Why is a single integrated digital logistics platform the need of the hour?
Did you know that the logistics industry's value in India is expected to reach $330 billion by 2025? Due to the rapidly developing economy of our nation, business and commerce are booming. Companies in an industry producing goods require logistics services to transport these goods to another enterprise. The other enterprise may further use these to manufacture the final products. Logistics refers to managing the transportation of goods between one point (origin) to another point (destination) and ensuring the availability of the right resources, like forklifts, trucks and cargo, at the right time. Given the growth in the logistics sector, traditional logistics systems are being replaced with technology-integrated digital platforms to make them more efficient and robust. Growing demand, unfulfilled deliveries, lack of efficiency, etc., have encouraged companies to adopt integrated digital logistics platforms that offer transparency. Let’s explore integrated digital logistics platforms in detail and why they are the need of the hour in this blog post.
What is an integrated digital logistics platform?
An integrated digital logistics platform encapsulates multiple standalone logistical processes within one system to help improve coordination and ensure seamless integration within departments and stakeholders. Each stakeholder and their actions can be tracked, making the entire logistics process seamless and transparent. It enables better planning, forecasting, and transportation of goods. Further, it also helps ensure the visibility of different trips. According to research by Mordor Intelligence, the Digital Logistic Market is expected to register a CAGR of 7.89% during the forecast period of 2020-2025.
Need for the shift from a traditional to a digital logistics platform
Paper-based documents, permits, and multiple phone calls are commonplace in a traditional logistics system. Unfortunately, these act as roadblocks or dead-ends in approvals or processes, slowing down the overall supply chain. In addition, there is no transparency for tracking the status of trips. On the other hand, in an integrated digital logistics platform, each stakeholder's actions and transport status quo in transit are transparently visible across the supply chain. Companies can make their supply chains more agile by integrating multiple processes across the supply chain with digitalisation. It enables visibility across the supply chain, better planning of the entire logistical process, and improved business efficiency. In fact, the Indian fleet management software market is expected to reach a CAGR of 15.2% during the forecast period (2021-2026). (Source: MarketResearch.com)
Benefits of an integrated digital logistics platform
We’ve explained the meaning of an integrated digital logistics platform and why it is important. Now, let’s discuss the benefits of implementing this platform in your enterprise. Read on to learn about them.
• Integrated systems
Logistics is a complex process, owing to the multiple stakeholders involved. When there’s no transparency to see the supply chain, it acts as a huge hindrance. Hence, an integrated logistics system helps organizations simplify the logistics chain from the start to the endpoint. In this case, the paperwork required before loading a truck and after unloading at the destination point and the checkpoints between the start and endpoint are processes businesses can easily view through an integrated system. An integrated system simplifies the paperwork process and helps identify trucks & drivers. Moreover, it helps with centralized documentation and trip reporting, ensures transparency in tracking trips, minimizes philfrage and freight diversion, and helps with many actions that may not have been possible with a traditional logistics setup. Moreover, in the case of an integrated digital platform, documents like permits and delivery orders can be easily fetched from government portals directly onto the mobile application, which reduces paperwork and hassle. Additionally, integration with backend ERPs becomes possible. For example, companies may require access to documents like purchase orders and permits daily. Such processes can occur faster and without hurdles by implementing an integrated digital logistics platform.
• Saves costs
Usually, there are considerable costs involved in the logistics business, like setting up manned entry points, manual document verification, costs of hiring loading operators, costs related to theft or pilferage, delivery inefficiency due to delays owing to route deviation, etc. Unfortunately, such costs cannot be tracked, optimized, or managed in a traditional logistics system. The costs mentioned above can be reduced, tracked and optimized with the help of an integrated digital logistics platform, which would automate manual checkpoints. It will help optimize manpower costs, save time by digital documentation, and improve tracking and transparency to avoid pilferage or route deviation, enabling timely delivery. Hence, businesses can save costs and improve their bottom line.
• Reduced turnaround time and better profitability
When businesses use traditional logistics systems, they cannot get trip data like the days taken to fulfill orders, travel time, fuel consumption, etc., that could have been used for analysis purposes. Analyzing such data would help them plan better, optimize their existing infrastructure for improved profitability and ensure optimum utilization of resources. On the other hand, an integrated digital logistics platform enables us to access trip data from one central location. This data helps plan the trips better and utilize it for better decision-making. It also helps us know the actual travel time of trips with telematics, reducing the turnaround time for future trips. Let’s take the example of a company that delivers goods to a particular destination in 2 days which is doable in 1 day. With the help of such digital integration, they will be able to analyze the gap better. For example, changing the route, using more efficient, faster trucks, etc., can reduce the turnaround time. When the same is done for cargo and trucks, imagine the number of additional trips the company can complete with the same infrastructure. It ensures logistical efficiency and improved profitability.
• Reduce scope of theft and fraud
Artificial intelligence-based business processes like automatic number plate recognition and theft or fraud detection help ensure that the goods are transported from one location to another without any blockages in the logistical processes. In addition, telematics helps us identify any route deviation and track drivers’ location and movement, hence reducing the scope of thefts or pilferage.
• Trend analysis for improved profitability
Unlike a traditional logistics system relying upon paperwork and manual processes, an integrated digital logistics system utilizes intelligent algorithms that identify data trends. For example, optimum utilization of existing infrastructure can be made possible. The business can ensure that trucks are not returning empty on a route after unloading products at the destination point and plan freight orders for the return trip. Additionally, this can also help reduce idle time and hence maximize profitability.
• Higher customer satisfaction due to transparency
Imagine that there is a large-scale industry selling goods to its clients. It may wish to transport its products to multiple locations across India. A traditional logistics system may involve a lot of calls to drivers asking them about their location, the current status of the orders, and multiple documents may be involved while the product is traveling across multiple states. When the company moves to an integrated logistics platform, it will be able to easily fetch such documents from one central system, track shipments, and know the ETA (estimated time of arrival). Doing this helps the business to plan their loading/unloading docks accordingly, which reduces the idle time of trucks. Moreover, when the delivery arrives at the customer’s location at the promised date, it results in higher customer satisfaction and builds trust. Hence, it improves customer loyalty and encourages repeat business.
Conclusion
An integrated digital logistics platform improves logistical efficiency by multi-folds and benefits enterprises in multiple aspects. The logistics industry in India is undergoing a major digital transformation in terms of the digital supply chain ecosystem. Now that you know why a digital logistics platform is important, do you wish to digitally transform your supply chain ecosystem? Fre8wise is India’s first digitally connected supply chain network utilizing the power of cutting-edge technology to cut logistics costs and increase business productivity. If you wish to learn more about the product features offered by Fre8wise, head over to this page.