Digitisation: The future of supply chains.
Why control over information is the key to future success.
Owning the supply chain will make you own the value chain
Before I dove into the exiting and adventurous world of logistics, I worked as a designer and strategy consultant. I worked as a marketing expert and sales manager. I positioned brands and placed products on the market. I worked in different industries, such as for financial institutions or providers of scientific equipment.
We know that marketing and communication lead to traction and customer interest. However, I realised that marketing can be as good as you want, but if you can’t deliver your products when and where your clients expect them, the customer experience deteriorates significantly. Customers then often chose another supplier and shopping platform. Logistics is therefore one of the most important parts of your value chain because this directly affects your customers’ satisfaction.
Always keep your promise
If you want to offer a perfect service and the shipped goods cannot be delivered in time, your clients won’t trust you. You must always keep your promises.
This is true for all supply and logistics chains, inbound and outbound, and for all industries, such as automotive, print media, spare parts or fast-moving consumer products. If you’re able to control the supply chain, you satisfy your customer.
I’ve understood this more thoroughly since I’ve been working on Evertracker, a technology platform that combines the Internet of Things and Artificial Intelligence to provide seamless visibility and process automation. Our aim is to provide a communications platform and process automation that give the control over the supply chain, and therefore also over the entire value chain, to our clients.
At the beginning, we offered an easy track-and-trace solution but understood very quickly that we needed to turn to a process automation platform as the express needs of the clients were more related to a future vision of the supply chain. Our clients wanted to gain control over their processes. They didn’t just want visibility, they wanted to use the gathered data to integrate our solution into their daily work in order to automate certain events, such as scans, pickups or invoicing.
Digitisation is the future
Our early adopters believe that it is not hardware that will change the logistics market but the entire digitisation of their supply chain, as this is the only way to automate their processes. Our clients are certain that the logistics market will completely change. Whereas until recently, logistics providers planned, organised, handled and controlled the shipping processes, today they are more and more reduced to the transport process. E-commerce platforms as well as the industry itself have chosen the best possible provider and control the process by putting pressure on logistics companies. For our clients as well as for many others, information and the control over the gathered information is the key to future success.
You can decide
Large parts of the value chain are related to logistics. For most companies, controlling the entire value chain is the key is to taking the final step and take control over the supply chains. Customers as well as suppliers must fully trust their logistics partners. To gain the required control over the supply chain, you can either build up your own stock, put pressure on your partners or digitise processes.
As building up stocks is against the lean management approach which has been driving the efficiency and cost reduction of the past few years, pressure or digitisation are the only options remaining.
If you want to get control over the processes by putting pressure on your suppliers and logistics partners, you must have significant market power. This isn’t always that easy as the competition is fighting against this market power. Furthermore, once you have achieved this strong position, you must maintain it while at the same time remaining dependent on your partners. In addition, pressure usually leads to a drop in quality.
You can also digitise your supply chain and integrate it into the processes along the entire value chain. Digital products are already available on the market that enable you to cost-efficiently integrate new procedures into your value chain. Today’s technologies around IoT enable you to constantly gather data on your processes, especially when you have no visibility. In combination with Artificial Intelligence, you can use this data to optimise and, above all, to automate processes. This leads to a high degree of transparency of all processes and makes them more efficient. This, in turn, results in greater control over the value chain and therefore enables you to focus even more on your customers.
Satisfy your clients
As I described in my blog, flexibility and focusing on your clients will enable you to satisfy them. This will bind them to your company as you can keep a promise that you make.
As competition is rising and globalisation is putting even more pressure on all markets, keeping this promise means that you must be able to fully rely on your inbound and outbound logistics. You must understand your customers more than ever before. You must adapt to the changing needs with ease and you must make sure that processes work seamlessly. This applies both to consumer as well as to B2B products.
Think about it yourself in your personal life: buying a product online is second nature today. The frustration starts when the packages take longer than estimated to arrive or when they cannot be delivered to you personally. In the end, the shopping experience deteriorates and you will go to another e-commerce platform for your next shopping trip.
Today, it is easier than ever before to get access to digital products that increase your efficiency. So the question isn’t when the control of logistics processes is taken over, but rather who will take it over?
Will it be the logistics company that can the offer a better service to their clients, such as automotive companies or e-commerce platforms, or will it be the automotive company or the e-commerce platform that owns the supply chain and therefore the entire value chain?
If logistics companies are making the effort today to rethink their business models and invest in the future of logistics, then they will be able to maintain their strong and important role within supply chains.
However, if the customers of logistics providers use digitisation to gain full access to the process chain, it will be fully owned and controlled by them. This will mean that logistics companies will be reduced to box-pushers still owning physical assets, such as trucks, while the platform technology of the manufacturer will handle, organise and control the processes. Logistics companies were the experts, but will they be able to maintain their strong position, because the added value that these companies bring to the value chain will then be managed by a software solution?
Today, we give our clients control over their processes and provide automation along their value chain. Our customers not only reduce costs, but, in particular, they increase transparency and their satisfaction. Our software automates processes which helps them to become more efficient.
Logistics is facing dramatic changes. Cities are reaching their limits, parcel deliveries lead to consumer dissatisfaction, just-in-time deliveries for manufactures aren’t efficiently planned. The increase in competition leads to tremendous price drops which, in turn, lead to a significant decrease in quality.
If companies want to succeed in the future, they must start to optimise and digitise processes along their value chain.