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5 Signs You Need to Digitize Your Logistics Operations

26.01.2022

Logistics Operations

There’s now a general consensus across the logistics industry that digitization is no longer a mere choice: It’s a premise to maintaining and driving future growth. And while 42% of organizations admit that their digitization plans were accelerated by the pandemic, many supply chain stakeholders are still sleeping on innovation.

The famous Litmus test can be of great help here: Are your customers getting exactly what they want, when they want it—and are you spending as little as possible to accomplish that? If your answer is no, it’s evident that your supply chain needs further optimization, and today, this can’t happen without digitizing your processes.

Let’s take a look at some of the specific signs showing it’s time to digitize your organization’s logistics operations.

Your Supply Chain Isn’t Resilient

Uncertainty has become a fundamental challenge for supply chain management—and one that is extremely costly. Be it delayed deliveries, port capacity issues, labor strikes, or new Covid-19 restrictions imposed overnight, if your organization finds itself struggling and unable to pivot fast, you might need to rethink your operations.

Organizations that rely on manual processes often lack the visibility and agility needed to shift sourcing, manufacturing, and distribution activities around quickly. Apart from that, manual processes can create fatal gaps within your supply chain, slowing things down until you identify the specific bottleneck. Adaptability is above everything: When McKinsey surveyed senior supply chain executives, 93% told them that they intended to make their supply chains far more flexible, agile, and resilient.

You Face Massive Logistics Costs

As logistics is a dynamic field, errors and irregularities are virtually inevitable. But they do come at a cost—and the better you can prevent them, the more you can save. Logistics leaders need to collect data and draw patterns to identify their weak points and work proactively to eliminate them. For example, if your intel always leads you to inaccurate container forecasting, there’s a chance you need to leverage digital processes to ease your pains. 

To drive growth, you need to be constantly evaluating your logistics operations and identifying possible optimization opportunities. If you find the collection and analysis of data too laborious, you might need a tech-enabled overview. The right automation tools—like Transmetrics—will make it easy to optimize your capacity utilization, cut down on labor-intensive tasks, improve staff productivity, or help set optimal shipping deadlines. 

You See Constant Conflicts in the Supply Chain

Having teams manually sift through endless databases, carry out accurate capacity estimation, and conduct network analysis can be extremely time-consuming and create a breeding ground for errors. If you’re seeing inaccuracies and conflicts in your supply chains, chances are it’s because of that.

Traditionally, logistics planners approached the state of operations manually—trying to make sense of extensive and hulking excel tables. However, not even the most brilliant mind could capture all the intricacies of today’s supply chains. It’s believed that most enterprises have only 20% visibility into their supply chains, as opposed to the 70-90% needed to address key points of volatility where revenue and costs are at risk. Highly limited visibility is, therefore, a red flag you should watch out for.

Predictive analytics is the language of today’s logistics operations, so revisiting your capability to estimate the upcoming demand and embrace proactivity might be necessary. Fleet optimization should be your number one priority to ensure you’re monitoring (and acting upon) traffic congestions, road restrictions, or environmental factors in real-time—something that is extremely hard to achieve without tech solutions at hand.

You Experience Fragmented Communication

With manual processes, you might notice that your data flow becomes siloed and rigid, hindering information exchange and a clear overview of your logistics operations—and no amount of spreadsheets would be enough to change that. Not only does it prevent you from scaling, but it also makes your team waste their time on having to search through endless email threads only to find the information they need.

Likewise, having your employees check for important updates a few times a day can either lead to hours unnecessarily spent or a vital issue falling between the cracks. Digitized communications can bring automated reports, alerts, and notifications that draw an employee’s attention to an issue exactly when needed. 

Fragmented communication is simply a common symptom of a supply chain that is ripe for digitization. Rather than having separate applications and databases, it’s useful to have one comprehensive system (”one version of the truth”) that aggregates data, offers real-time updates, and provides complete visibility into operations.

You Fail to Meet Growing Customer Demands

Today, customer demands are growing. From delivery speed to the quality of delivered goods or even customized care, you must adjust your supply chain to meet their expectations—or someone else will. Navigating this reality without a technical setup can be challenging.

Many products—from Covid-19 vaccines to vegetables—need to be transported under strict requirements, such as specific temperature and humidity parameters. However, if you have manual processes in place and can’t monitor the state of your goods in real-time, you are risking that they will get damaged, spoiled, or lost throughout the supply chain. 

Without digitization, your organization is unable to control and navigate the successful transport of goods. For example, IoT is fundamental for monitoring transport conditions. Without it, your freezers might be blasting unnecessarily and you can’t do anything to change it—so apart from unnecessarily high energy consumption, your products can get damaged. Be it IoT or digital twins, blockchain, advanced analytics, and other innovations, today’s supply chains can’t go without modern technologies.

Logistics is constantly evolving, and digitization plays a critical role in this. Are you doing everything you can to stay ahead of the curve? Read our blog to learn more about the latest trends and developments in the industry.

Acknowledgment

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The Transmetrics project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 945610.