The way in which we handle the purchase and sale of services and products has changed considerably in recent years. Especially the restrictions and extraordinary circumstances caused by COVID-19 have clearly shown in many places what a complex, scalable and resilient logistics infrastructure has been developed parallel to that of stationary trade to satisfy our needs as consumers.
The purchasing behaviour and the expectations we have of a retailer or supplier in this context have of course changed just as significantly. When we buy something, at least most of us want to have it at home as soon as possible. We often only want to wait in an exceptional case. You can imagine that these expectations pose one or two challenges for logistics. For many consumers, however, the processes that enable next-day or even same-day delivery are not really visible. And if they do, then only to a limited extent.
Online retailers offering same-day delivery must ensure that their logistics and warehousing operations have implemented goal-oriented processes and tools. Processes such as inventory, purchasing, order administration, picking, delivery and others should be automated whenever possible. Otherwise, fulfillment becomes critical.
How logistics has evolved
Logistics deals with the planning, control, optimization and implementation of, among other things, flows of goods and information. There's also quite a lot of research that is being done in professional sciences. The aim is always to ensure that
- the right good,
- in the right amount,
- in the right condition,
- in the right place,
- at the right time,
- for the right customer and
- is available at the right cost.
In order to get goods from A to B, we have seen various innovations in transport. From simple carts and non-motorized boats, steam trains to cargo ships, trucks, aircrafts and drones. Thanks to these transport vehicles, we are now able to deliver goods more or less cost-efficiently to practically every corner of the world. As far as the flow of information is concerned, we have obviously also made good progress. I mean you're reading this blog article thanks to one of the most fascinating innovations in this context - the Internet. With the Internet, the cost of distributing information has moved close to zero, and the Internet's interfaces with the complex logistics infrastructures around the world are causing e-commerce to boom. Compared to the Internet, however, logistics has much more friction and unnecessary inefficiencies, which means that logistics companies have room for optimization. A modern, holistic process design plays a central role in this journey for optimization.
We need to find innovative ways to reduce costs and increase the throughput of warehouses. Traditional warehouses are often well organized. However, they often reach their limits and are therefore no longer really suited to cope with today's volumes and requirements. What we need are partially or fully autonomous warehouses that can be productive 24/7 and without classic shift operation. This gives us a completely different quality of flexibility and opportunities to optimize output.
Types of logistics
Sub-areas of logistics, which offer all potential for increasing efficiency, include in particular
- Procurement logistics
- Warehouse logistics
- Production logistics
- Transport logistics
- Spare parts logistics
- Maintenance logistics
- Distribution logistics
- Waste disposal logistics
- Information logistics
Inventory management; a hard nut to crack
To keep customers satisfied and improve customer retention, retailers must have enough products in stock or at least be able to stock up as quickly as possible. That's also why in recent years, global inventories have increased significantly, despite the additional pressure on costs, picking and packing to meet deadlines, and on shippers to deliver packages in ever shorter time frames. However, the upside that can be realized in this context, at least for the big players, compensates in many cases for the increased expenses. This is actually not really surprising when we consider that the acquisition of new customers is a large chunk of any budget.
A new era: E-Commerce
As mentioned at the beginning, the current extraordinary situation around the globe has led to major structural changes. Retail markets are in decline in many places, while e-commerce is flourishing and sales at individual retailers are more than twice as high as usual. This is most likely due to the marked change in behaviour during the period of social distancing. It remains to be seen how this will behave after a «normalization».
But even beyond these special times, e-commerce has gained considerable traction and the increased push towards e-commerce in recent months has only made it more obvious than ever that the continuous rise in demand is leading to difficulties in meeting it, proving that companies need to implement technologies to automate their logistics processes. This insight becomes even clearer when we consider that e-commerce sales currently account for only about 12% of global retail sales.
Automation in logistics
Logistics automation refers to the use of control systems, machines or software to improve operational efficiency. The term is open per se, broadly comprehensive and refers to all functions that are performed at the technological level.
Processes along the supply chain, including procurement, distribution, customer service and reverse logistics, are among the many processes that can or must be automated in a warehouse or distribution center. The problems described above should make it clear that e-commerce and automation must be optimally coordinated. After all, one cannot really develop, cannot really mature without the other. Automation is therefore absolutely essential in order to successfully scale e-commerce further.
For CEOs, automation in logistics has become a high priority due to the increasing shortage of labour, the growing demand from online retailers and technological progress. This is because warehouse and office workers can work more closely and profitably with different technologies, reducing their workload and creating added value for the company. Machine learning-based systems are the central and increasingly important sparring partners in this context. Their ability to cope extremely well with complexity and to make it more accessible to us is one of the various unique selling points that make them so meaningful. In many areas of logistics, interesting and significant process innovations can be expected from the increased use of such technologies.
Intelligent Document Capture to promote automation
Today, machine learning technologies are used very pragmatically, for example in document extraction. Because in logistics there are many documents to pass, check and approve. These include invoices, orders, bills of lading, certificates and customs documents. Typically, long tables with information about all shipped goods such as item description, quantity, unit price, tax rate, etc. have to be entered into a leading system. Doing all this manually would take hours or even days. By automating this document data entry work with machine learning-based OCR software, it is instead possible to extract the same amount of data in just a few seconds. This helps to significantly improve document handling efficiency, make downstream process automation more fluid and robust, and simplify customs compliance.
Through this automation-driven optimization of logistics, goods movements can be tracked more transparently at a higher level and inventory management can be fully integrated by the companies' ERP systems. This results in greater organizational control over all company-relevant resources. In addition, companies have near real-time access to data streams, which enables targeted and timely interventions or is also a significant advantage purely for reporting, as the management can make better decisions based on relevant data more quickly. The ability to extract more errors from processes, easily scale implementations and build up more speed in workflows are additional constructive effects that can bring decisive advantages to a logistics company.
So, Parashift provides you with a key element for the transformation to a top modern and efficient logistics company with the versatile Parashift Platform, which enables you and your team to generate a large impact with relatively little effort, leading to more efficiency and agility in your logistics processes.
That's why you should now make use of this chance and register now for a free 14-day test account and contact one of our specialists for a first assessment of possible solutions. We look forward to getting to know you!