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.