Digitalisation is progressing inexorably and is changing the structure of many companies and industries. The logistics sector, for example, has long been considered a pioneer, using technology early on to optimise transport and supply chains. Nevertheless, many companies are still reluctant to use digital products and are not digitising their supply chains. According to a study by logistics expert Hermes (2019), many company decision-makers (77%) see the digitalisation of the supply chain as a key success factor that holds enormous potential for optimisation. The Singapore government, for example, estimates that an intelligent supply chain could save the domestic logistics industry USD 56 million per year and trigger enormous productivity gains. But why is it that many companies are reluctant to switch to a digital supply chain?
Supply chains offer great potential for optimisation
Firstly, the Hermes survey shows that most companies correctly assess and have recognised the economic benefits of digitalisation for the supply chain. However, while digital technologies are already standard in other industries, many logistics companies are still reluctant to put their hands on their supply chain and utilise digital tools. Transport managers often lack the necessary technical knowledge. What they fail to realise: Digital technologies in particular offer many opportunities to improve the supply chain and resolve problems.
Real-time monitoring provides a complete overview of the supply chain
Real-time monitoring for sensitive products is a good example of this and shows the benefits of monitoring temperature, humidity, inclination and impact and networking partners within the supply chain. For example, if a company needs a certain component from China for its production, it will find out when the product is dispatched from China and when it is due to arrive at its destination according to the usual transport procedure, but the company will not know what happens during transport and what conditions the component is exposed to. Perhaps there is stormy weather during sea transport or the goods were exposed to excessive heat and were damaged as a result. The company does not receive any of this information or only receives it when it is too late and the component is damaged. This in turn delays the company's own production. This results in a lot of lost time and high costs that could be avoided.
Enormous cost savings through transparency and fast response times
In a digitalised supply chain and with the use of monitoring systems, such damage would be prevented and delays avoided. By using transport trackers, logistics managers could react quickly to risks and events that occur in the supply chain and prevent transport damage. With real-time tracking, for example, the recipient knows at all times where and in what status their delivery is and when they can expect to receive the ordered component. They can track the route of the ship or lorry via a cloud application and are informed immediately if there are any delays so that they can adjust their production accordingly.
Sensors in containers, for example, sound an alarm if the temperature exceeds a certain limit. This lets the recipient know that the component or goods have become too warm and are likely to be damaged. Real-time tracking also means that no further data transfer is required between the sender and recipient, as all data is available in the cloud and can be retrieved at any time. This saves an enormous amount of time. In addition, real-time data can also be used to analyse weak points in the supply chain in order to identify problematic logistics partners. When the product arrives at its destination, the sender automatically receives a digital confirmation of receipt. Thanks to the direct connection of the real-time logger, the data flows automatically into the ERP system, on the basis of which the invoice can then be created. The use of real-time monitoring products in the supply chain can also have a positive impact on insurance premiums by demonstrating that transport damages have been effectively reduced, which in turn could lead to a reduction in the excess.
Real-time tracking provides transparency
In order to create transparency across the entire supply chain, companies face a number of challenges. By using real-time trackers, logistics managers gain knowledge of the actual transport conditions under which the cargo is transported during the journey. Monitoring systems thus make a significant contribution to reducing damage. With up-to-date data, supply chain managers can gain the necessary insights to minimise current losses, prevent similar damage in the future and thus ensure transparency in the supply chain. You can also find more information about smart logistics here in our shop. We would also be happy to advise you on real-time data loggers and how they can be used to digitalise the supply chain. Simply book a free consultation appointment via our booking tool.