Mar 29, 2021, Business

5 main challenges in digitizing logistics

Aneta Skoczewska Business Consultant

It’s hard to imagine that an industry with such a complex assortment of processes like logistics can work without a proper digitization. Supplying to millions of businesses and consumers each month needs a highly practical approach and can’t be expected to operate in an old-fashioned manner. Whether it’s 3D printing or deliveries with drones, all of the major companies around the world make their own way towards digitization and there’s no doubt that it works to their advantage. Although it comes with challenges, they are not an impassable blockage. 

1. Reaching excellence in customer experience

No business and no service is perfect – customers know that. Nevertheless, they prefer working with companies that meet their requirements most precisely. Faster deliveries reaching any place in the world are the most pressing need. And that’s where we can use indispensable help from big data. Analyzing enormous amounts of information about customers’ needs and habits allows us to adapt and create new, coherent solutions. Now, let’s divide them into B2B and B2C.

Business to business

The most crucial challenge is optimizing operational relationships between the cooperating companies. The solutions are aimed at improving customer service and supply chain management, and involve CRMs, APS standards, or market places. 

Business to customer

A relationship between a company and its customers has to be optimized as well. The most demanding fields include: 

  • Tracking the package
  • Order status information
  • Self-shipping
  • Precise delivery date

What can be done to make it more effective? A dedicated, user-friendly application for consumers might work just fine – that’s super convenient when they’re able to check all the essential information in one, accessible place. Additional option can be a voice assistant that answers all the pressing questions via phone channel or a chatbot that communicates through our website. 

2. Maintaining transparency of processes, rates and service

One other thing expected by customers is full transparency of the processes and rates. Nevertheless, the issue is still being tackled. Rates are hard to keep up with and many companies have difficulties in calculating the exact charges. Although operational transparency may sound simple, it’s also not that easy to achieve. The process usually consists of so many separate segments and stoppages that it’s highly demanding to offer full visibility on every step that is taken. Even a failure in one simple aspect can ruin the best-laid plans. Finding a way to solve the problem will allow customers to check the stage of their shipment and the costs it involves. The next level is transparency of service that is supposed to get a client closer to what’s behind the scenes: customs clearance, scheduled pickups, deliveries. That’s how a customer won’t only know what’s going on with his shipment but also how it’s handled. 

3. Creating an operational culture within company

The transformation should start from the company’s very core. If it wants to go digital, it needs to have an open organizational culture that includes processes, operations, leadership, as well as employees’ motivation and engagement. Following the most essential values may be challenging but it’s a necessary step into digitization, including:

  • Openness and, once again, transparency – available and accessible information, no hidden agendas, and trust.
  • Ability to cooperate – effective collaboration among multidisciplinary teams to make the most of the digital tools.
  • Creating a solid community – sharing experiences, documents, discoveries, perspectives, and plans.
  • Mutual acknowledgement – appreciating one another and basing the organizational structure on merit, not power.
  • Processes automation and digitization – involving an agile manner of sharing documents and information, warehouse management, administrative support, shipping, and distribution.
  • Documents protection – securing information as well as ensuring their integrity and confidentiality.

4. Managing warehouse and fleet

Incorrect warehouse and fleet management can be a real stumbling block, having a negative impact on both shipment and customer satisfaction. That’s where we’ll need the support of IoT (Internet of Things). Providing physical assets with a digital vibe helps keep all the products in order, optimize the movement of people and vehicles, and thus reduce the number of needless runs and human interactions. Consequently, all the operations handled in a warehouse get more precise and efficient. 

And what about the fleet? The biggest success in logistics is delivering goods on time and keeping them in pristine condition. Simple as it may sound, the task can be quite demanding. Optimizing delivery management involves using unerring route planning systems that take account of the distance between delivery points, individual customer preferences, load placement, or vehicle capacity. IoT enables us not only to check the fleet’s location, but also to make further decisions in real time and, if necessary, reoptimize routes. Yet, fleet management is so much more. Using dedicated safety systems and integrated sensors, we’re able to follow maintenance needs for specific parts of vehicles and reduce the possibility of accidents caused by a human error. The opportunities mount up with every new technology and innovation. It’s worth being up to date.

5. Keeping it all safe and sound

Last but not least – probably the most demanding challenge in logistics: data integrity and privacy. Digitization has raised new hazards and risks that come with additional pressure for proper personal data safeguard. And the shipping industry hasn’t always been an unfailing one. Looking at the examples of large players such as Maersk or Cosco that became victims of reckless cyber attacks, we know that no one is insurmountable. Modern systems connect us and make our lives easier, but the more we rely on them, the more endangered we are and the risk of data being compromised increases. No customer wants to cooperate with an unreliable partner – that’s why we have to take significant care of cybersecurity.

We truly hope that the list of challenges didn’t scare you off and you’re still open to digitizing your business. There’s definitely more to be excited about than afraid of and we’re here to prove it. If you’re still in doubt, contact us. We’ll analyze your needs and find the most suitable solution.