Logistics has changed fundamentally over the past decade and the pace of change continues to accelerate. Some logistics companies no longer focus on making incremental gains but embracing new business methods, including tight integration between the company, agencies and customers to transform in real time, information on the entire logistics process. The companies that have not yet woken up to this fact will have to catch up soon or perish.
There is a disparity in the technological capabilities between large, medium and small logistics companies. The large players who use better technology than the others project it as a competitive advantage but the reality may be far from it. If we look at the actual scenario, we may find so-called huge technology investment not so huge and a large workforce still doing the work manually.
The challenge to more traditional companies is the sheer scale and speed of tech-enabled change required now. How can the logistics company drive change not just in certain processes but across the business? The agility and speed to market achieved by new technology-led players has proved the value of huge technical investment and innovation. For companies still reliant on legacy systems to run their operations, making the change is very much essential for survival.
Companies that overlook technology investment stifle innovation. We can see even large, globally recognized logistics companies taking days, if not weeks, to revert even on quote requests. Most communications happen through email with an attached or pasted on Excel spreadsheet, instead of automatic quote generation. That is typical of a large number of companies having a hard time keeping up with the volume of work.
Increasingly, market forces are placing new demands on a logistics company’s capabilities and companies found wanting in their ability to meet them will be left behind. Those still using outdated logistics processes will not be able to take advantage of the revenue and profit opportunities offered by new business models and by globalization. To succeed, innovation and willingness to adopt new logistics management methods are essential and the returns on investment in such solutions are many.
Companies that dominate the market do so by reinvesting heavily in technology and innovation. The potential gains from such investment can go far beyond the simple transformation of work processes to a larger organization wide makeover to newer business models that are replacing traditional methods of doing business. Though technology is a key factor, on its own it will not help transform business unless combined with the expertise, organizational culture and a commitment to innovate.
Eliminating inefficiencies and presenting customers with unprecedented services, companies can streamline business by improving customer engagement, speed, accuracy, efficiency and transparency. With far more diverse capabilities, personalized services can become a reality enabling companies to present a combination of services that are customer-specific rather than the standard ones currently offered.
Investing in technology that enables in adopting new business models will help companies develop faster and attain sustainable growth. Real-time data helps in knowing historical trends thereby anticipating and planning level of activity and resource needs. Further, analytics can help forecast the optimal solutions based on customer needs.
Indeed companies that have moved on to new business models in logistics management have recognized that the traditional view of management is too limiting and places them at a disadvantage against the competition. Approaching the entire logistics value chain holistically delivers the real value—sustainable competitive advantage.
