The growth and proliferation of digital technologies has led to a new paradigm in business known as digital transformation. The rise of the technologies like the cloud computing, artificial intelligence (AI), machine learning, and big data analytics have pushed the trend for digital transformation.
Digital transformation has become an essential element for companies looking to compete in today’s market environment. It is a process that transforms an organization by improving its efficiency through automation, optimization and digitization. The latest technological innovations are allowing business functions to be automated in the ways previously unimaginable, and the supply chain & logistics industry is no exception. The supply chain industry is one of the most innovative industries in the world today, with many organizations seeking a competitive advantage through digitalization.
In a recent survey, Telstra Global & the Economist Intelligence Unit found Logistics & Transport ranks 5th among 11 industries globally with 6.61 of digital transformation acceptance score. And the global spending on digital transformation in the logistics business is estimated to reach $84.6 billion by 2027. However, it is important to understand what this transformation means for logistics companies and how they can use technology to stay competitive.
What are the driving forces behind digital transformation in the supply chain and logistics industry?
Customer Demand
It’s no secret that customers want to know what products they are buying, when they can get them, how much they will cost and how long it will take. They want to know what steps are adopted to ensure that their order has been packaged properly and shipped safely.
Digital technologies like mobile app, customer portal, sales & CRM tools can improve the customer experience and improve the speed and accuracy of customer service.
In addition, supply chain companies must ensure that they are using latest logistics software solutions that are user friendly and flexible. This would make possible for their customers to find out everything they need to know about their orders without having to call customer service or email support staff for assistance.
Growing competition
In the supply chain and logistics industry, digital transformation is crucial to sustain in the competition. A company can no longer be successful with the traditional business model. The new approach of using technology has changed the business environment and resulted in a series of changes in terms of operations, management, processes and data management. To remain competitive, companies now have no option other than adopting new technologies that help them improve their productivity, reduce costs and increase revenues.
The most common reason behind implementing digital transformation is to improve customer experience with improved the speed at which goods gets delivered and provide visibility across the shipment.
Digital transformation also helps companies reduce waste by automating processes that previously required manual intervention or human oversight. This helps reduce costs and improve efficiency by reducing the time taken for various process within an organization.
Learn more from our experts how you can digitalize your freight forwarding & logistics business.
The need for increased efficiency
In the supply chain and logistics industry, the need for increased efficiency is one of the major the driving forces behind digital transformation. This can be acomplished through various means, but one of the best ways to achieve it is through implementing robust technologies like IoT, Blockchain, clod computing and AI enables solutions.
As a result, supply chain companies are embracing digital technologies to improve their operations and boost productivity. For example- In smart warehouses, robots and “cobots,” work alongside humans to speed up the work process and thus increase efficiency.
Again, Internet of Things (IoT) is one of the key drivers for digital transformation in the supply chain industry. Internet of things enabled logistics solutions can help companies achieve greater efficiencies by taking advantage of sensor data collected from different sources throughout the supply chains to monitor operations and improve before any problems occur. All these data helps businesses better understand customer needs and trends, so they can provide better service at lower costs for customers over time.
The need for greater Agility and Flexibility
The need for greater agility and flexibility is another driving force behind the supply chain businesses are thinking about how they do business today. The digital revolution bought by the e-commerce giants like Amazon, Alibaba and Flipkart have disrupted traditional retail models. The emergence of new transportation methods, such as drones and robots, can deliver packages in real time without any human involvement. And the introduction of new payment platforms, such as PayPal, Apple Pay, Google Pay etc., allow consumers to pay for goods using their mobile phones.
To remain competitive in the future, supply chain companies have understood the ability to react quickly and effectively to changing market conditions.
The digital transformation has created a new way of doing business which is more efficient, cost-effective, and customer-centric. It also enables companies to improve their operations by improving their supply chain management processes. Companies with a strong commitment to digital transformation are well equipped to survive in an increasingly competitive market. They are able to react faster to changes in their business environment and make smart decisions about how to respond to them.
Finally let’s be honest. Currently, the industry is overwhelmed with a plethora of ways to approach its needs and address its challenges, be it with new technologies, new best practices, new methodologies, new everything. But digital transformation is one area which is across the board, affecting every area of operations, projects and business; and will require an effort that spans into the IT realm and beyond.