Digital transformation in logistics: why is it a good move?
There are many reasons for industries to move towards digital transformation. Maybe the most flagrant is its inevitability. Some industries like media, banking or retail have embraced the digital transformation due to their industries and customers’ demands. Other industries, like logistics, have failed to be ahead of the curve on this transformation. The lack of adoption of digital innovation might very well be the downfall for significant industry sectors, including some of the bigger players.
With e-commerce retail sales predicted to grow to 26.8% of all retail sales by 2022 in the UK alone, the parcel delivery industry is already another part of the customer experience journey. Now, add this new industry paradigm to the 'UBER-era' rating systems and the expectations of premium customer experience. What do we have? An ever more growing need to help the customer have a seamless and personalized experience - from picking out their articles to the moment it is delivered to their doorstep.
However, on the delivery stage a client’s journey is frequently random, bumpy and a question of luck. If in one online purchase a customer can have a good and uneventful experience: parcel delivered on time and in good conditions; in other order he might very well have the ‘worst online shopping experience ever’. Can we avoid this?
Yes, we can. The solution is simple: digital innovation.
We already know the digital transformation arrived late to the logistics industry but is surely opening its way. The last years have seen a major focus and investment of carriers, retailers and logistics providers in rethinking their entire processes and way to do business. The supply chain optimization, digitalization of processes and customer demand for transparency are proving essential to help the industry grow and keep delivering the industry’s notorious 7Rs: the right product in the right quantity to the right customer in the right condition at the right place, right time and right cost.
The inevitability of the times is not convincing enough to digitize and digitalize your business?
Here are 5 good key-business reasons to do it:
Transparency in data is a win-win for every party involved. It’s a win for the senders that can easily track all their parcel information; it’s also a win for the carrier that has accurate, real-time data of the parcels and other goods, addresses and delivery status; and finally it’s a win for the customer that can better control when their parcel will be delivered. The idea is simple, digitize your paper records and your data will be quickly accessible, more controlled and transparent. You will have a control tower view over previously siloed stakeholders, allowing their connection and boosting efficiency.
Time is money and there’s no need or benefit for dispatchers to manually process parcels and route data. In a few minutes, a delivery management platform can do the work an experienced dispatcher would take hours to complete, without the dispatcher losing control of the process or the data. There are solutions today that can provide a seamless integration with your current data entry methods from uploading .csv sheets to full API integration. There are also advantages on the last mile delivery side: with route optimization, your drivers will always take the best route, lowering your fuel and time costs. This way, demanding customers also see their expectations met.
3. Cost efficiency
In 2016, the World Economic Forum estimated around 50% of trucks traveled empty on their return from a delivery. This lack of inefficiency means the double of the routes and clear, unnecessary costs to businesses. If not tackled, the costs will keep rising. With more and more e-commerce customers the trend is for the number of returned goods to rise. An integrated digital solution allows you to take into account both your deliveries and your pick-ups while optimizing the space available in your trucks – there are significant savings on fuel, time and even vehicle maintenance.
Every responsible business must consider CSR performance and environmental impact as part of their operational process. Road transport accounts for nearly 95% of all energy consumption in the transport and logistics sector, putting last mile deliveries as a big contributor for environmental impact, but also as great potential problem-solver. This is where adopting digital transformation can be a solution. Using a delivery management platform that optimizes your routes will not only save you money, but will save fuel and actual miles traveled, contributing to less greenhouse gas emissions and a more sustainable future.
5. Keeping up with the e-commerce industry
This is the reason that ties all the others together – the rise of e-commerce customer demand in industries like food delivery brings new difficulties to the game. With the arrival of new platforms offering a multitude of options at record-breaking delivery speeds, there is the need for efficiency while addressing food safety concerns. General to all industries, consumers now expect from carriers/parcel deliverers the same level of flexibility and convenience they receive from other industries. This is true for B2C and B2B customers. These demands are not met with paper logs but with multiplatform services, transparency and tendering to personalized ‘logistics of me’. After all, today a small business is capable to operate in a global market from their first day, adding to the competition.
Now, the big question stops being the why adopt digital innovation, and it becomes the how to do it instead. Digital transformation and digitalization don’t need to be a laborious and costly process. First look at your current procedures and see where you can optimize. Maybe there are some tasks you would like to automatize? Maybe you would like to collect more data from your routes? Or even just collect customer feedback? With these answers, you can then look into adopting a delivery management solution that allows you to tick all your boxes, and maybe even some other you didn’t know about.