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The Logistics Sector is Experiencing Digital Transformation

The logistics industry is thriving as more people shop online. Nearly 60 million parcels per day were produced in the United States. The industry is experiencing high demand but it is moving towards a chasm. Leaders in the space need to decide what and how to digitize to stay relevant and competitive.

Digital transformation is a hot topic in the logistics sector. This space is awash with business leaders looking to modernize and adopt new technology like inventory management.

We’ll be discussing how to transform your logistics company digitally by following some of the most popular trends.

The Role Of ERP Software In The Logistics Industry

The retail market has long relied on digital technologies. This industry isn’t afraid to abandon traditional models, from shopping carts that offer to buy suggestions to VR-embedded smart glasses to shopping carts that provide purchasing recommendations.

The industry has taken longer to adapt. Many shipping and packaging companies continue to operate as they did ten years ago.

For smaller businesses, this resistance to change can be detrimental. By establishing global platforms, early adopters have an advantage over them.

These are the top trends early adopters follow

1. Optimizing Logistics Services

Major retailers now offer fast turnaround services such as same-day or next-day shipping. Companies have had to reinvent their service models in response. To gain visibility into all aspects of their operations, they are implementing digital platforms. These systems allow them to move more quickly and efficiently even in large cities.

2. Fully connected supply chains

These digital tools allow logistics companies to have full transparency, visibility, connectivity, and accountability.

  • Advanced data analytics
  • Software for Enterprise
  • Drones and robotics
  • Augmented reality (AR).
  • Blockchain
  • The Internet of Things (IoT).

These tools speed up operations and allow companies to be more responsive to customer needs and demands.

ERP software is designed for this purpose. The software allows companies to use the sales data of associated retailers in a more useful way. Leaders can gain insight into the history of orders and communications to improve their ability to:

  • Optimize demand forecasting
  • As needed, increase the capacity
  • Planning for streamlining operations
  • Reduce excess inventory

3. Improved Data Management

Real-time buyer behavior is a driving force in logistics. Without the right software, it can be difficult to track and analyze these actions.

Companies can harness and capture these insights with digital solutions such as analytics as a Service. They can then use the data for:

  • Ensure more efficiency in your operations
  • Lower operating costs
  • Customers’ preferences and needs are met faster

4. Delivery Optimization

Some areas are difficult for delivery trucks to access. They also have deadlines they cannot realistically meet.

Delivery trucks have expanded their reach thanks to technological advances such as drone delivery and digital trucks.

3D printing is a promising technology for processing. These tools enable logistics companies to adopt on-demand production strategies for other parts of their supply chain use.

These capabilities together make delivery easier, quicker, and more widely accessible.

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5. Product Sustainability

Nearly all industries have adopted environmental, social, and governance (ESG) initiatives. Logistics is not an exception. Buyers are interested in learning what companies do to create sustainable, eco-friendly products and processes.

These digital platforms, such as those offered by top ERP vendors, help companies automate and eliminate manual tasks. This reduces waste and pollution, while also reducing companies’ carbon footprint.

6. Collaboration and Unified Support

The teams collaborate closely with other departments within an organization. This includes the transportation and warehouse teams. These employees must be able to communicate and collaborate in just seconds.

Enterprise systems like supply chain management systems open up these lines of communication. The centralized dashboard allows everyone to work together, which helps with version control and decreases the risk of human error.

Potential barriers to digital transformation in the logistics industry

Why isn’t every business clamoring for a digital transformation with so much at stake?

There are always risks. Digital systems are beneficial but can be difficult to implement. The following are some of the biggest issues that prevent widespread adoption of digital technology:

  • Find the right talent
  • Assisting with business changes (e.g. acquisitions and mergers).
  • Communication with suppliers and stakeholders who aren’t tech-savvy
  • Workarounds for regulatory restrictions
  • Silos and departments that hinder collaboration

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Balance Digitization and Demand for Logistics

Due to the rapid rise of eCommerce in recent years, logistics companies have become highly sought-after suppliers.

Logistics businesses need to be open to following other parts of the supply chains in order for this status to continue. This includes using digital tools when appropriate.

Digital transformation can bring new revenue opportunities and connections to the industry by embracing it. Are you ready to make that change? For a free consultation, contact our ERP consulting company.