracking code for each package.
  • Optional remarks for each package.

Communication with main shippers

The software helps to make direct communication with all of the transporters both offline and online.

  1. Redefining cooperation

Collaborative logistics means that rivals are teaming up together to improve their services for a common client. They use the same truckloads and create combined return loads, helping each other with data and exchanging innovation.

The key benefit to consider redefining alliances in logistics is the cost-efficiency. Collaborative logistics can save a minimum of 15-20% for each order. Sysco, a food company in the US is the best example that recently accompanied joint operations with U.S. Foods. Synco’s reported that the company stated that the collective practices resulted in savings of over $600 million.

Some other benefits of collaborative logistics include-

  • Collaborative logistics help to create long-term relationships with customers. In an ever-changing business world, creating strong and long-lasting relationships with clients is a difficult task for third-party logistics service providers. There can be multiple difficulties, delays, the excess or orders – one logistics company often cannot get through all the problems. In alliance, the workload and pressure are evenly distributed.
  • Collaboration allows logistics companies to exchange technological expertise. For smaller logistics companies and retail businesses to maintain Amazon-level innovation, it is important to use other company’s expertise and experience, in exchange for helping them with their business insights.
  • Collaborative logistics increases the possibilities of delivery, delay, and kitting builds the space for smaller logistics companies for expansion in new markets.The logistics industry is undergoing an amazing revolution, driven by advances and modernization in IT and digitization. The Indian logistics sector is regarded as the backbone of a healthy economy, despite this, it is highly unorganized and fragmented with the organized companies accounting for almost 10% of the total economy. With the increased customer base of industries including retail, telecom, automobile, manufacturing, pharmaceuticals and many others, the logistics sector has been increasingly drawing investments in the past decade.The term “Digitalization” means using the technology to create and explore new opportunities, improving a business structure by moving it to a digital industry. Now, let’s understand how digitalization is applied to logistics?With Artificial Intelligence, advanced IoT (Internet of Things), and important data innovations, logistics sector has almost reformed. But, it’s apparent that the industry still needs digital transformations. With the launch of self-driving tech and Vehicle-to-Vehicle improvements, the logistics sector needs to assess these opportunities and become accustomed to them.Have a look at the below mentioned some examples to see how the digitalization has helped the logistics companies to improve their services-
    • To solve the issue of a shortage of trucks, an automated truck platooning system has been proved a great step. This innovation has enabled the logistics businesses to provide their clients with live tracking, current positions and timely data on truck’s route.
    • In the upcoming years, the self-driving industry will use advanced Vehicle-to-Vehicle systems so that the vehicle can communicate with each other with no broker interference. Furthermore, this will enable transporters to connect with the online services or close by institutions and communicate online to move this data to a controller app.
    • The formation of marketplaces for consumer-provider organizations both in B2B and B2C fields is another example of logistics digitalization development.
    • With the help of sensors, drivers can have a better and faster idea of the local reality. It will also help them to respond with the planning and better control level. All this is possible by making digitalization an integral part of the logistics solution. This also results in greater transparency and flexibility in the completion process.
    • The new information can be created with the help of an organized integration of earlier fragmented data. This improves front-to-end risk management, for instance, the prediction of bad weather, strikes, traffic congestion, etc. Additionally, logistics also acts as a data supplier by recording real local data. This significantly enhances delivery reliability.

    Digitalization is now playing a key role in logistics for businesses that are trying to set themselves apart from their rivals. It not only forms the way for advanced, customer-focused and effective solutions but is also helpful for the transparent and reliable execution of these solutions. In future value-added networks, the digital processes for the interconnection and association of all parties will become important and ultimately contribute to the success of logistics activities.

    When we are discussing the impact of digitalization in the logistics industry, we need to understand that what makes up successful digitalization and what are the critical points in creating a successful and effective digitalization strategy? We have explained a few most important factors which will be helpful to do so-

    1. To satisfy customer expectations

    As we all know that logistics has numerous applications, but the most important is the product delivery. Now, with online shopping stores, users expect that they should have a digital experience similar to a physical one, if not better. The most important competitive factor is the time and speed involved in the product delivery – the faster you deliver the product, the better will be your customer base.

    Several global examples of the most popular and professional online delivery service providers are Amazon, Walmart, Apple, CVs, etc, that keep up with the ever-evolving demands of customers.

    Therefore, logistics companies need to innovate their supply chain services and logistics operations to cope up with dynamically changing consumer mindset and to stay ahead in tough competition. The Internet of Things and Artificial Intelligence are the best ways to monitor and track these processes with big data.
    Also read: Hybrid Environments with Driverless Transport Systems

    1. Improving present multi-carrier transport solutions

    When you are working with different logistics providers to manage parcel shipments, it is difficult to track each parcel without an assistant and here, a multicarrier software comes in place.

    Key functionality

    • Shippers frequently change the label standards and only advanced and smart machine-learning systems can completely keep up with these regularly changing standards.
    • Transportation visibility improves as real-time tracking is done for all the label products. This data is further can be shared among collaborators, consumers and the company’s employees.
    • To ensure that the transporter is not overpriced, this software controls the compliance to previously consulted tariffs and procedures expenses.

    Such software creates the labels that provide important insights-

    Transportation data

    • For each shipment, it will provide a unique ID code.
    • A delivery message with the shipper’s comments.
    • Shipper’s and receipt’s data and both the addresses.
    • When one order is delivered in different parcels, it will provide a sequence-number identification.

    For transporters

    • For all shippers, tracking and managing codes.
    • An ID code for each client.

    Package and parcel Details

    • Stamp for each time when the material of the package is checked and labeled.
    • Unique tracking code for each package.
    • Optional remarks for each package.

    Communication with main shippers

    The software helps to make direct communication with all of the transporters both offline and online.

    1. Redefining cooperation

    Collaborative logistics means that rivals are teaming up together to improve their services for a common client. They use the same truckloads and create combined return loads, helping each other with data and exchanging innovation.

    The key benefit to consider redefining alliances in logistics is the cost-efficiency. Collaborative logistics can save a minimum of 15-20% for each order. Sysco, a food company in the US is the best example that recently accompanied joint operations with U.S. Foods. Synco’s reported that the company stated that the collective practices resulted in savings of over $600 million.

    Some other benefits of collaborative logistics include-

    • Collaborative logistics help to create long-term relationships with customers. In an ever-changing business world, creating strong and long-lasting relationships with clients is a difficult task for third-party logistics service providers. There can be multiple difficulties, delays, the excess or orders – one logistics company often cannot get through all the problems. In alliance, the workload and pressure are evenly distributed.
    • Collaboration allows logistics companies to exchange technological expertise. For smaller logistics companies and retail businesses to maintain Amazon-level innovation, it is important to use other company’s expertise and experience, in exchange for helping them with their business insights.
    • Collaborative logistics increases the possibilities of delivery, delay, and kitting builds the space for smaller logistics companies for expansion in new markets.
Rachelle

Rachelle, the author of this post is an experienced writer and analyst. He is working in the transport and logistics industry for many years and therefore familiar with the latest trends and technologies used in this sector. Writing is his passion and he writes informative blogs after the complete research and analysis.

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