Logistics is a performance business. The successful management of goods in transit can be benchmarked with clear targets such as speed, cost, and accuracy.
However, as global supply chains become more complex and the pressures created by shifting demands in both the B2B and B2C spaces increase, consistently delivering on these metrics has become more complicated.
To keep pace with capacity demands and navigate the considerable disruptions that have affected the industry over the last two years, logistics providers must act fast to improve the productivity and efficiency of their operations.
Many believe that increasing digital capabilities and practices is the way ahead for the logistics industry. Digital transformations have been ongoing for some time, but the constant and unpredictable pressures that have been placed on the industry more recently, have accelerated the need for faster and more lasting implementations.
To explore this further, in partnership with Reuters Events we recently surveyed more than 480 logistics and supply chain professionals from around the world. Our objective was to find out how logistics companies think about and drive productivity across their operations, along with the crucial role that technology plays in achieving this.
Key research takeaways:
Lacking measurements for productivity makes building a business case for investment difficult.
Understanding what productivity means to business operations is key. However, more than a third (35%) of survey respondents do not measure productivity or have specific targets to benchmark success.
Despite this, it is promising that 58% of respondents say they do have a good handle on their productivity goals. Extracting greater value from processes, improving operational yield, and providing a higher quality of service to customers are all crucial to remaining competitive.
What this tells us is that for some logistics companies, there appears to be a disconnect between highlighting the overall importance of productivity and setting measurable, tangible targets.
The pandemic has driven a transition towards “value over cost” sentiments for some aspects of logistics operations.
When it comes to the desired outcomes of improved productivity, better customer service and increased operational efficiency were top of our respondents' list. Somewhat surprisingly, more traditional metrics such as increased operational throughput, increased revenue and increased profit rated slightly lower.
Whilst they are obviously still important, this does highlight a potential mindset shift away from historically popular financial metrics of success to more customer and employee orientated targets.
It may be too early to understand the full extent of this shift and of course, this does not imply that revenue and profit are not still high priorities. However, there is no denying the pandemic has driven a transition towards “value over cost” sentiments for some aspects of logistics and supply chain operations.
Technology is now considered a key driver of productivity, automating manual processes and freeing up staff to do higher value work.
When considering what will have the biggest potential impact on their productivity, investment in technology (45%) rates highest, followed by investment in process improvements (34%).
If we look in more detail at investment in technology, automation of manual tasks and real-time visibility are two outcomes that respondents said were their main priorities, and would have the most impact on their organization’s productivity.
Clearly, logistics is a process-driven industry. Every day, tasks are being repeated over and over – with varying degrees of manual or expert input. Eliminating labor-intensive, repetitive, error-prone activities is the best option, and automating and accelerating such tasks will yield immediate and significant opportunities.
The benefits of freeing up staff via an automated system with real-time visibility are multifold. Not only can it enable staff in all locations to complete more work, in a more efficient and timely manner, but it also provides more time for staff to focus on those parts of their role which simply cannot be automated – like strategic planning, collaboration and innovation.
A single logistics platform that draws on multiple data streams from multiple parties can enhance visibility and help track and realize productivity goals.
For one in two respondents (58%), relying on multiple, disconnected systems across trading partners was a challenge to improving data management and productivity.
Couple this with concerns around connectivity and data sharing willingness with partners (34%), and a lack of centralization across systems (23%), and it becomes clear that some businesses are struggling with collecting and utilizing their data effectively across their network.
In a way, this is probably not hugely surprising, given how time-intensive manually entering and transferring data between different software systems can be. The potential for error increases every time information is re-keyed – especially when you are facing language, legal and localization differences.
Without real-time and accurate clarity of their operations, it is unlikely that logistics providers will be able to consistently hit their productivity metrics or service expectations, let alone add more to their suite of offerings for customers.
Using a single, integrated system means everyone can be working from the same database, so information that is entered at the origin station becomes immediately available to the destination as well. This can accelerate operational efficiency and reduces the likelihood of errors from re-entering data. It can also keep the buyer and supplier informed of the cargo status, enabling better collaboration between all parties.
As demand continues to skyrocket, so do constraints on time, money and resources. With the right investment in the right technology, you can unlock new productivity gains and meet your customers’ needs now and in the future.
Want to learn more about the link between technology and productivity? Download the report now
A total of 488 logistics and supply chain professionals from around the world were surveyed between January and February 2022 for this report. Respondents were from North America (48%), followed by Europe (33%) and Asia Pacific (19%). Their responses – analyzed anonymously – represent what these industry representatives consider to be some of the biggest challenges and opportunities facing logistics operations at this time.
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