In a business, poor supply chain management leads to loss of time for a company, missed deadlines regarding when freight needs to be transported, and so on. Hence, ensuring efficient supply chain management is crucial. It is also the key to ensuring timely freight transportation from one location to another and optimally using resources (financial, human, technological, and physical).

One of the ways to ensure the efficiency of logistics processes within an organization is logistics digitalization. Logistics digitalization is a term that describes the processes to digitalize processes in the supply chain. Some examples are plant/mine logistics digitalization, railway siding management, warehouse management, tracking the freight movement across locations, etc.

These are the 3 Vs of efficient supply chain and logistics management (visibility, volatility, and velocity):

• Visibility

In a business, it is not sufficient to allocate freight/cargo to truckers or determine which cargo will be transported by rail/ocean, etc. There also needs to be a mechanism to transparently view the entire supply chain system, i.e., from the point of loading to unloading, and all other activities during this process. All of these activities are to be completed within a specified time frame.

Let's consider a trucker who needs to transport products from Delhi to Ahmedabad. Here, digitalization of logistics systems can help bring efficiency and transparency to the logistical ecosystem. For example, digitalization makes it easy to track the truck and the cities it will cover before it reaches Ahmedabad. This system helps ensure visibility across the route and optimize the same to ensure the right path is taken, preventing route diversions, minimizing idling time, and optimizing the travel time from one destination to another.

• Volatility

Supply chain volatility refers to the unpredictable changes within the logistics ecosystem. Factors that contribute to this volatility include the level of demand and supply, new technology in a business, competition in the logistics industry, etc. Logistics digitalization tackles the issue of volatility in the logistics ecosystem, as a company can efficiently perform and improve logistics management functions like inventory management, data analysis (better logistical planning), and freight theft control.

In the case of inventory management, artificial intelligence systems help companies collect data like the average level of inventory that a business is required to maintain each month. Hence, a business can plan stock needed on a weekly or a monthly basis beforehand. Therefore, there are uninterrupted logistical operations within an enterprise in this way.

Daily, a massive amount of data is generated by an enterprise, in the form of transactions done, trips completed, orders received, indents created, and so on. A company can analyze this data. For example, data may show a specific route that takes the least time while traveling from one destination to another. Hence, if the truck driver knows this before starting the trip, he will not travel on the wrong route, which helps him keep the travel time to a minimum.

Theft is a significant problem that businesses face from time to time. In this scenario, artificial intelligence systems step with ANPR (computer vision-based) technology. Here, automatic number plate recognition of trucks becomes possible. At the same time, freight moves from one city to another, utilizing optical character recognition (OCR) technology to capture high-speed images of vehicle registration plates/number plates. This image of the number plate is then converted to text using OCR. Using this technology, theft or fraud can be prevented, as it can be detected if the correct cargo is being unloaded at the right location.

• Velocity

The speed at which logistical activities occur in an enterprise is called supply chain velocity. In today's time, with the help of data analysis, companies can forecast or study projections of previous orders or patterns in a supply chain. This helps deal with any abnormality or spike in demand, ensuring smooth and fast completion of delivery. For example, there may be a sudden spike in demand for a product from a particular geography, which means that a business will need more inventory of that product and ensure that the nearest hub supplies freight items quickly. Here, digitalization systems in an enterprise can ensure the supply of a product to that geography from hubs in the shortest time. With such efficient digitalized processes in place, businesses can ensure velocity in this way.

Conclusion

By digitalizing your logistics ecosystem, you can start concentrating on the 3 Vs of efficient supply chain and logistics management: visibility, volatility, and velocity. Reap the rewards of a digitalized logistics ecosystem today to improve your existing logistics management functions.