By Komal Puri | February 6, 2024
Digital Logistics Software: An Overview
Digital logistics software is a software tool that modernizes logistics and supply chain operations with digital automation. It helps businesses to move away from outdated and inefficient traditional ways of running logistics and paves the way for a more futuristic approach with an enhanced focus on efficiency, transparency and speed.
The numerous categories and subcategories within the realm of digital logistics software can be slightly overwhelming. However, with the right understanding of the landscape and an awareness of one’s own problems, an informed decision on the choice of software can be made.
Importance of Efficient Logistics Management
Efficiency has constantly and consecutively surfaced on the top #5 priorities of CXOs especially in the context of logistics. This is common across industries, geographies and businesses of all sizes. From cost of logistics operations to customer satisfaction, efficient logistics management can impact all stakeholders across the spectrum. Here are the major factors that reinstate why efficient logistics management is important.
Cost Impact - With efficient logistics management, businesses can achieve significant cost impact. This can also improve profitability. There is also the option to pass on the cost benefit to customers and offer more competitive and compelling choices.
Customer Experience - When everything is set up to run on time, businesses can deliver a great customer experience. This is key to retention and building brand loyalty.
Stakeholder Experience - The overall efficiency improves when each stakeholder in the system is efficient. This will also enable them to improve their earnings.
Scope for New Businesses & Services - With improved efficiency, businesses stand a better chance to offer new services and expand their offerings.
What is Digital Logistics Software?
Software that enables businesses to make their logistics operations efficient with automation enabling them to digitize from end-to-end. This improves transparency of operations and enables them to find gaps in their processes. This helps them take a systematic approach to managing logistics operations with a clear digital trail by streamlining digital documentation. It also sets the path for easy tracking and tracing. With this, they can take chaos out of their systems and ensure seamless execution of logistics operations.
Key Features & Capabilities
While the goals and the needs behind a digital logistics software are clearly established, let us take a look at the key capabilities and feature sets that are expected out of it. This is essential to understand because digital logistics software is a key enabler of day-to-day operations and its range of capabilities affect critical business functions.
A digital logistics software fundamentally enables businesses to switch from manual to digital with automation. This makes processes run much faster and error-free. This also helps reduce errors due to manual processes.
The system should easily integrate with existing systems and tools in place. It should blend seamlessly with the ecosystem and seamlessly plug and play. They should facilitate secure exchange of data across systems in real-time to orchestrate operations.
Managing operations centrally is a key part of digitalization. This ensures all ends of the process are tied and connected and one can manage the flow of operations centrally. This paves way to getting a 360-degree view and control of the entire process.
Centralized real-time visibility in the form of an Ops Dashboard or a Control tower view is a critical feature. This is critical to monitor operations in real-time, benchmark KPIs and take swift action when disruptions are noticed. This is helpful to uphold service levels and keep your operations flowing smoothly.
Another key feature of digital logistics software is the ability to keep a trail of documentation. This is essential for compliance and reconciliation. It also can streamline contract management, billing and invoicing.
Analytics & Insights
A key value addition is the tool’s ability to benchmark KPIs and provide insightful analytics. It should also offer customizable dashboards to configure operational metrics. This is essential to enable businesses to make data-driven decisions.
How it Improves Traditional Logistics Processes
One of the biggest challenges with traditional logistics is that it typically has a high manual dependency, This leads to a lot of errors and chaos. It also lacks an organized approach where a lot of transactions are depending on human relationships, last-minute decision making and often, compromising on the cost for meeting SLAs.
This approach on a large scale can become a major handicap and push the business far away from being efficient. This also has an implication on relationships between shippers, carriers and customers.
This also leads to slower execution of processes. When the entire length of the process consists of many stages with one depending on the other, a delay in one stage has a cascading effect on subsequent steps. This makes the entire flow much slower affecting many stakeholders.
Another pain area is reconciliation. Traditional logistics processes are not designed to streamline documentation. They are majorly paper-based and that makes it not just cumbersome but extremely challenging to track and trace when discrepancies arise.
A digital logistics software transforms traditional processes by digitalising them. The key areas of improvement that they drive for a business by making them upgrade from traditional processes are:
Faster execution of processes
Reduction of errors
Improved carrier relationships
Data-driven decision making
Benefits of Digital Logistics Software
The key benefits of digital logistics software include:
From saving paper costs to operational expenditure, the cost impact of digitalization is significant. With effective automation & planning, costs can be saved on fuel too. This also improves on-time deliveries thereby putting to better use the drivers’ time. In addition to cost savings due to varying degrees of optimization it brings about, it also boosts the customer experience which helps them stick with them. This in a way impacts customer acquisition costs too.
With improved orchestration with digital techniques, operations are run in a phased and timely fashion. This enables businesses to commit to SLAs that they can meet consistently. This builds a predictable experience not just for customers but all stakeholders in the system. This predictability of operations is key to reducing reattempts, dissatisfactory customer experiences and employee frustration. Predictability is a great goal that can also enable businesses to get out of firefighting mode and spend time on new offerings and innovations that drive growth.
Real-time Operational Control
WIth digital logistics, dispatchers and fulfillment managers can get real-time operational control over their fleet. This includes the ability to design processes that can be better controlled, resources can be tightly managed and SLAs can be maintained. Delays and disruptions can be avoided with this vigilant approach and there is a hold on operations from dispatch-to-delivery. This helps in reducing blindspots and ensuring a good track record in on-time deliveries.
Centralized visibility for managers and milestone visibility for end customers makes the entire delivery logistics process transparent. This helps in timely identification of disruptions and addresses the root of the problems rather than addressing symptoms. With real-time updates to customers, there is 100% transparency on order statuses. This builds trust for customers and clarity for managers responsible for logistics operations.
With digitalization enabling better document management and a trail of timestamps, it helps businesses achieve improved compliance.
Most modern-day digital logistics software support digital payments. This helps in ensuring that there is no ambiguity or chaos in cash handling and end-of-day reconciliation. Digital proof of delivery helps in enabling this too.
Dispatchers can leverage automation and save many hours that would be otherwise spent on manual operations. Drivers have a faster way to get out for deliveries and are better utilized. With improved transparency to customers, there are fewer WISMO calls. With the ability to schedule deliveries and securely communicate with customers, failed and reattempt delivery can be reduced too which further contributes to productivity improvement.
How Does Digital Logistics Software Work?
Modern-day digital logistics software are cloud-based which allow anytime-anywhere access to applications. They are also scalable to ensure they can handle high loads at the required speed. It is possible through end-to-end digitalization that helps identify inefficiencies.
They also seamlessly plug and play with other systems. They are built with enterprise-grade security and configurable access levels to ensure contextual information. It also supports digital payments.
Tips to Select The Right Digital Logistics Software
From point products to full serviceable suites, there is a wide range of tools available. Considering that these are fundamental tools that can impact day to day operations and customer experience, some factors are critical while selecting the right tool.
Ease of Implementation - A lot of tools involve long and expensive implementation timeframes. This is a red flag and can drain a lot of resources.
Scalability - As businesses want volumes to grow, the tool needs to be able to support it with its scalability. It is important to ensure no sluggishness or slowness is experienced as volumes grow.
Interoperability or Ease of Integrations - The tool should be able to seamlessly plug and play with existing systems.
Security - As sensitive personal information is involved, the system needs to check all the boxes when it comes to security compliances. This also includes having secure payment gateways.
Usability - From managers to drivers, the usability and ease of use of interfaces since they are largely accustomed to manual operations is essential. The tool should offer a seamless transition.
Price - The pricing of the tool fitting the needs of the organization is important. A tool that would support the unit economics of your organization should be considered.
With this perspective and understanding, businesses can make a decision on the type of digital logistics software that could live up to the needs of the organization. The many benefits and the new opportunities it could unfold for businesses make it even more compelling to adopt a tool.
Komal Puri is a seasoned professional in the logistics and supply chain industry. As the Senior Director of Marketing and a subject matter expert at FarEye, she has been instrumental in shaping the industry narrative for the past decade. Her expertise and insights have earned her numerous awards and recognition. Komal’s writings reflect her deep understanding of the industry, offering valuable insights and thought leadership.