Digitalization is no longer a trend but an urgent need in almost any field. New technologies not only help to facilitate work but also adapt businesses to new realities and modern market requirements. But why exactly change the established processes and transfer an entire industry to digital? Pavel Lisitsin, the head of a large logistics company, answered this question in detail.
Why is digitalization of logistics a must? Pavel Lisitsin explains
No matter how conservative a certain sphere is, today digitalization is a mandatory requirement. Pavel Lisitsin emphasizes that companies that manually process orders, record and control processes using traditional management simply cannot compete in terms of speed and quality of problem solving with those who use new technologies. The same applies to the prices of services, since the digitalization can significantly reduce unnecessary costs and, accordingly, offer customers more favourable prices.
Pavel Lisitsin explains what specific tasks of the logistics business can be solved using modern technologies:
- automation of building routes and graphs;
- simplification of reporting and workflow;
- control over the work of employees and contractors;
- reducing the workload of managers by automating routine tasks;
- reduction of risks (due to the transparency of work, the movement of goods is easier to control, thefts are excluded);
- reducing the influence of the human factor on work processes;
- simplified and more efficient warehouse management;
- opportunity to offer new services to clients.
How does it all look in practice? Pavel Lisitsin gives a standard example: transportation of goods by road from one point to another is too expensive and it is necessary to reduce costs. What can be done in this case with the help of digitalization?
Pavel Lisitsin says that first of all, you can automatically build an optimal route, as well as track traffic in real time. Next, transfer the workflow to digital mode to not waste time fiddling with papers. The automatic warehouse management system will simplify the process of order collecting and unloading/loading, and the fuel control system in cars will eliminate thefts. As a result, Pavel Lisitsin explains, the delivery time will be reduced, errors will be eliminated, downtime and transport maintenance costs will reduced. Thus, overall costs will be reduced, service will be significantly improved and customer loyalty will grow.
But what if the company doesn’t follow the trend to digitalization? According to Pavel Lisitsin, such a business will, sooner or later, be doomed to leave the market. The fact is that the market is dynamic, and even new companies can compete with the giants of the industry thanks to the use of modern technologies.
Pavel Lisitsin believes that only those who offer the best conditions will be able to retain their customers and attract new ones: a more favourable price, simple interaction, reliability and high speed of task completion.
Pavel Lisitsin: How to implement digitalization in a working business
According to Pavel Lisitsin, the introduction of digital technologies is a long-term game. Of course, this process requires investment, and in some cases it can take a long time to pay off. This requires long-term planning and a large-scale vision of your project and not just the desire to make a profit right now.
What specific technical solutions can be applied in a logistics company? Pavel Lisitsin suggests considering the following options based on your tasks:
- WMS-systems (automated warehouse management systems)
- TMS systems (transport management)
- Internet of Things (a single network into which you can combine various objects, from a forklift to a warehouse computer)
- Delivery by autonomous transport (for example, use drones)
- Big Data and analytics
This is not a complete list of technical solutions that exist in the market and can be applied (or are already actively used) in work. According to Pavel Lisitsin, every year there will be more such innovative technologies, and those that already exist will become familiar and even obligatory.
There is no single working plan for business digitalization. Solutions are selected for each company separately and require some serious analytical work beforehand.
Investment in logistics-related startups has grown by 80% over the past seven years. However, Pavel Lisitsin notes that Ukraine today can hardly boast of great achievements. According to statistics, more than half of logistics companies assess the level of digitalization of their business as very mediocre. Even those business representatives who have started the digitalization process, so far mostly do it in a targeted manner and don’t have a system and a clear strategy.
According to Pavel Lisitsin, this means that companies that go further than others and introduce new technologies more actively will gain a serious competitive advantage in the market. Those who continue to ignore new opportunities will soon find it extremely difficult to maintain their positions.