How to Digitize Logistics Operations

Rescue Supply Chain Management from the Chains of Legacy.

The Motivation

Digital transformation is a cathartic effort for any participant in the conventional freight industry. Aim is to steer the running of your company in the new ways of working (Industry 4.0), that is for faster, cheaper,  scalable, digital, transparent, compatible, user-friendly and eco-friendly business by investing in tools to enable and mount your processes. Start with thinking through the necessary change and the vision for that  change.

In this article, you will find actionable advice, props and traffic lights for
the SME’s to bring Digital to their operations (Small to Mid-size
transformErs 🙂 ).

Start with the Clear Objective – to improve on the pressing sides – be it processes, costs,
customers, forward porting capabilities, integration with partners, and
then loop-back to processes (already a bit better)- costs… turns into
virtuous cycle.

Have a ‘Process view’ – this is a process driven industry, so have a process
flow/map and a general setup of your operation or an org chart (typical
production run, delivery cycle, an important chunk, a process steps you have in your
operation) use simple and straightforward visuals, with intuitive details
so you plan your project and discuss progress in broader terms.

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Legacy starting point – the catch of the story! Candidate transformants
have to either

(1) overhaul heavy monolithic apps, which is often an innovation project
in its own glory, or

(2) start upgrading, streamlining and simplifying a collection of disparate
tools. The (good) part to being left behind (and that’s for the bulk of the
industry), is that one needs to catch up jumping stairs. An awakening and
an intense call that’s also very coercive.

To boot, firms need to resolve for the journey and stick to it. Drifting and
leeways are simply not worth it. Supply chain as a service function, and
integrated with the rest of operations – materials, production, sales and
marketing. Managing Supply Chain has turned from a dead-end cost
burden, to cost plus, to now a fairly manageable prot centre and a fresh
source of optimization, innovation and products design.

The Benefits from the Digital
Transformation

Cost benefits – most important and relatively tangible and estimable,
assuming you implement right the rst time with no reworks and
rollbacks. New ways of workings i.e. getting more digital is a compelling
opex vs capex case. Just be sure, not all upfront cost and TCO are readily
evident on vendors’ playbooks.

Efficiency gains, productivity improvements, streamline of operations –
this would be specific for your organization and again, mostly touching
processes, then culture and ultimately net results. Clichés to the side, a
transformation project (water and stones pic) that helps get to terms with valid and actionable
performance and efciency metrics even only during the discovery phase is an inspiring effort in legacy cleanup, and worth it on all sides.

Tools and solutioning modernization – you should step lightly here on a
mix of intuition, experience and analysis. Be practical, unassuming and
have a feel for the products, systems and platforms you need. As a thought experiment, map them out on your core functions – sales and
marketing, operations, customer service, nance. How will that change
your day? Trial as much as you can afford (in time), get as much consulting
as you can stand. Have a shortlist and reiterate.

Think hard: do you need a niche, e.g. a CRM-only product to prove the
concept and start off, or do you need a more comprehensive ERP-like
systems with integrated modules say sales, marketing account
management, all the way to accounting, reports and analytics. Can you
put on just some of the all-ERP, and later add more if working. In a separate
article, we will share how to do product selection (bidding dynamics,
integration, interplays).

Fringe benets of the digital transformation, the intangibles:

• you can make news (PR, technology is always newsworthy),
• shipshape your branding as employer (hiring power), partner your
  vendor will promote (and vice versa), and even get a rebate as a reference case
• your customers perception and awareness get a slick upgrade

To second check, Logistics trade publications don’t tell stories so much in
terms of ‘captains of industry’ anymore. They report them for the Digital.
This new storytelling is a lot more useful, practical, inspirational.

Your Digital Project in Practical Steps. The Flash Cards.

Timeline – lay out phases and next steps (and stops). Be involved in, have
control and react . This is to communicate and bold-underline priority and
commitment.

Have Quick Wins to signal new ways make progress and motivate the
immediate contacts. The quickest wins are easiest – those are on the
operations side. The earlier the better.

Focus on practical use cases and understandable metrics to ag
improvement:

• Lower processing time with fewer errors, and quick search of
  documents, (shipment, warehouse turnaround/putaway volume,
  order fulllment, quote response time)
• Transparent, auditable, manageable processes – timestamps, users,
  events, documentation, system messaging, order/shipment/account
  level P&L
• Automated notication for updates of services, rates, terms,
  regulations, industry content, upgrades, etc. details
• Integrated quotes -> order booking -> documentation -> invoice cycle

Separate the grain for the chaff.

Don’t get bogged or adrift on terminology – be it agile, scrum,
Kanban, kaizen, process re-engineering, RPA, agentic, etc. These concepts are all part
of the play but not essential. Have your vendor to commit the real stuff,
i.e. what needs to be done by when, and then make sure they stand out
through implementation and delivery. Is this not what you, in turn, do for your
customers?

Prepare mentally and emotionally

Be prapared for the psychological strain during the change ( “Qual der
Wahl” /Torment of Choice classic), the push back from staff, the running
business inertia, the false sense of equilibrium we all prefer not to shake for comfort.
And still, we cannot help the appreciating and encouraging grin to your
daring mentality, overcoming attitude, and commitment to move on. If
you gave it the hard thought, it should be time.

Finally, don’t overanalyze and don’t overwork. Perfect is enemy of done.
As with most transformative growth, this should be, in essence, a value
play. Brace for the innevitable black screens, error codes and untoward
menus. Not so much plain wrong, but unfamiliar. They are part of the
journey. When you drag through to brighter days, it will add up and get
seen through.

Courage and Luck with Your Digital Transformation Journey!

Dintro.info, a Magaya partner, is a supply chain systems
consultancy, helping shipping, freight forwarding and logistics companies
with sales and operations, systems and processes.