Impact of Digital Transformation on the Logistics industry

Digital Transformation helps in overcoming the tip of the iceberg which seems to bug the logistics industry.

A company has employed Mr. X, who is in charge of truck deliveries to the customers. He travels 300 km to deliver a product and delivers many others on the way. Once the last order is delivered, he comes back empty, which becomes a burden on both the company and the environment. This is only one of the basic challenges faced by the logistics industry. The demand for physical delivery of products, typically known as “the last mile” and many other challenges like difficulty in data collection have contributed to the slower adaptation of digitization in the logistics industry.

Ways in which Mr.X can be helped by the organization with Digital Transformation.

1. Track and Trace

How the industry is trying to help Mr. X is by increasing transparency in the whole process. The company decided to track the delivery of the assets around their own manufacturing facility and over a period of time, identified a pattern and customer preferences. This led to identifying potential breakdowns in the supply chain beforehand and avoid such mishaps. This not only helped the truck driver but also increased transparency among customers, who were able to see what happens to their products in real-time. This reduced cost, increased transparency, eventually providing better service than before.

2. Blockchain

A customer places the entire trust in the company to deliver its product. How does this transparency increase to build more trust? While every other industry is almost there, logistics is just beginning. However, it’s never too late. The blockchain technology has increased transparency and also has made digital payment safer. Read a quick brief onBlockchain technology in governance.

3. Automation

To manage warehouses, the company started using automated forklifts and the systematic working helped resolve internal confusion. Soon, conveyer belts became the norm. To extend this, the company also experimented with autonomous trucks, which ran bumper to bumper, resulting in reduced costs and usage of lesser fuels while accelerating the process. This does not sound great for Mr. X but he was appointed as the in charge of all truck movements and he played a modified role in the company. Such investments on automation enhanced the overall experience for both the customers and the organization.

4. Innovation

Meanwhile, the problem of empty trucks still bugged them. They created a platform to collect data of trucks going in the direction of their requirements and allotted some of their products to be delivered on the way. Though this was risky in the beginning, there were some drivers who gained their trust in the process. Tracking them was easy as the necessary technology like GPS is already in massive use. The organization was also able to return the favor in some other routes, making sure their trucks weren’t empty throughout. This required modification of roles for some employees internally, but that did not affect the system in any way.

The Update Obstacle

The basic challenge is to follow all these on a regular basis. The experiment proved well but implementing this as a system requires more investment in all areas and updating of customer interface now and then. The data collected does not hold good for long time periods. This organization is an individual player working on a change. This will prove more beneficial if the entire industry moves at the same pace in this direction.

Of late, bigger organizations themselves have started completing “the last mile” as they come up with solutions themselves. Amazon drone delivery is a prime example of this. This does not mean the end of the road for third party logistics as their expertise and facilities cannot be matched immediately by organizations.

However, the world industries are looking at logistics with keen eyes for their overdue digital transformation. Innovation and faster process changes seem to be the way forward. It is important for the entire industry to work together and create a revolution to keep up with everyone else as they make up for the final step in several of them.