DIGITAL TRANSFORMATION IN LOGISTICS

As logistics has evolved from an operational sector to one that provides valuable data and information for production and sales, companies have realized that they need more complex solutions and tools.

This evolution is now part of Industry 4.0, or the fourth industrial revolution, in which technology is not just a part of the process but an essential element to guarantee competitive advantages, efficiency, and agility.

Currently, the technological tools for digital transformation in logistics are much more precise, independent, and intelligent. That is why we now have access to systems capable of capturing, processing, and analyzing massive data.

It was precisely in this scenario that Big Data, Artificial Intelligence, and many others expanded the borders of IT to impact the entire production chain. Are you ready to discover why the digital transformation in logistics arose, the biggest challenges of these new tools, and the prominent examples of innovation?

What does digital transformation in logistics mean?

The concept of digital transformation refers to the implementation of new technologies in all areas of a company to improve its efficiency. In this way, the digital transformation in logistics represents the integration of new digital capabilities in storage, order preparation, or transportation, among others.

The digitization of all company sectors is a trend that will continue and that, little by little, penetrates the main economic sectors, although at an uneven pace. According to a study by the American consulting firm McKinsey, companies prioritize using new technologies in their marketing strategy (49% are on it) and in their products and services (21%). Only 2% of those surveyed acknowledge that they are implementing digital transformation initiatives in the supply chain. However, this is something that the sector needs to pay attention to. According to a Forbes Insights survey, 65% of logistics managers know that they need to renew their business model to survive in the digital age.

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The digitization of the logistics sector

Logistics has undoubtedly been one of the sectors that have changed the most over time, mainly in its role within companies and industries. The more strategic the sector became, the greater the need to digitize processes and automate functions and technological solutions for producing, controlling, and analyzing information.

The first steps on this path were towards the digitization of processes, followed by the automation of non-strategic functions. Finally, we saw that the sector adopted technologies in other sectors, such as Big Data, Artificial Intelligence, and robotics.

During the last few years, the technological tools of digital transformation in logistics have evolved considerably, and they are increasingly precise, independent, and intelligent.

Now, systems can capture, process, and analyze massive data in seconds. These are the main trends of digital transformation in logistics.

  • Digitization of information
    Digitization of analog documentation has been one of the first steps taken by logistics companies. Management systems such as CRM, route planning systems, ERP, etc. They are digital technologies that have increased in popularity as they automate multiple manual processes while streamlining and optimizing them.
  • Big Data and information in real-time
    With digital transformation, information is constantly flowing in large quantities and is always available. Real-time information, together with data intelligence and cloud computing, offers a complete vision of the value chain that includes flows, routes, weather information, traffic conditions, supply and demand of services by geographical area, etc. This information facilitates decision-making and optimizes costs and time.
  • Internet of Things (IoT)
    The Internet of Things has been a great revolution in logistics since it allows goods to be transported safely and automates transport processes.
    It consists of various sensors that capture information from the physical world and enter it into digital databases. Examples of these would be sensors inside shipping containers, which can capture information regarding temperature, humidity, storage capacity used, its location, and much more, to later pass it on to a digital database.
  • Artificial intelligence
    Artificial intelligence (AI) is transforming warehousing processes, such as information collection, analysis, and inventory processes. This allows companies to increase the efficiency of logistics processes in addition to revenue.
    Inside distribution centers or warehouses, AI is used to predict demand, change orders, and reroute products in transit.

Uses of digitization in logistics

  • Real-time cargo visibility assistant
    Both companies and customers gain multiple benefits by achieving transparency throughout the supply chain. For example, by knowing the status and location of cargo, customers can reduce demurrage costs, assess the efficiency of the logistics provider, and control the status and quality of cargo during transportation.
    The logistics company also benefits from greater transparency since it will have more vision and understanding of the logistics process itself, taking improvement actions, such as process optimization, better securing the cargo, or having more visibility about delays during transportation. The Real-Time Cargo Visibility Assistant is a comprehensive system that tracks and monitors the cargo journey, including information about its status and location.
    This use case requires a high level of support for technological innovations, such as IoT (internet of things), cloud computing, AI (artificial intelligence), and ML (machine learning).
  • Maintenance, repair, and predictive maximization of assets
    Predictive maintenance uses data-driven proactive maintenance methods designed to analyze the health of equipment, which can help predict maintenance and repair actions.
    In the logistics industry, multiple assets are used to carry out operations, such as storage equipment, trucking trucks, and spare parts. However, poor operational decisions about maintenance and repair can prevent this equipment from being used to its full potential. With IoT, fleet managers can proactively use dashboards and available data to prevent unexpected breakdowns once on the road. Before a truck breaks down, they will receive a notification for preventative maintenance and repair work.
    The implementation is done by collecting data from different sources, such as truck and spare parts IoT data, truck purchase information, and historical maintenance and repair work orders. From the customer's point of view, this solution can further meet their expectations by ensuring the delivery of goods on time.

The importance of digitization in logistics

Digitization in logistics is a competitive advantage today and a necessity for future distribution centers.

Digitization of all business sectors is a trend that will continue to grow and is gradually penetrating all economic sectors.

With the increase in competition, the price and quality of the products have leveled out, and the consumer can choose the delivery time as a differentiating factor in the purchase decision.

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Conclusion

The digitization of all production processes. Through new intelligent technologies, it has been possible to obtain complete traceability of all production, from raw material to finished product.

Adapting companies' logistics to the industry 4.0 of the future is an imperative that requires starting digital transformation processes that merge disruptive technology, mentality, and more sustainable production systems to be more efficient, competitive, and highly valued by society. Current, increasingly committed, and ecologically aware.

The use of transport management programs or software encourages digital transformation within any size of the company, regardless of the sector.

They bring multiple benefits by processing the data and information collected through different technological tools, managing to offer greater visibility by brands and companies to their final consumers. This, in turn, generates better loyalty on the part of end customers since they are given a quality consumer experience and up-to-date concerning consumer expectations and new trends.

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