Benefits of automation and digitization in supply chain management and logistics
Automation is changing everything, from means of transporting products to warehousing operations, and assisting employees throughout the supply chain.
Data-based decisions are key to increasing asset utilization, improving efficiency and reducing supply chain volatility. As a result, the role of data and the need to capture and transmit information continues to increase.
Big data shows the most potential in the supply chain. Of the 3PLs participating in the survey, 41% said they were using big data analysis, compared to 25.4% of shippers.
Digitization and automation can increase efficiency, improve safety, and reduce operating costs. Shippers and 3PLs all provide similar reasons for investment.
Among shippers, the top reasons are investments to meet customer service needs and reduce operating costs. Only 4% of 3PLs and 2% of shippers said they were investing in digitization and automation to collect and analyze data even though this was an area where respondents agreed. is the most potential.
However, technology still has its costs, and the majority of respondents - 71% 3PL and 65% of shippers - are investing 0% to 5% of capital costs for digitization and automation.
Of the 3PLs, 10% are investing between 6% and 10% of digitization capital, compared to 13% of shippers. Only 3% of the two sides said they were investing 25% of their capital costs in digitization and automation.
A higher percentage of shippers - 15% - refers to a culture or non-traditional way of thinking, compared to 6% 3PL.
Other main reasons not to invest in digitization and automation include the lack of internal talent to develop, deploy and monitor; lack of dedicated resources to develop unstable or inconsistent or inconsistent digital platforms and IT infrastructure.
Rapidly changing technology has benefits, but can also create challenges. The large number of companies competing in the same space can reduce costs, but may also mean that the continuity of the service may be at risk when players give up.
Moreover, rapid progress also means that today's technologies may become outdated next year as new players increase and participate in the digital space. That could make some shippers and 3PL hesitant to invest in some technology.
Summary of the main points
Automation has the potential to improve safety and limit the impact due to human error in transportation.
Digitization can help shippers and 3PLs optimize their time, resources and labor.
Of the 3PLs, 41% said they were using big data analytics, compared to shippers' 25.4%. However, 67% of 3PL and 69% of shippers said they would invest in big data analytics in the future.
The majority of respondents - 70% of shippers and 77% 3PL - report that they are currently using core technologies in the supply chain; 68% of shippers and 64% of 3PL report that they plan to invest in supply chain technology in the future.
Investment in technology is still low with 71% 3PL and 65% of shippers reporting that they are investing between 0% and 5% of capital spending on digitization and automation.
Industry competitiveness is the leading reason that 3PL is investing in digitization and automation.
Among shippers, the main reasons they are investing is to meet customer service needs and reduce operating costs.
Only 4% of 3PLs and 2% of shippers said they were investing in digitization and automation to collect and analyze data even though this was the area where respondents were. Agree is the most potential.
A higher percentage of shippers - 15% - said a culture or non-traditional way of thinking was the reason for not investing, compared to 6% 3PL.
At Orgit, we are problem solvers, next-generation thinkers, and efficiency aficionados. Operating at both local and global scales, Orgit offers comprehensive solutions packages developed by in-house industry experts, tested against real-world scenarios, and designed for the changing supply chain. Learn more about Orgit’s solutions or get in touch with our experts today.
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