People have been using digital technologies in the logistics industry for decades. What is transformative about the technologies currently deployed?
New smart systems, artificial intelligence (AI), and internet of things (IoT) devices can streamline the logistics industry. Additionally, widespread digital documentation facilitates better standards of consistency, accuracy, and accessibility. Through NMFTA’s Digital Standards Development Council (DSDC), we have pioneered this transformation through consistent efforts to identify the roadblocks and solve the problems that create them.
What Is Digital Transformation in the Supply Chain Industry?
Digital transformation, or digitization, refers to using digital solutions for logistics. Intelligent systems can streamline supply chain management, reduce the risks associated with inventory management, and improve the overall performance of logistics companies.
Emerging technologies include IoT devices, AI, machine learning, traditional supply chain automation, and analytics tools. Combined, these systems can automate repetitive tasks, facilitate data-driven decision-making, and improve the overall efficiency of any supply chain.
Benefits of Digital Transformation for the Transportation Industry
Some benefits of embracing digital transformation include:
Increased Efficiency
IoT devices can help keep track of goods as they move through the supply chain, providing the information needed for effective planning. Analytics tools can highlight potential issues and arm you with the data needed to make effective decisions about your inventory.
Reduced Costs
Properly optimizing your inventory helps you maximize profits and minimize waste. Inventory planning can reduce the space taken up by products that don't sell and help you optimize your operations to focus on fast-moving profitable goods.
Greater Accuracy
Manual processes can be time-consuming and error-prone. Digital solutions for logistics can automate menial tasks, allowing them to be completed faster and more accurately. This reduces product waste and keeps operations moving smoothly.
Sophisticated tracking systems can also help maintain regulatory compliance, track driver hours and fleet maintenance records, and alert you to potential issues before they become a problem.
Improved Customer Experience
Faster processes and more accurate, better handling of goods means fewer inventory errors and misdirected shipments. Digital solutions can let your management team access the data needed to make decisions and provide clients with shipment updates. Happy customers are more likely to be repeat customers, boosting your bottom line.
How Are Digital Processes Addressing Challenges in the Logistics Industry?
Various emerging technologies can help address common challenges in the transportation and logistics industry. At NMFTA, we’re on a mission to streamline digital efficiency in the logistics industry with the DSDC. Our goal is to unify all perspectives in the supply chain process, including shippers, 3PLs, and carriers for both LTL and FTL stakeholders, and develop universal digital standards that maximize optimization in logistics.
We seek to facilitate improvements in digital transformation through the following:
Real-Time Tracking
Telematics software, sensors, and IoT devices help track packages and your fleet in real time. The potential goes beyond simply using GPS trackers to monitor trucks. Pallets can be tracked to provide detailed metrics about their route and how long it takes to process them, and sensors can monitor your fleet and provide feedback on when maintenance is required.
Information Management
Digital electronic bills of lading (eBOLs) can replace traditional bill-of-lading tools, offering a streamlined experience that saves time and protects your business. Logistics software can track everything about operations and provide logistics company leaders with information about their inventory, shifting demand, fuel prices, the condition of their fleet, and other metrics so they can make smarter business decisions.
Optimizing Operations
AI and machine learning add a whole set of capabilities to traditional logistics applications. If provided with good-quality data sets, AI management tools can assist with inventory management and demand forecasting and even help transportation companies optimize their routes.
AI can't automate everything, but when combined with human intelligence, it can provide real-time insights based on rapidly changing data.
What Challenges Do Logistics Companies Face When Adopting Digital Solutions?
While the DSDC was designed to simplify the digitization process, preparation is more effective when you know what challenges you may face ahead of time. The benefits of digital transformation are clear, yet many companies are still reluctant to adopt new software solutions. Let's consider the reasons for their reluctance and how they can be overcome.
Cost of Adopting New Technologies
Large companies with complex legacy IT systems may find it challenging to adopt new tools. The cost of integrating a new system into an existing workflow can be significant. Digital transformation can save transportation and logistics businesses a lot of money in the long term, but selling the benefits to leadership can be challenging.
Training Difficulties
All staff members interacting with the new systems need training, which requires taking them off the road or out of the warehouse. In some cases, that training needs to be delivered by external contractors, adding to the cost of adoption.
Employee Resistance
Change is intimidating, and long-time staff members may resist adopting new systems, especially if they're perceived as difficult to learn. However, for a new system to truly be effective, everyone must be on board with it.
Ensuring employee buy-in is an essential part of change management in any company. Therefore, it is necessary to talk with staff members at all levels and roles early in the process.
Cybersecurity Issues
Any time you add online services to your workflow, you are at risk for cyberattacks. AI and machine learning solutions also tend to rely heavily on cloud services. Before making sweeping changes to your workflows, it's vital you consider cybersecurity.
Research the systems you're thinking of using, and look into their security track records and the data protection procedures they follow. Educate yourself on cybersecurity best practices, and provide security training for your team members.
Implementing new security policies adds to the cost of adopting new systems, and some organizations may see this as yet another barrier. However, a well-implemented digital transformation can save the organization money in the long term and put it in a position to grow and scale while maintaining high customer satisfaction.
Are You Ready for a Digital Transformation?
Digital transformation is more than a buzzword. Many logistics companies implement AI-powered analytic tools and management applications to help them make better decisions about their business's operations.
Sensors and IoT technologies can provide vast amounts of data about every aspect of your business. When processed with the right tools, this data can provide insights you would have never thought to seek, but that can significantly improve your business's safety and efficiency.
Digital transformation can seem intimidating, but it pays dividends in the long term. If you're looking to adopt a new digital standard in your organization, NMFTA's DSDC is here to help you shape the future of logistics.
