The digitalization of the logistics sector is upon us. Keeping up with the latest innovations in technology will allow logistics players to pick and choose which solutions are best suited to their needs which will give them a big advantage in the long run.
What is digitalization: Digitalization refers to the restructuring of an entire industry usually through a platform that enables direct interaction between several sides or more. This is often confused with digitization which refers to converting information to a digital form. Digitalization goes beyond implementing technology to changing the entire business model and the evolution of work. A fully realized example of Digitalization is the physical internet where the physical world will converge with the digital world.
The logistics industry and digitalization: The logistics industry has been slow to adopt digital technologies in general, but this is now changing. New logistics technologies with artificial intelligence, advanced analytics, and augmented intelligence are increasingly being adopted by the industry. Although these technologies are very useful, in improving efficiencies, increasing visibility, and controlling costs, they tend to focus on only certain aspects of the supply chain relevant to the company purchasing them. In order for Digitalization to take place, the technologies adopted must useful to a larger segment of the logistics industry.
How will digitalization be accomplished: Logistics Digitalization will require building an end-to-end platform that encompasses the large parts of the existing system. Current logistics technologies will need to converge allowing the different segments to scale through collaboration and consolidation. Cloud technology enables digitalization by empowering companies to leverage technologies such as SI, chatbots, the internet of things, etc to reduce IT complexity and continually find new ways to expand customer outreach. Chaine is a good example of the use of this technology as they are using cloud technology to digitalize freight shipping with automations and collaborative communications.
What will cause digitalization: The Amazon effect changed consumer behavior and now industrial customers are also expecting faster, cheaper, more flexible transparent shipments. These changing expectations have put a strain on the logistics industry’s bottom line. Access to inexpensive cloud technology has made digitalization possible. The logistics industry’s search for value propositions and willingness to adopt new technologies are advancing the digitalization process.
How will we benefit: Digitalization will Improve customer experiences (both BtoB and BtoC), improve inefficiencies, and lead to lower costs. Digitalization will allow companies to operate more efficiently, move faster, and better respond to customer’s needs. Collaboration between various parts of the supply chain will provide transparency which will, in turn, improve efficiencies and increase visibility. The reduction of inefficiencies will also improve the global economic and environmental impact of shipping.
The Future of Logistics: Digitalization will transform the logistics industry resulting in major changes in how companies operate. It will result in improved visibility, lower costs, and improved global impact. It will give rise to increased planning and collaboration between companies, and result in more satisfied customers. Technology companies will continue to push logistics towards digitalization and ultimately the physical internet. Logistics players need to review their current technology and have a plan to continue to innovate in a changing world, as those who do not innovate may be left behind.
