Automation in logistics and transportation

Posted in Business Applications


Automation in logistics and transportation

This article addresses the following topics:

  • Trends in transportation and logistics industry
  • Automation in transportation or logistics company

What is the situation in the industries?

The transportation and logistics industry is actually doing good. In 2018 market size was 9.8 trillion American dollars and it is predicted to be $12 trillion until 2020. Even after coronavirus outbreak and problems like lower number of deals, smaller bids and loss of contractors T&L industry isn’t doing so bad related to others. According to PWC, 5 trends are going to shape the direction of T&L’s development:

  • digitalization,
  • changes in international trade,
  • changes in the e-commerce market,
  • machines development,
  • software development.

Trends in transportation and Logistics industry

1. Digitalization

We can observe the digitalization trend in many industries for quite a long time. It is present in many areas of organizations like administration, finance, security. Also, we observe it in those areas traditionally associated with human interaction and soft skills like HR or sales.

Usual ERP systems become insufficient. Now that new tools like workflow systems are available, processes are seen in a more structured way which enhances optimization.

According to a survey conducted by PWC in 2019 – 54% of companies claim, that digitalization is going to increase their revenues. This is not surprising as we can already see a change in how customers interact with businesses, for example, while ordering transportation with their mobiles, sharing transport, or buying public transportation tickets online (via browser or an app).

2. Changes in international trade

Actually, we can already see that there are more and more trains traveling from China to the Europen Union. In the future, the increased traffic is going to cause a bigger number of investments in land transport (as an alternative to slow water transport and expensive planes). The new ways of goods exchange are going to result in better and more frequent international cooperation.

There other factors that are going to shape the above trend like barriers and price wars due to new regulations and globalization in the whole sector. Changes will result in lower prices and will motivate companies to introduce new transportation and logistics services.

3. Changes in the e-commerce market

E-commerce market predictions are quite optimistic. In 2019 its value was estimated to be 3535 billion American dollars and up until 2023, it should double to 6542 billion. Though considering recent growth due to coronavirus pandemic, this number can be actually bigger.

Due to growing customer expectations, an increase in sales and society aging to keep up T&L companies will have to create new innovative solutions on every step of the value chain.

4. Machine development

Logistics and transportation companies can benefit from the usage of new machine solutions. Many bottleneck problems can be solved by constantly developing technologies like:

  • robotization,
  • electromobility,
  • high-speed railway,
  • last-mile optimization.

Thanks to these kinds of solutions we will observe an increase in machine-human interaction which is inevitably going to decrease the human-human interaction. Though possible gains are better accessibility and more flexibility.

5. Software development

Sofware technology can be a big opportunity that many companies still don’t take. Though PWC is predicting that soon more and more companies will decide to make use of it. Development of solutions using artificial intelligence, the internet of things, big data and blockchain as well as big pressure on creators to make them bring savings and increase in efficiency will enhance new innovative solutions in the transportation and logistics industry. Processes are going to be improved with the usage of:

  • intelligent transportation systems,
  • process automation,
  • prediction models,
  • blockchain technologies.

Thanks to the above it will be possible to control better cargo transport and an increase in customer service, for example, enabling easier pick-up. Then automation in logistics will make processes execution faster, cheaper and more efficient.

Automation possibilities in transportation and logistics

Process automation can generate big savings in many transportation and logistics companies. There are many areas in organizations in which human work can be replaced partially or completely with a software.

1. Passing orders to the warehouse

Manually inserting orders might be optimal if the number of them is around 20-30 daily. Though if it is bigger, workflow system implementation is worth considering. It would automate the whole process with forms autofill or direct transfer of orders to the warehouse system. It can also handle the system as a whole – orders and warehouse operations all in one platform.

2. Passing orders to the warehouse

Receiving, completion, quality assurance, packing and handing out products should be documented in order to keep constant control over warehouse and order status. Implementing an application that would automatically generate documentation may bring a lot of savings as documenting can be tedious and time-consuming. Also, all communication regarding orders could be handled in the same system. Many times messages between warehouse workers or with suppliers are lost in overloaded email boxed and this could be solved with a transparent workflow tool.

3. Stock monitoring

Workflow tools allow monitoring stock at any given moment thanks to documentation of processes that take place in a warehouse. All data is automatically modified and the system can generate reports periodically.

4. Parcel location tracking

Today tracking parcels is a must. Thanks to the right tool each change is going to be saved and information will be accessible from any place and any device with a web browser installed (laptop, tablet, smartphone).

5. Documents workflow

Documents automation in transportation company allows to store, process, create and manage documents with workflow mechanisms. Companies that use it to get rid of problems like:

  • lost documents,
  • overwriting new versions,
  • limited accessibility,
  • human errors while manually inserting data,
  • making the documents safe and secure,
  • no history of changes,
  • lost requests for verification,
  • no access to all documents status.

6. Communication

It’s worth it to automate communication in order to make it more efficient and save time on putting information in order. Workflow system allows filtering information by processes and automated labeling of messages. Thanks to that it’s much easier to search for necessary pieces especially when work gets more intensive.

7. Other processes

In a T&L company, many processes aren’t directly related to the core business. Though anyways they have to exist so that the organization can function. The workflow system can handle the processes all at once. Here are some examples:

  • website creation,
  • vacation requests,
  • work time tracking,
  • on- and offboarding,
  • surveys among employees,
  • business travel expenses,
  • new IT equipment,
  • raising new initiatives,
  • handling GDPR,
  • debt collection,
  • handling security incidents.

Automation in the transportation and logistics industry can bring big savings

Implementing process automation in a transportation or logistics company is a great opportunity to increase efficiency, save money and minimize human errors for example while placing orders when a small mistake can cost hundreds of thousands. Complexity reduction comes naturally when one system is used to handle many processes. The workflow system will make it easier to manage information, improve communication and create documentation that many times is being forgotten while work tempo increases. Its implementation is a decision that does require time and money investment though the benefits are usually incomparably bigger.

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