Time to get the basics right

Is logistics heading towards its final destination?

In this digitally enabled world, it’s easy to be distracted by the wealth of technology now available. Mobile apps and devices are transforming the nature of logistics, for example, with devices now being used to track consignments, plan and monitor routes. Features from identifying gas station locations to directly updating customers are becoming part and parcel of the logistical journey.

It would be trite to suggest that such capabilities are inadequate, as they quite clearly bring a great deal of value. For example, a local business with which I am familiar has improved visibility on its delivery team, to the extent that it can respond better to customer complaints. On one occasion, mobile technology proved that a driver was driving under the speed limit through a village, when a complainant said he was not.

At the same time however, the features mobile apps currently provide are largely aimed at the logistical process itself – as if it existed in isolation from what was being delivered, and more importantly, why. The transportation of goods has traditionally been considered independently, largely because it is so manually intensive and, in itself, complicated.

As technology advances however, this, more isolated nature of logistics is changing. A simple, yet profound example is the click-and-collect service, in which a retailer offers delivery of an online purchase to a location of choice – a shop or an affiliated delivery point. It’s a great idea, making for a significantly improved customer experience — if it works. If it does not, the dream can quickly turn to nightmare.

The key to success (or indeed, failure) is the ability to transmit clear information between the two most important components in the chain: the consignment, and its planned recipient — this could be a retail customer or, in the B2B case of spares management chain, a field engineer.

Mobile devices remain a very important element, as they offer a window onto the logistical world. For this window to operate effectively however, back-end systems and tools (such as inventory systems, maintenance schedules and sales databases) need to exchange information in a fashion that appears seamless. No room exists for doubt, when it comes to whether a delivery has taken place.

This may sound obvious, but it is not yet always the case. In one, anecdotal click-and-collect example, a customer went to a store to pick up a package, only to find it had already been returned due to a mismatch of delivery records. On another occasion, an order was cancelled as the product was no longer available, without updating the customer – who only found out when they arrived to collect it.

Logistics simply cannot afford to make errors such as these, as they jeopardise its very rationale. On the upside, get things right and a number of new opportunities emerge — not least to differentiate the business in both B2C and B2B markets, but also to extend product ranges and squeeze that all-important operational efficiency.

The threat is that incumbent logistics organisations may not have forever to get things right. Consider Uber: while it, and its competitors, have significantly disrupted taxi and private hire services, the company’s valuation is based on its potential as a delivery mechanism for all forms of physical delivery.

“Uber isn’t valued at more than $50 billion because it’s a ‘taxi app’” explains Adrian Gonzalez, president of supply chain consulting firm Adelante SCM, but because, “Investors see Uber as a logistics company.”

Despite such topics as 3D printing, self-driving vehicles and flying drones threatening to impact the delivery and receipt of products, these remain early days for logistics – and furthermore, the data integration points with other systems will remain the same, however a delivery takes place.

So, this is certainly not the time to paint any disaster scenario. Rather, it is the right moment to get the basics of offering an integrated service right, in the knowledge that whatever comes in the future, it will only grow in importance.

 

2 Responses to “Is logistics heading towards its final destination?”

  1. In B2B the implementation of mobile technologies that improve the logistics are not as developed as B2C IMHO. (At least this is the case where I live).

    For some reason businesses don’t want to board the new technology bandwagon just yet.