While the globalisation connects different markets and opens new opportunities for companies to grow their businesses, an efficient logistics process becomes a mayor priority in the value chain. Regarding soaring competition, increasing complexity and the need to speed up the logistics process, modern technologies become an indispensable part of it.
What are these new technologies? How do they improve the logistic process and what are the benefits for the companies that implement new logistics technologies within their system? To answer these questions, let’s first have a look at some important innovations in the field of logistics technologies, which are the key drivers to improve logistics management processes.
Information: Information is one of the most relevant factors in order to increase efficiency in logistics operations. Due to pressure on costs, a lot of companies have relocated their production to low-cost countries in emerging markets around the world. As a result, you may find yourself trying to manage a global logistics operation. But, uncontrolled logistics costs can spiral and wipe out any savings a company gains at the production level. Therefore it is essential to gather information at each stage of the logistics chain so that the company can identify inefficiencies and improve operational costs.
Networks: Networked communications can improve market logistics operations by linking members of your supply chain. Sharing essential market and operational information helps increase productivity and reduce lead times. A single integrated network supports a logistics chain that can respond rapidly to change or new opportunities
Tracking: Cargo theft is a growing problem, with annual losses at some $30 billion, according to the Federal Bureau of Investigation. Machine to machine (M2M) technology is making logistics more secure; a mobile transmitting device attached to the cargo allows operators to track and monitor the cargo throughout its journey using global system technology and wireless communications. Any attempt to interfere with the security device sends an alert signal to the operator to initiate a response.
Portals: You can use website portals to provide members of your logistics chain with access to information and applications to support purchase order management, demand forecasting, shipping notices and bar-code label generation. This can improve collaboration between supply chain members and make it easier to manage essential logistics information.
RFID: Radio frequency identification tags provide information on a product and its journey through the supply chain. You can program the tags to capture certain types of information, such as when and where products are manufactured, packed and shipped. The data can be used to improve the efficiency of warehouse and inventory management and other logistics operations.
Computer aided programs: Computer aided programs can be used to optimize capacity planning. Capacity planning includes warehousing, transportation, material handling and human resources. Computer aided operation research models such as linear programming and waiting line models can be used in planning capacity with the objective of providing high quality customer service by investing minimum in capacity.
5 benefits provided by implementing logistics technology:
- Efficiency Gains – Significant gains happen when old, manual processes are performed by new system functionality or are totally eliminated by a new way of working within a software application. More efficient logistics operations allow companies to lower costs and operate with greater efficiency.
- Competitive Advantage – These systems allow companies to offer a higher level of customer service through better communicate and issue resolution. Disruptions and issues are resolved faster compared to competitors who rely on manual processes.
- Responsiveness – Logistics systems create a flexible supply chain. Here, multiple parties communicate easily as freight moves and collaborate on how to best overcome challenges while still meeting customer’s expectations.
- Compliance – A company is assured of performing its due diligence to meet government requirements (import/ export, screenings, classifications, etc.) with automated processes provided within the system.
- Analytics – Reporting becomes standardized, on time, and in most cases on demand. With the system stored data, analysts can mine trends, identify recurring problems, and uncover cost savings that are missed with manual data collection methods.