Understanding digitization in logistics

Digitalisation also offers numerous process optimisations and far more efficient coordination in logistics than before. But what does the term “digitalisation in logistics” actually mean? We explain it to you in our blog article.

The benefits of digital processes in logistics

Digital processes have also revolutionised the logistics sector. Digital processes in logistics affect both internal company processes and external processes with customers and partners. Automation is replacing manual processes that were previously time-consuming and error-prone.

And these are the advantages of digitalisation in logistics at a glance:

• Reduction in transport costs
• paper savings
• Faster processes and faster transport
• Support for employees in their daily work
• Minimisation of the error rate
• Increase in quality
  Better service for customers
• Contribution to sustainability
• competitive advantage

Below we break down what these advantages look like in detail.

How digitalisation improves logistics processes

Digitalisation improves logistics processes on numerous levels.

Reduction in transport costs

Digital tools select the shortest delivery routes, currently available capacities and information on weather and traffic conditions, making day-to-day transport easier for employees. This not only shortens delivery times. Customers are also supplied faster, are more satisfied with the logistics service and transport costs are reduced in the medium to long term.

Paper saving

The days of printer jams are over. Nowadays, invoices and orders are sent digitally. This saves companies more paper. Apart from that, digital access makes it easier for employees to work on a day-to-day basis, in the office or “on the road” – using smartphones or digital clouds.

Faster processes and faster transport

Automated processes enable employees to quickly obtain a precise overview of stock levels and delivery schedules. Digitalised inventory management and tracking not only speeds up internal processes. The transport of goods is also quicker.

Supporting employees in their daily work

Departments communicate with each other faster and more efficiently using digital processes. Manual data entry is no longer necessary. This gives employees more capacity in their daily work. With digital follow-up systems that show the stock status in real time, they can maintain an overview, optimise response times and manage supply chains more easily. In addition, all employees have access to stock and delivery processes, which saves communication loops (and therefore money).

Minimisation of the error rate

The digitalisation of logistics processes helps to reduce human error rates. Automated processes increase accuracy and thus minimise costly delays. This gives logistics companies the opportunity to be much more agile and nimble in the market.

Increase in quality

As soon as transparency and efficiency in logistics processes increase, so does quality. This is because it is now possible to respond even better to customer needs and optimise quality in logistics. This not only includes faster deliveries, but also improved service. Customers always receive precise information about products to be delivered and those that have already been delivered. Internally, digital tools support the organisation and process mechanisms in the warehouse and inventory area. Products that are no longer usable in terms of quality (e.g. after the best-before date) are also quickly identified and sorted out.

Better service for customers

Digital processes enable companies to inform their customers about the current location of their goods at the touch of a button. Automated messages via app or email also help companies to organise the supply chain transparently.

Contribution to sustainability

Last but not least, the reduction of paper and shorter transport routes help to protect the environment. This aspect is particularly important to many customers at the moment.

Competitive advantage

A company with complete transparency of its supply chain through the use of digital tools has a clear advantage in the market. Only if a company manages its information in a modern way will it be competitive in these times.

These are the challenges of digitalisation for logistics companies

Of course, innovations are not everyone’s cup of tea, which is why there are real challenges when it comes to implementing digital processes in logistics companies.

It is often difficult for smaller companies in particular to keep pace with market requirements. The pressure to innovate is increasing and processes are becoming faster. However, every new process takes time. And so every employee needs to accept digital processes so that they run smoothly.

A well thought-out digital solution, perhaps even centralised, is required to coordinate a large number of projects. It becomes difficult if, for example, data is only loaded and monitored via apps but not in centralised locations. Non-existent master data can also lead to problems.

It also depends on how logistics companies approach their digital strategy. Does the company adapt to the existing digital processes or vice versa? At Wanko, we always adapt to our customers’ internal processes. https://wanko.de

Last but not least, digital processes in the logistics sector require all employees to have at least a basic understanding of technology. After all, a technical device needs to be used correctly. Employee training supports the acceptance of new digital introductions. This goes hand in hand with project resources. Digital processes can only run smoothly if sufficient technical equipment (laptops, mobile devices, sufficient server capacity) is available.

These are the challenges facing digital processes in the logistics sector summarised once again:

• Pressure to innovate from the market
• Acceptance of digitalisation
• Simultaneous coordination of a large number of projects
• Master data situation
• Adaptation of logistics processes to digital
  digital processes or vice versa
• Employee expertise and affinity
• Lack of project resources

Digitalisation in logistics – why people will never be superfluous

Digitalisation in logistics: yes, abolishing human labour: no. The question of the redundancy of human labour arises with every modern innovation. The discussion about replacing people or jobs is legitimate. But fully automated processes always require people. Either for the development and handling of new digital tools and content or simply because an app, for example, can only execute limited processes. Ultimately, people are always needed to get products from A to B. The expertise of an employee is always needed when problems arise and only a human brain can think ahead.

However, digital processes simplify daily work and the execution of numerous tasks. They only rewrite the definition of people’s work. Expertise and control remain with the employee.

How much digitalisation is necessary

Each company decides for itself how much digitalisation is necessary. The current demands on logistics are increasing for both customers and partners. In the course of this, as always with a business management approach, the investment costs incurred must be weighed against profits.

Which digital software and which digital tools are useful in logistics

There are various digital software and tools that simplify all logistics processes. Most providers specialise in one of these 3 types of software:

• Software for efficient warehouse management
• Tool for planning and controlling transports
• Telematics software for transparent and digital route planning
• At Wanko, we offer you the all-round carefree package with all 3 management systems.
• Transport management system PraCar
• Warehouse Management System PraMag
• Fleet Management System PraBord

Find out more here: https://wanko.de

Examples of digitalisation in logistics

With our Wanko route planning and telematics software, we recently completed a complex project for Transgourmet Germany. The company supplies hotels and restaurants, company canteens, schools and retirement homes with fresh fruit, vegetables and frozen food. Every day, up to 800 lorries swarm out from 13 distribution centres in Germany. As a full-range supplier, Transgourmet trades in a total of 35,000 different items, 15,000 of which are permanently in stock. The clients from the catering and communal catering sectors are primarily concerned with 100% delivery reliability. This requires perfectly functioning digital processes.

With the implementation of:

• optimised route planning
• Reduction of necessary routes and lorries used
• maximum transparency
• simple returns processes and low error rate

we are part of the fundamentally modernised IT infrastructure of this major transport service provider.
Are you interested in other successful Wanko projects? Click here hier.