Dec 1, 2020 | Industry
Whether you're a freight forwarder, a 3PL (third party logistics), or another logistics company, you know that the right logistics system is a must to streamline operations, improve supply chain visibility, and enhance ROI.
As noted by recent survey data , these are top priorities for logistics organizations:
The challenge? Legacy supply chain management systems often lack the flexibility and functionality to deliver on these priorities, putting companies in the difficult position of doing more even as legacy systems offer less. It's like paddling upstream - with a broken paddle!
With market conditions rapidly changing thanks to evolving pandemic pressures and supply chain shifts, it's more critical than ever for companies to consider new technologies capable of delivering on-demand results and driving smarter logistics strategy. In this article, we break down the top logistics challenges of legacy tools and dive into the top three ways the right logistics system can help drive sustained supply chain success.
As noted by Supply and Demand Chain Executive , disruptions caused by COVID-19 concerns have caused logistics firms to prioritize new processes around localizing stock, boosting operational visibility, and optimizing the stock they have on-hand to maximize profitability.
Here, spreadsheets and legacy solutions simply can't keep up. Some of the biggest issues include:
Lack of automation
Legacy systems often form the core of original logistics management within an organization. While they may have been cutting-edge for their time, they typically lack the advantages that come with new technologies, such as automation. Today, automated processes offer a critical benefit for logistics providers looking to manage increasingly complex warehouse and logistics activities and inventories across multiple sites simultaneously.
Many legacy tools don't work well with new solutions, such as cloud-connected enterprise resource planning (ERP) offerings or real-time data collection systems. If your warehouse management system doesn't talk to your supply chain management system, then your logistics operations are at a major disadvantage. IT teams at logistics firms often spend more time trying to solve internal business logistics conflicts than improving operational performance. This is a supply chain efficiency killer.
No cloud connection
Logistics and supply chain frameworks are moving to the cloud. It makes sense since cloud providers offer on-demand compute and storage solutions to streamline inventory management and distribution operations. The problem? Many legacy solutions were never designed to work with the cloud, forcing companies to either create potentially unreliable workarounds or run two systems - one in the cloud and one on-premises - simultaneously.
Can't keep pace
The sheer volume and variety of logistics data require tools capable of keeping pace. Next-generation systems are designed with these data deliverables in mind, while spreadsheets and legacy systems have finite upper limits when it comes to speed, security, and accuracy. From auto-replenishment to space optimization and intelligent routing, logistics management systems have come a long way. What's more, as these systems approach their maximum capabilities their performance often suffers, leaving users frustrated as even simple processes require substantial time to complete. Timely delivery of finished goods is what it's all about - and enabling technology is a must for today's tech-savvy logistics managers.
Here's why: Legacy warehouse management software, logistics systems and old school spreadsheets weren't designed for users, but for utility. As a result, most companies still using these solutions have put time and effort into training specific staff members to understand the inner workings of these systems - but as these employees retire or move on to other opportunities, legacy solutions become increasingly inaccessible.
To be effective, a logistics management system must put the user experience first with features including self-service tracking and visibility along with real-time updates and push notifications. In effect, these new systems recognize the market shift away from centralized logistics frameworks to mobile-enabled, user-friendly functions at scale.
Manual errors matter. Even small mistakes in warehouse stock levels, order picking, freight dimensions, or ongoing availability can have significant downstream consequences - companies may find themselves struggling to fill orders, track down "missing" stock, or rushing to reconcile profit and revenue data.
The most common culprits? Physical information storage and exchange methods such as paper spreadsheets, phone calls, or faxes. By replacing these familiar - but often flawed - processes with automated and electronic data storage and exchange, logistics firms can significantly reduce overall error rates and increase operational output.
Logistics systems are designed to cut overall costs by streamlining the collection of data and its application across the supply chain process, from warehouses and distribution centers to freight brokers, shippers, and more. The problem? As legacy tools age, they often end up costing more to maintain than they save by handling logistics data.
The right logistics system can help limit total spending by reducing the amount of time it takes for staff to complete key inbound and outbound shipment processes and minimizing the potential for error. By automating processes such as inventory data entry and manifest management, these tools free up time for staff to tackle higher-priority warehousing and back-office tasks. Advanced systems can also help detect and eliminate duplicate data, in turn saving workers from spending time and companies from spending money to track down the source of these double data entry errors.
The logistics landscape is changing. From the steady shift toward digital-first initiatives and the disruptive push provided by pandemic pressures, spreadsheets and legacy systems can no longer keep up. To streamline operations, reduce complexity, and drive sustainable ROI, companies are best served by the implementation of advanced logistics systems capable of simultaneously increasing customer satisfaction, reducing error rates, and boosting productivity.
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