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The Era of Digital Technologies in Logistics

Thursday August 12, 2021

It is no secret that digital technologies in logistics are becoming an important area for most companies within the industry. And even though this transformation is widespread across the industry, there are still those who struggle to implement new technologies in their internal processes. This comes as no surprise since the transportation industry has decades of history behind it. Its major companies have traditional methods that work and draw great results without necessarily incorporating technology into the mix.   

In fact, in a study conducted by Capgemini Consulting and GT Nexus in 2020, they found that “48 percent of respondents admit that right now traditional methods such as phone, fax, and email are still the dominant ways to interact with supply chain partners.”  

Although this may be true in some cases, nowadays, implementing digital technologies in logistics is not an option and has become more of a requirement. Most companies have already started their digital transformation, so partnering with those who have not becomes a significant setback.  

As a matter of fact, according to a Forber Insights survey, “65% of logistics managers are aware that they need to overhaul their business model if they want to survive the digital age.”  

But before we continue discussing the importance of the digitalization of the supply chain, it’s crucial to understand what it actually means.   

What does digital supply chain transformation refer to? 

It’s relatively simple. The concept of digital supply chain transformation refers to implementing new technologies or software to every process in a company regarding the supply chain. The entire focus of this transformation is efficiency, making everything more accessible, quicker, and in the long run, cost-effective.   

Some of the processes that are positively impacted by the digitalization of the supply chain are:  

  • Load Storage 
  • Load and order Preparation  
  • Documentation  
  • Transporation  

As mentioned, digital technologies in logistics are aimed to automate and manage many processes, procedures, and workflows within a company to obtain efficiencies and increase overall productivity. But this digitalization process is a consequence of the fourth industrial revolution known as Industry 4.0.   

What is Industry 4.0? 

Industry 4.0 is the concept used to refer to the fourth industrial revolution, which is characterized by the implementation of intelligent and autonomous software and systems that function thanks to data and machine learning. Some of the most significant components of Industry 4.0 are hyperconnectivity and the incorporation of new technologies within workflows.   

These new workflows and the implementation of digital technologies in logistics have led to the concept of Logistics 4.0, which is based on interconnection, cloud-based applications, and the digitalization of information.   

How are Digital Technologies in Logistics changing the industry? 

Considering that Industry 4.0 and Logistics 4.0 are now a reality on many processes within the entire supply chain, logistics companies must look inwards and find out where they can implement technology to make their operations more efficient and stay ahead of the game. Understanding that the digitalization era is here to stay will allow companies to invest in technology and create strategies aligned to this purpose.   

The logistics industry is drastically changing with the adoption of new technologies, becoming leaner and more efficient.   

Here are three significant ways digital technologies are shaping the industry: 

     1. Strategic workforce  

Adding technology to company processes allows your business to become more efficient. Tasks that were usually taken care of by one employee during an entire day can now be taken care of by a programmed robot in a matter of minutes and without errors. This allows you to re-organize your workforce and use their other talents on more strategic parts of your business instead of taking care of repetitive tasks.   

     2. Reduced of inefficiencies 

Programming software to take care of many of your tasks helps your business reduce errors and create more streamlined processes. Companies need to understand where their inefficiencies lie and develop digital strategies tailored to those specific improvement areas. With these areas in mind, creating software or outsourcing companies to create software that targets those specific needs will prevent process inefficiencies.   

     3. Data as the driving force behind efficiency 

Not only is storing data essential, but it’s crucial for any technology implementation strategy since the software is all based on the information you can recollect. But it’s also critical to know how to manage that information and leverage it to create software and systems that work according to your company’s needs.  

  

Considering how digital technologies in logistics shape the industry, companies need to stay ahead of the game and incorporate new software to make all their processes more efficient. Many benefits come when welcoming tech to your processes, and two of the most significant ones are efficiency and reduced inefficiencies.   

Even though traditional methods have been used for many years, there’s always space for improvement. The good thing about these tech advancements is that they’re scalable; companies can decide to implement software or do a complete overhaul of their processes. But the most critical areas to consider are those where you know there can be significant improvements, and there’s where you’ll benefit from the digitalization process.    

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