Digital transformation in logistics is rapidly evolving the industry, ushering businesses toward a new era of innovation and efficiency.
Updated 8 February 2024
VP – Pre Sales at Appventurez
The logistics industry has experienced a massive shift in the last few years. With the ever-rising implementation of digital technologies in logistics, businesses have significantly improved their operational efficiency and revenue scales.
Around 67% of logistics companies have some kind of digital transformation strategy in place to digitize their processes. Besides, many collaborate with a proficient logistics app development company to streamline their services and gain a competitive edge.
But what leads to this wide-scale adoption of digital transformation in logistics?
Well, 76% of people believe that any logistics and transportation company not capitalizing on digital capabilities will seriously endanger their business. It would be interesting to explore how digital logistics can be a game-changer for your business in such a landscape.
Digital logistics is the process of integrating advanced technologies and digital transformation techniques to automate various aspects of logistics. Businesses can easily digitize and automate most of the logistical activities that are usually performed manually.
Several technological solutions are leveraged by businesses to harness the full power of supply chain management. This includes cloud-based technologies, IoT services, AI development services, machine learning development, and blockchain solutions.
Apart from this, digital transformation in logistics can also impact several parts of a business’s supply chain, such as:
Let’s further understand the significance of digital transformation in logistics and supply chains in detail.
According to Markets and Markets, the global digital logistics revenue will hit the $46.5 billion mark by 2025, accelerating at a CAGR value of 21.7%. This shows that modern businesses are relying excessively on advanced logistics systems, making the industry ripe for a digital overhaul.
Apart from this, businesses are heavily spending on digital transformation technologies to stand out in the competitive landscape. Enterprises in the supply chain domain are no different.
With the deployment of cloud-based and advanced technological solutions, the logistics industry can witness a huge shift in the next five years. Moreover, the ever-rising data volume in this industry can also accelerate the adoption of digital transformation in logistics.
The prominent reason for investing in the digitalization of logistics is to overcome the most pressing issues in the current landscape. These are:
Real-time data processing is one of the most crucial components in today’s supply chain management system. Lack of access to real-time data can lead to potential errors, delays, and inefficiencies.
The modern-day supply chain system is extensively connected, making the shipments pass through several points before reaching the desired destination. This process makes it difficult to track shipments and resolve issues of lost or damaged goods, if any.
Many logistics companies still rely on conventional systems due to feasibility. However, integrating new technology in logistics enterprises operating on legacy IT systems becomes a hefty task due to a lack of resources, often resulting in increased costs.
Working in cloud environments is the new normal for businesses. Still, many companies find it risky to adopt cloud migration strategies due to data security concerns. Consequently, migrating to a cloud-based model is until now a significant challenge.
Thus, to cope with these challenges and build a streamlined logistics system, incorporating digital transformation in logistics and supply chain becomes a necessity.
Digitalization of logistics can benefit businesses in several ways. Below are the prominent advantages of digital transformation in logistics and supply chain.
As logistics and supply chain technology advances, the need of the hour is digital transformation in logistics. This includes cloud-based software from providers, allowing for centralized tracking and recording of transactions.
With the help of integrated logistics digital transformation strategies, businesses can expect consistent and quality performance in their logistics operations. Moreover, further addition of technologies and software solutions in businesses will improve the overall operational efficiency of the supply chain.
The logistics industry is taking a big step forward by integrating digital technologies to provide users with real-time updates regarding shipping. This approach strengthens trust between partners and helps enhance customer satisfaction.
Digital transformation in logistics has facilitated customers to track their orders from beginning to end. They can leverage the benefits of logistics mobile apps offered by businesses, providing real-time updates about their shipments. Consequently, when all sections of the process are kept informed, credibility builds, trust increases and brand reputation elevates.
One of the notable areas where investing in modern software has resulted in immense success is routing. With advancements in transportation and GPS-powered navigation, drivers can easily pick the most efficient routes that offer a smooth driving experience with minimal delays.
In case of congestion issues such as traffic accidents or roadblocks, alternative paths will be suggested to the fleet drivers, helping them reach their destinations without delays. Moreover, this approach facilitates cost savings by reducing traveled miles and consuming less gas.
AI-powered predictive maintenance and analytics in the logistics sector turn out to be a boon for companies. Mobile data analytics enables them to figure out the issues in the fleets and take preventive measures remotely.
With the early identification of vehicles needing maintenance and repairs, fleet managers can quickly respond to minimize downtime, streamline services, and reduce expenses significantly.
Since the digital revolution permeated the logistics sector, businesses have seen an enormous increase in data. Consequently, it marks the need to invest in advanced analytical tools and techniques for better insights extraction and improved decision-making.
For this reason, companies started opting for exemplary AI development services to gain valuable insights and formulate effective business strategies. These AI-powered smart solutions offer process optimization, cost efficiency, and improved customer experience.
Digital technologies in logistics play a crucial role in embracing business transformation across this sector. Below are some prominent technologies used in the logistics industry.
Logistics businesses can leverage AI-based algorithms to create interconnected systems that automate complex tasks. Here are some of the major subsets of AI that help businesses in embracing digital transformation in logistics.
The role of natural language processing in logistics is to assist people involved with administrative tasks, such as document processing and data management. With robust NLP services, businesses can extract information from enormous datasets, generating actionable insights efficiently.
Computer vision is a new technology in logistics that helps track shipments using scanning devices. It is integrated with AI and machine learning to streamline the processes of sorting and classifying transported goods.
Predictive analytics is used by logistics businesses to forecast and plan future demands. By analyzing data with statistical algorithms businesses can easily predict patterns and make informed predictions for effective decision making.
Digital transformation in logistics is not just about using advanced technologies. It’s about leveraging the right tools and tech solutions that make the best use of available data and resources.
The massive amounts of data processed from varying sources demand for high-level connectivity and inclusivity. It is challenging for traditional IT systems in logistics, and that’s one of the reasons why several companies have shifted to the cloud.
Cloud computing enables businesses to manage and track logistics in real time, offering opportunities for improved flexibility, scalability, and cost-effectiveness. By leveraging cloud development services, they can easily integrate multiple data sources and enhance the visibility of all activities within the supply chain.
Using blockchain for businesses improves transparency and data security by recording transactions across different systems that can not be tampered with. This helps in tracing the entire journey of goods and shipments from manufacturing to delivery without worrying about errors and fraud.
Another prominent benefit of incorporating blockchain solutions in your business is smart contracts. These self-executing, code-based contracts bind two or more linked partners together in an agreement that automatically dissolves if all agreed-upon conditions aren’t met.
Also, blockchain-based digital logistics do not require intermediaries or brokers for related operations. The technology reduces paperwork, decreasing the delivery time and streamlining the process.
The digital transformation lifecycle in logistics and supply chain begins with a vision that needs to be aligned with your business objectives. Here is a strategic process to implement digital logistics for your business:
Defining a clear vision is the first step in adopting digital solutions for logistics. Ensure that the vision is in line with your organizational goals. These goals can be anything, like increased supply chain visibility, automated operations, or smarter quicker decision-making.
You need to evaluate your current systems and ensure that they are capable of operating using advanced tech solutions. Besides, your team must be equipped with all the required abilities to adapt to the latest business model. Switching to a digital supply chain wouldn’t matter if your team isn’t on board with the new approaches.
One of the crucial steps in facilitating digital transformation in logistics is to gain complete, end-to-end supply chain visibility by using a unified platform. Utilize increased transparency to streamline key processes such as logistics, demand forecasting, inventory management, and warehouse management.
You can streamline tasks and derive massive amounts of valuable data with automated planning. This process can easily automate repetitive and time-consuming tasks. However, automation should not be used for procedures that involve human intervention to cope with challenging circumstances.
To make wise judgments, supply chain professionals require access to real-time data. It enables them to work efficiently with suppliers and other logistics partners. Real-time data also improves visibility throughout the supply chain and aids in the detection of possible problems.
Additionally, AI-powered analytical tools can be used to enhance planning procedures and provide businesses with useful insights. Warehouse managers can use logistics digital solutions and analytics to manage inventory levels and prevent out-of-stock or overstocking scenarios.
Many companies have successfully implemented digital solutions for logistics to scale their business and accelerate their productivity. Here are some examples of digital transformation in logistics:
Amazon, one of the leading global companies in the e-commerce sector, has utilized advanced solutions to optimize its logistics processes. One of the key areas where the company has leveraged digital logistics is warehouse management.
Besides, Amazon has also integrated over 520,000 automated robots to significantly enhance inventory management.
To remain one of the top package delivery companies in the world, UPS embraced digital transformation in logistics. The company invested in AI and advanced analytics to gain valuable insights.
These actionable insights provide information regarding weather conditions and traffic patterns, assisting UPS drivers in finding optimal routes.
As a leading shipping partner across the globe, Maersk is renowned for its exemplary supply chain operations. The shipping giant adopted blockchain technology for its logistics operations, streamlining documentation and enhancing supply chain visibility.
Furthermore, Maersk has created a secure and immutable digital ledger for its shipping process using blockchain to mitigate risks and enable real-time monitoring.
While companies recognize the potential benefits of embracing digital technologies in logistics, many face challenges in selecting the optimal strategy for their implementation. The key lies in crafting a comprehensive roadmap to utilize the power of digital logistics platforms.
Appventurez is a digital transformation company that helps many businesses including retail manufacturing and other industries with their supply chain transformation. Some comprehensive services we provide to enable companies to enhance processes and introduce flexibility and resilience into their supply chain operations include:
Besides, we have already partnered with a few global brands and provided them with seamless digital products for smoother operation and real-time data derivation.
For instance, a Netherlands-based brand collaborated with Appventurez to modernize fleet management with data and telematics. We integrated tech-intensive solutions with road safety marketing to build the Gribb app, facilitating a safe and sustainable driving culture.
Our digital products enable businesses to overcome their initial resistance toward digital transformation in logistics, upturning their supply chain business and elevating their logistics operations seamlessly.
Q. What is digital transformation in supply chain?
Digital transformation helps businesses collect and analyze valuable insights regarding demand planning, asset management, warehouse management, and order fulfillment, providing real-time visibility at all supply chain stages.
Q. What does the digital transformation value chain mean?
The digital transformation value chain signifies the interlinked activities and phases required to leverage the power of digital technologies in logistics. It encompasses the entire digital transformation lifecycle to attain strategic business objectives.
Q. What are some notable trends in transportation that will drive the logistics industry?
Digital transformation in transportation is rapidly increasing, especially due to the emerging trends in the logistics domain. Some of the prominent logistics technology trends include: * Autonomous vehicles and transportation * Robotics in logistics * Mobility-as-a-Service (MaaS) * Blockchain in logistics * Investment in electric vehicles
VP – Pre Sales at Appventurez
Anand specializes in sales and business development as its VP - Sales and Presales. He supervises the pre-sales process by upscaling on establishing client relationships. He skillfully deploys instruments such as cloud computing, automation, data centers, information storage, and analytics to evaluate clients’ business activities.
Posted : 19 August 2022
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