Digitisation is changing logistics

Were goods that organise their own transport or reorder themselves when stocks become too low? What may still sound impossible to many is already commonplace in some companies as a result of the digital transformation. Modern technologies, the development of artificial intelligence and the transformation of the Internet into the Internet of Things are already making possible what for many still sounds like future music. The industry is constantly changing due to new technologies. In this way, digitalization does not stop at logistics and transforms established processes and best practices. These changes are also summarized under the term Logistics 4.0. As a whole, processes, objects and partners are connected along the entire supply chain as never before. Autonomous systems that can perform tasks independently are typical indicators for Logistics 4.0. This makes things much easier, as routine tasks no longer have to be performed by humans. Of course, this also brings with it many challenges and changes. This article covers the advantages and impacts of digitalization in logistics and the challenges that need to be overcome.

What are the advantages of digitalization for logistics?

Digitization offers numerous advantages for all areas of logistics. The transport of goods is accelerated by modern technologies and in the long term costs for warehouse logistics can be reduced. In warehouse logistics, for example, mobile robots or virtual warehouses can be used around the clock without a break, thereby increasing productivity and saving resources in the long term. Machines also reduce the error rate and stocks can be reliably monitored and managed. These often boring and time-consuming routine tasks no longer require the use of employees who can devote themselves to more complex tasks.

In transport logistics, networked transport platforms in particular offer a major advantage. This makes transport chains less error-prone and more reliable. In addition, new technologies offer opportunities for more environmentally friendly transport. In the course of the digitization of data transmission, information logistics benefits in real-time, in order to be able to trace the location of goods at any time, for example, in the way that bills of lading can be transmitted directly.

Mobile access by smartphones and tablets to required data from, for example, anywhere in the warehouse also saves time and simplifies logistics staff.

Replacing documents with digital documents saves a lot of space, required documents such as contracts or delivery notes can be found more quickly and the lower paper consumption saves the environment.

But not only digital documents provide less storage space, but also better monitoring and control of inventory allows for a lower demand for storage space. Goods can be ordered when there is real need. Intelligent systems take on this task and monitor stocks around the clock.
Finally, digitalization also creates physical relief for logistics employees, as machining machines can be carried out.

How does digitalization in logistics affect a company?

Of course, the digital transformation of logistics has an impact not only on logistics itself, but also on the entire company. Despite the many challenges, however, the overall impact is very positive. The digitization of logistics and other areas of a company reduces resources and costs and increases efficiency, among other things. Productivity is increasing significantly in digitized companies. Furthermore, the error-free and fast delivery of goods, which is made possible by automation, ensures an increase in customer satisfaction. All of this leads to an increase in sales for companies dedicated to digitalization. What is more, the international networking that has become possible can also open up new markets, which in turn offer new potential for companies.

Another advantage of digital companies is that they are attracting more young talent. For example, modern companies have fewer problems finding and retaining skilled workers than their traditional competitors, who insist on old structures. The up-and-coming talent nowadays is a decisive factor for the company’s success.

Companies that use and deftly use modern technologies can also operate more sustainably. Innovations, for example, can make the transport of goods more environmentally friendly, which is an important factor in brand sympathy today.

Sometimes even the entire business model can be transformed by digitalization in logistics. New potentials and interfaces are revealed by the change and lead to innovative business models or small changes to existing models. This can be a major shift for companies, leading to skepticism or even rejection by executives or employees, as the status quo falters. However, it is worth pushing forward with these emerging business models, as this is the only way the company can become fit for the future.

What are the advantages of digitalization in logistics for the customer?

Digitalization is also an important step for companies from the customer’s point of view and offers the customer many advantages. The use of new technologies results in fewer errors and failures along the entire supply chain. This leads to a higher quality and a better customer experience. Furthermore, delivery times can be reduced by automation and the customer can look forward to faster deliveries. In addition, the digital transformation in logistics ensures greater transparency, as the customer can theoretically understand at any time where his goods are currently located. Prices can also be better understood by the customer through the increasing transparency, as he can see, for example, how many corners a product gets to him. This makes pricing fairer and clearer and gives the customer a sense of control and appreciation. In summary, digitalization, not only in the area of logistics, but best throughout the company, offers more opportunities to significantly increase customer satisfaction.

What changes do logistics employees have to expect in the course of digitalization?

Employees should also expect some changes in logistics in the course of digitalization. Automation and the use of robots mean that more and more simple tasks are being lost, as repetitive, little complex tasks are no longer performed by humans. This can be a relief for qualified employees, as they can put more energy into more complex tasks. For less qualified employees, it is important to start early on with appropriate retraining or further training in order to continue to be qualified for the changing activities. The corresponding training or further training will generally be necessary in order to fulfil the more demanding tasks accordingly. Companies have been starting to invest more in employee training and to recognise the importance of regular training. As an employee, it is therefore essential to be willing to continue training and to take advantage of the company’s offers in this way at the time of digitalization.

Digital competence is also becoming an important prerequisite for logistics staff and managers in logistics. Without these skills, even the most modern technologies will be of no use, because they should also be able to be used and understood by the employee. The job descriptions and requirements will therefore change with regard to digitalization. That’s why employees don’t have to be afraid to be replaced by robots or AI. Routine tasks are carried out by machines, but this offers completely new, unprecedented tasks for humans. As a result, new jobs are developing in every area of logistics. Employees and, above all, skilled workers are needed more than ever in logistics.

The elimination of tedious repetitive tasks can also mean new fun at work for many employees. If the new challenges are welcomed with open arms and there is a willingness to learn for life, exciting tasks and future-proof positions await employees in logistics.

What risks are to be considered if a company wants to digitize its logistics?

Digitisation also always comes with certain risks. Ensuring data security is a major issue, including in logistics. Networked transport platforms or virtual warehouses make far more digital data available than before digitalization. This data must be protected accordingly. Customer and supplier data must not be accessible either, and attacks on data security will remain one of the major risks for companies in the future. The legal situation is also constantly changing with the digital transformation and another risk is to be out of date and consciously or unconsciously triggering a legal dispute. However, through skilled workers and the constant effort to avoid these risks, they can be minimised and should not prevent companies from digitising.

What steps do you need for successful digitization in logistics?

Simple but effective steps can already be the digital creation of bills of lading or networked trucks. Automated warehouses are somewhat more complex, but also manageable in implementation. If you want to digitize even more comprehensively, topics such as driverless forklift systems or storage robots are particularly interesting for logistics. But no matter where you start as a company, every step towards digitalization already brings many advantages. However, it is important to first consider what you actually want to achieve through digitalization. Is it just a matter of cost savings or should productivity be increased? How can digitalization be integrated into the company’s goals? How do employees and executives compare to digitalization? These are just a few of the questions that should be asked before the digital transformation begins. If you know what the goals are and what your own digitalization strategy looks like, it is much easier to make appropriate decisions and keep track of them. If the company’s goals are unclear, digitalization can quickly lead to headlessness and nonsensical investments. A digitalization strategy is a prerequisite for a successful implementation of the digital transformation. Despite the importance of a strategy, it does not have to be perfect and can change with further advances and innovations in digitalization. It is, of course, important not to wait with the aforementioned questions and the preparation of the strategy until digitalization has overwhelmed you and the competitors have long since passed one. Instead, the digitalization strategy should be regularly examined and the company should be constantly put to the test.

What are the challenges of digitalization in logistics?

Digitalization itself is already seen as a major challenge by two-thirds of logistics companies. But where exactly does digitalization create hurdles for companies? Only by going a little deeper and identifying challenges can these be overcome. That is why we want to take a closer look at them here. First of all, a crucial challenge is to find suitable specialists for Logistics 4.0. They need to be able to implement and apply the new technologies and have qualifications that go beyond performing routine tasks. Existing employees may also need to be retrained, which requires companies to do a lot of organisation and investment.
Keeping up with digitalization is also a hurdle that has to be overcome time and again. Innovations in technologies and processes must be adhered to and digitalisation must not be seen as a one-off project in order to be able to keep up in the long term. Furthermore, companies need to invest more in research and development with regard to digitalization if they want to implement it successfully.
Finally, the individualisation of deliveries poses another challenge. Thanks to digitalization, customers are now used to getting exactly what they are looking for and getting tailor-made offers. This also means that more flexibility and individually suitable solutions are expected from the delivery of goods. If companies can meet these requirements, they can secure their customers even in times of digital transformation. What initially sounds like additional effort and high costs is made possible by intelligent machines. All these challenges can therefore be solved, but they should nevertheless already be taken into account in a company’s digitalisation strategy.

There is no way around the digitization of logistics

Studies prove that digitalization pays off and that it will make companies up to 30 percent more productive. Those who are not yet convinced should ask themselves how their own company can remain relevant in the future. Only through digitalization in all areas will it be possible to keep up with the competition and to be able to offer customers, whether in the B2C or B2B sector, interesting offers in the long term. In logistics, there are numerous applications for new technologies that should be used. In the future, big data and AI in particular will provide some innovations in logistics and it is worth keeping an eye on these developments. The goals of digital transformation, i.e. networking, the use of real-time data, decentralization and customer centering become particularly visible in logistics.