Digitization Transformation Underway in Logistics and Transportation
Within the next five years, digital supply chain is expected to become the leading industry model. Digital implementation can help meet customers’ desires for lower prices, immediacy, and unwavering availability, which could explain why 72 percent of global companies will be investing more than $900 billion every year on digitization in the next five years
Right now, 2,000 companies are already in the process of digitizing their supply chains. Supply chain and logistics companies are using new technologies to gain end-to-end results via Big Data analytics, cybersecurity, the Internet of Things, real-time communication, automated value chains, and cloud management.
The transition to digitization is expected to bring about a 20 percent reduction in procurement costs, a 50 percent decrease in supply chain process costs, and a revenue boost of 10 percent. It also allows third-party logistics providers to lend transparency to their customer relationships and optimize solutions for greater safety and efficiency.
Keeping Up with the Competition
A recent third-party logistics study revealed that 62 percent of third-party logistics providers and 57 percent of shippers make investments into digitization in order to be more competitive. Nearly 80 percent of 3PLs agree that when a shipper fails to provide thorough, accurate and reliable information, timely execution is directly affected. Meanwhile, 65 percent of transportation and logistics firms believe in getting a two-year return on investment.
Despite the many advantages that digitization can bring, not all firms are on board with this transition. One of the biggest barriers for many transportation and logistics company is a lack of training to integrate. Data privacy and security concerns are another issue that needs to be sorted out, while the high investment required is also an obstacle for some companies.
As Industry 4.0 continues to transform supply chain and logistics, those companies that can successfully pull off the transformation to a digitized supply chain ecosystem stand to benefit greatly.
This blog post was based off of an article from Morai Logistics. View the original here.