Using Cloud logistics ERP systems to boost efficiency in the supply chain industry

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By Admin / October 26, 2020

Shifting gears into a newer era wherein enterprises fear data authenticity could kill their logistics business, is the real 2020, as per the finding by PWC. Speculated as the storm of erratic services by some and an opportunity to conceive innovative solutions by others, logistics is foreshadowing through an exciting phase tied between the two ideologies while new-age logistics CRM systems have a firm belief in the latter.

To foster productivity in logistics, management systems should optimize your businesses by well-managed dispatch-delivery lifecycle synchronize with your warehouse and delivery vehicles and finally produce accurate updates about the route conditions and customer preferences. These are just a few of the functions that most applications in the league deliver proficiently.

However, given the complexity of the logistics tied with inventory management vertical, enterprises must look forward to addressing the below major issues in the supply chain industry. While SAP ERP solutions have been providing end to end implementation in the domain, we walk you through the top considerations.

 Tech Upheaval on the rise – Lack of Adaptability

Not all applications in the logistics ecosystem perform faultlessly. While few don’t deliver a higher degree of customization, others lag in their real-time reporting analytics. Even the most popular 3PL apps get simple functions wrong and fail to track the root cause.

Noteworthily, the focus on smart solutions will increase and so has the compatibility expectations of such logistics systems. As per The Global Trade Magazine, 98% of 3PLs believe data-driven decision making is highly essential for logistics tasking and that enterprises must look forward to unlatching Big Data capabilities in the IoT sphere.

However, the unwillingness to divorce from outdated CRM systems as the proposed replacements are difficult to use is a significant roadblock in the rate of adoption. This further leads to delayed derivations and inaccurate insights into the company’s performance metric KPIs.

Addressing such graving challenges, modern solutions must empower the logistics consultants to identify key problem areas in the moment, ensure complete data and make valid assumptions. Henceforth the need for ERP solutions for logistics is even more imperative.

 Unclear performance metrics – low performing data analytics

As per the Korn Ferry study, 61% of shippers and 34% 3PLs expressed their concerns over feeble attempts to address complexities in data sharing. Add to it late payments and not renewing the contracts in time are a few other symptoms of poor data processing techniques. Consequentially, the business process suffers resulting in poor productivity.

To combat such unclear performance metrics, modern systems must not forget that productivity is the key agenda. Therefore, updated data sets such as the travel time, orders in the queue/completed; the number of shipments, fixed and variable costing, service reliability and the inventory status should be available to the logistics consultants on demand.

As an essential function in the logistics, Proof of Delivery (POD) metrics greatly impact the authenticity of the delivery data. Since most 3PLs have been ignoring this essential function of logistics, CRM systems in 2020 must facilitate delivery lifecycle reporting including the POD. Therefore,

  • Downloadable POD status images in real-time
  • Automated status updates on the shipments
  • Track prompt delivery status in any web browser

 Increased Transportation Hassle 

Capgemini’s 2017 study of Global Logistics Outsourcing had warned about the rising concerns over uncontrollable transportation costs wherein 63% of enterprises wanted an immediate solution.

Back then, escalated surcharges on fuel prices had directly added the freight rates and tumbled the transportation business. In 2020, sadly, the scene is no better, and rising fuel prices top the list of graving challenges in the logistics industry.

As per the same study, increased transportation costs (77%) and logistics network disruptions (76%) continue to toughen the transportation business. Up from 63% in 2013, network disruptions are a direct hint at the poor quality of logistics CRM systems in place. Although 64% of 3PLs believe natural disasters and extreme weather conditions do contribute, lack of autonomous tracking worsens the scenario.

Incorporating autonomous vehicular tracking using AI-enabled device communication; logistics systems must enable the team to fetch the best possible route to cut transportation costs. Add to it evaluating road conditions and predicting weather conditions help makes smarter decisions.

 The road ahead,
Soaring delivery expectations – booming e-commerce 

According to Armstrong & Associates, the demand for global logistics services had grown exponentially from USD 804 billion in 2016 to USD 869 billion in 2017. Fast-forwarding to 2020, these innovations to scale up productivity in the industry thrive on consistent communication between the teams and thus product management and so on, the Korn Ferry study comes with a silver lining in the cloud. 89% of shippers have benefitted from reduced costing and respond to the customer more efficiently.

 Heavy influence from the e-commerce industry has enabled the 3PLs to double their growth and offer higher degrees of reliability. As the pressure on freight capacity increases, shippers must resolve these challenges. Is this the right time to adopt AI in logistics? Certainly Yes.