The barriers between market players are coming down as traditional tier one vendor tools become more accessible to all types and sizes of logistics businesses.
Several technology trends are impacting the way logistics companies manage their business. Mobile devices such as PDAs, smartphones and tablets have become more affordable, making the hardware accessible to all sizes of organisations. With developers building ever-more mobile functionality into their software, the gap between tier one and tier two software has narrowed down to such an extent that leading functionality has become available to all at an affordable price.
A third trend noticed is the push for efficiency. Given productivity, competitive and financial pressures, it’s not surprising that logistics companies are particularly focusing on software tools that will help achieve efficiencies by streamlining workflows and reducing operational costs.
These three trends have combined over the last 12 months to encourage a more holistic approach to mobility. Logistics companies are moving well beyond simple bar code scanning and are introducing a wide range of mobile-based processes and systems across the business, from electronic manifesting, sign-on-glass delivery systems, and item level inter-company traceability to depot audits, pallet management and fatigue management. The idea of capturing data at the source of activity is extremely appealing, especially as a way to speed up processes by reducing the need to re-enter data, and removing time lags affecting the flow of information.
Recently, the mobility focus has shifted slightly to concentrate on the value of mobility as part of an integrated whole-of-business or ERP system. When all software works together as an integrated whole, data only needs to be captured once for it to become immediately available to all users, across all systems as required. This is where the real ROI of mobility lies and is likely to be the subject of continuing investment in 2015.
One good example is the flow of data from logistics to in-cabin telematics and GPS systems with the three systems working together to automatically optimise delivery routes while also accounting for fatigue management.
Mobility is also changing the logistics business by redesigning processes. Mobilisation is forcing companies to rethink their process flows, review how things are done and find ways to use technology to make improvements. Traditional backend tasks such as building the manifest, for example, are being shifted to the warehouse floor to reduce costs and improve timeliness.
EDI has been around for so long that it has effectively become commoditised. Once only feasible for large operators, it is now a commonplace tool among businesses of all sizes. However, this gives rise to a new set of expectations, especially from smaller organisations that seek more from their software investments but can’t afford to rely on a consultant every time they need to make a change. This has encouraged software vendors to introduce new tools that give customers more control over their EDI experience.
In comparison with EDI, the market for cloud ERP systems appears to be slowing. The potential of the cloud was a much-discussed subject in 2010 and 2011; however, concerns over data integrity, data security and data ownership have proven to be major hurdles, resulting in resurgence in demand for on-premise systems. Business conservatism around the cloud is unlikely to dissipate until these issues are fully resolved.
Changes in technology are helping to create a far more level playing field for logistics organisations. With the same technologies and functionalities becoming available to all, and the same opportunities for efficiency through automation, competition within the industry is about to heat up even more.
Given the level playing field when it comes to technology, it wouldn’t be surprising if smaller operators begin to successfully bid for contracts with large retailers. In some instances, their greater agility may prove to be a decisive advantage.
Most logistics businesses have dabbled with mobility in the warehouse but this is only the tip of the iceberg. By applying mobility across information systems and across the wider workplace, companies have the opportunity to achieve significant additional benefits, including lower operating costs and productivity improvements.
Just as mobility has brought tremendous change to the consumer experience, the ability to capture and view real-time data from almost any location is revolutionising the transport and logistics industry. Organisations are mobilising their systems and equipping staff so that they can remove manual and paper-based processes, speed the capture of data and share information faster. At the same time, these companies are discovering new-found business agility.
Wireless and mobile capabilities within the warehouse are far from new. For much of the past decade radio frequency (802.11 wireless) systems have been used to enable faster, more accurate picking, cut down on dispatch times and improve inventory management. Scanning is also relatively common in transport systems. Companies are using tracking applications to save hundreds of thousands of dollars in pallet costs and even the local post office has removed paper records from its proof of delivery process.
What is changing now, however, is the extent to which mobile functionality is being used within logistics operations. Rather than being considered a useful tool for one or two stand-alone applications, logistics companies are mobilising a wide range of business processes along with most, if not all, of their ERP and other core information systems. Mobility has become an expected part of everyday business activity and a competitive tool in any end-to-end supply chain solution.
Electronic proof of delivery, paperless warehousing and fatigue management solutions are perhaps the most commonly encountered mobility practices within the field of transport and logistics. However there are many other powerful mobile tools that can help improve operational and organisational efficiency.
The task of pallet management, for example, is made much easier with the assistance of PDA devices and a simple software addition to the proof of delivery solution. Together, the software and hardware allow drivers to capture real-time information as they deliver, retrieve or exchange pallets.
Manifesting is another activity that becomes far more efficient and far more accurate when using mobility tools. Armed with a PDA, logistics operators can “build” each load onto vehicles by scanning the freight at item level, enabling them to build the manifest on the fly. An accurate manifest is then automatically created in the back-end of the database or application.
Scanning freight at item level during depot-to-depot movement ensures real-time visibility of freight and reduces the incidence of “lost” or hard-to-locate items. This alone simple measure can save a lot of time within the depot by removing the need for manual audits. However, on those occasions when a depot audit is required, the use of PDAs for item-level scanning combined with good audit software functionality speeds activity and accuracy by alerting the operator to exceptions such as cartons, pallets or other commodities that shouldn’t be present.
In all these uses, the key to successful mobility is integration of the functionality with an organisation’s core ERP solution, so that the data is captured once and becomes immediately available, Shared across all systems as necessary.
When changes are communicated instantly, clients and partners can be kept better informed, and managers and staff can be assured that they are making decisions based on accurate, up to date information. With real time information, planning improves across the supply chain and waste is reduced. These are all factors that are becoming more important as organisations adopt more frequent delivery cycles, such as the “guaranteed next day’ deliveries now commonly offered by consumer web sites.
Earlier this year, the World Economic Forum report, Outlook on the Logistics and Supply Chain Industry 2013, noted that that global trade now exceeds US$20 trillion before stating: “Logistics is a critical service without which global supply chains would not be viable. The lower the costs and the greater the quality of services provided by logistics companies, the better off customers and consumers.” The report went on to add: “Logistics is a key part of the “plumbing” of the global trading system. The efficiency of logistics-related industries has a major influence on investment decisions of companies large and small, and thus affects the extent and location of job creation around the world.”
Innovation in processes and technologies has been central to the logistics industry’s growth and it will be crucial to the industry’s future as we learn to deal with emerging challenges such as increasing regulation over carbon emissions. Whether at the industry or individual company level, right now, one of the biggest innovations and therefore, opportunities in logistics is the mobilisation of systems and processes.