The recent pandemic has impacted every part of the global supply chain, from the sourcing of raw materials to getting products into the hands of consumers. Businesses continue to struggle with a variety of supply chain disruptions, prompting many to invest in innovation initiatives to improve visibility and efficiency.
Of course, forward progress is likely going to involve different forms of technology. Fortunately, technology can have a positive impact on labor, transportation, and other supply chain challenges. Here is how the digitization of the global logistics market is progressing in the ways it is adding value to the supply chain.
Challenges Facing Logistics Companies
A lot has changed in the logistics space over the past three years. Supply chains are considered vital to business survival and growth. But as the effects of the pandemic wane, the logistical challenges continue to plague industry players. Experts predict continued short-term disruptions centered around labor shortages, shipping shortfalls, and supply and demand imbalances.
The lack of resiliency and visibility in the supply chain has resulted in numerous delays and errors, which impacts the customer experience and company financial results. It’s become clear that companies need to optimize supply chain management and logistics quickly. For many, the answer has come in the form of digitization.
What is the Digitization of Global Logistics?
Digitization is the process of innovation in the logistics industry, where key players address ongoing challenges using various technology solutions. Digitization strategies are focused on enhancing the productivity, accuracy, efficiency, visibility, and safety of the logistics process.
According to the latest Annual Descartes’ Forwarder and Broker Benchmark Study, 77% of logistics respondents cited investments in technology as their top strategy to address ongoing challenges and accelerate digital transformation.
How the Digitation of Global Logistics is Being Applied
If you are in the logistics industry or your business relies on it, you’ll find that digitization has become increasingly common. Here are some of the ways it is being implemented and its benefits.
Sales and Sourcing
The sales and sourcing functions of the supply chain and logistics functions can certainly benefit by leveraging technology. Of course, sales have been working on innovating processes for years by using data to deliver a more personalized experience. Organizations can use this same data to better understand the flow of products so they can source materials and get the best services and prices for their clients.
Communication and Collaboration
Logistics is a multi-party process, meaning goods don’t get from Point A to Point B without passing through several hands. Unfortunately, those parties failed to collaborate much in the past. This is starting to change thanks to new processes and digitization, which allows parties to stay connected throughout the order fulfillment process. So, a customer placing an order can get a real-time view of its progress as it moves between different fulfillment partners.
Many back-office functions in logistics have traditionally required manual processes like sending an email or picking up the phone to obtain quotes or place orders. This is time-consuming and opens the process up to human errors. By digitizing the customer experience, customers can get their quotes and place orders automatically, which streamlines the process and frees up employees to perform more high-value tasks.
Resource Allocation and Management
Over the past several years, businesses have struggled to keep up with rapidly changing prices and a fluctuating supply of resources. Those trying to keep track of these things using paper or spreadsheets are fighting a losing battle. Digitizing these processes not only captures this information in real-time but ensures that businesses are in a position to take advantage of the latest opportunities for the best pricing or materials sourcing.
Customer and Vendor Screening
When you’re in the logistics business, you want to manage your risk as much as possible. Part of this involves screening your customers and vendors to prevent quality issues and potential financial losses. Through digitization, a business can quickly get the information it needs to choose high-quality partners before making short or long-term commitments.
Regulation and Security
Because logistics is global for many organizations, it involves compliance with various regulations and security checkpoints. This can lead to costly delays and errors when partners don’t have accurate and up-to-date information. But digitization allows for precise data collection that can better facilitate the movement of goods throughout the shipment process. Using connected systems, business partners can comply with various regulations and remain informed about the status of items moving through the system.
Shipping and Warehousing
One of the biggest challenges in logistics is inefficient processes. Digitization removes some low-value tasks in shipping and logistics and improves productivity. For example, many businesses are now using RFID tags from materials sourcing through order fulfillment. These tags are read using automated scanners that return information like product numbers, size, weight, product date, location, and more. In the warehouse, workers are using voice technology solutions to reduce time picking and packing and improve overall efficiency and safety.
Advanced Analysis and Reporting
Artificial intelligence (AI), machine learning, and the Internet of Things (IoT) are giving logistics companies better insights into their operations, those of their partners, and the needs of their customers. All of these technologies produce a ton of data, which can be viewed in real-time or analyzed to make more informed business decisions. This helps businesses become more productive and able to focus on fulfilling customer needs.
The COVID-19 pandemic revealed many weaknesses in the global supply chain. But it also gave businesses incentives to step up investment in innovation. Through the digitization of the global logistics process, supply chain partners are experiencing greater efficiency, more visibility, and better overall results.