October 28, 2022

Logistics Process Automation: Importance, Benefits, and Use Cases!

Logistics process automation is crucial to enable operational efficiencies and meet the growing demands of customers. Learn how you can leverage it for your logistics business.

Warehouses and distribution centers have been using automation for decades, from the earliest days of conveyor belts and robots to today's most advanced storage and picking solutions. The benefits of automation are numerous and go beyond mere productivity metrics. It helps meet the growing demand for efficient logistics management. 

This article looks at the benefits of logistics process automation and the areas of your business you can automate.


The Role of Logistics Process Automation

The logistics industry is one of the most critical industries in the world. In 2018, the global logistics industry was valued at $9.6 trillion and was expected to reach $15 trillion by 2023. According to some rough estimates, logistics contributes 10% and 12% to the GDP of the US and the world, respectively.


Logistics process automation involves using technology to improve the delivery of goods and services. This can mean using technology to find new ways of delivering goods more quickly, cheaply, and efficiently. It can also mean using technology to replace human labor with machines.


The purpose of logistics process automation is to reduce costs and increase efficiency. Logistics automation often gets used in conjunction with other forms of automation, such as robotics or artificial intelligence (AI).


There are many ways that logistics can be automated. Some include:


Inventory Management Software

Companies like Amazon use inventory management software to keep track of their products and location. This allows them to know when they need more inventory or when something needs to be shipped out. It also helps them avoid having too much stock at any time.


Shipping Software

Shipping software allows companies like Amazon to manage their shipments in real time, which means they know exactly where their shipment is throughout its journey from A to B. It helps reduce delays and ensures that customers get their orders as quickly as possible without any mistakes.


Traditional Challenges with Logistics Management

Here are the various challenges logistics companies usually face due to traditional processes and a lack of automation.


Manual Methods of Processing Documents


When it comes to processing large-scale documents, several challenges come with it. The primary challenge is the time it takes to process the documents. It can take a long time for your team members to process each document and take up valuable time in their day.


Another challenge is there can be several different types of documents that need to be processed. This can make it harder for your team to keep track of them. There are also times when your team may lose or damage these documents.


For example, if your team has several invoices to process and enter into your system, it can take hours. Not only that, but if your team doesn’t pay attention to detail, it could end up entering incorrect information or losing track of data.


Increased Transportation Costs

The cost to move goods has risen dramatically in recent years, which has put a strain on businesses that rely heavily on transportation. In 2021, the cost of moving goods by road and rail moved up by 23% compared to the previous year. The costs were further expected to continue rising in 2022 and beyond.


It is especially true for companies that ship goods internationally and those with less-than-ideal shipping conditions at their disposal. In these cases, it's not uncommon for shipping costs to be higher than they were a decade ago.


Compliance with Regulations

Everybody loves a good challenge. But when it comes to logistics management, challenges are not always what you want to hear. The reality is that complying with regulations can be one of the biggest challenges faced by logistics companies worldwide.


The reason for this is simple: regulations change frequently and rapidly, meaning you need to adapt your processes constantly to stay on top of them. It can be highly time-consuming and costly.


For example, if your business is in Europe and you sell products in the US, several regulations apply only to those countries—and they don't always align. Every time you ship from one country to another, you need to figure out which rules apply and ensure your shipments meet compliance requirements for both locations simultaneously.


Streamlined Operations

As companies grow and become more complex, it becomes difficult to manage all their operations in one place. It is vital to have a system that can handle the needs of a company as it grows. Furthermore, it should allow the company to focus on its core business instead of worrying about logistics management.


The other challenge is the need for a system that can grow with a company. As companies grow, their needs change and new challenges emerge. It is crucial for the logistics management software to adapt quickly as well.


Offering Personalized Services

Customers have different needs and expectations about what they want from logistics management companies. For example, some might expect their shipments to arrive on time, no matter what. Others may be willing to wait a few days if it means getting a better price on shipping costs.


Another issue with offering personalized services is it can take time and money to understand what kind of services each customer wants. Companies need to invest in technology that allows them to track customer preferences and other factors like shipping history.


Workforce Management

The ability to manage the workforce effectively is essential for smooth operations. Managers must be able to recruit, hire, train, and retain employees to ensure that they have a reliable team that can handle the workload. This can be difficult, time-consuming, and costly. However, companies must maintain maximum efficiency and profitability.


For example, it’s one thing to have a bunch of trucks and drivers in your fleet—but what do you do when one of those vehicles breaks down? Or if one of your drivers gets sick? Do you have automated systems that can step up to ensure your operations do not get affected?


The Need for Automation in Logistics

Automation is not just a buzzword or a trendy marketing term; it's a reality that is already changing our lives and the world around us. From self-driving cars to smart homes, AI and automation are becoming more commonplace in every industry. In logistics, automation is becoming an essential part of supply chain management as companies look for ways to increase efficiency and reduce costs.


The logistics industry is a vast and complex ecosystem. It consists of many players, including manufacturers, retailers, carriers, suppliers, and customers. The success of these players depends on their ability to coordinate their activities efficiently and effectively.


It is no longer surprising that the logistics sector is witnessing large-scale investments in automation. The global automation market size will continue growing at a CAGR of 11.9% between 2021 and 2030. Besides the usual benefits of improved process efficiencies, automation has a lot to offer to the logistics segment. Let’s look at that in detail.


Benefits of Logistics Process Automation

Here are the various advantages of making your logistics systems automated.


Faster and Accurate Processing of Documents

When it comes to automating the processing of documents, two main factors will determine how effective it can be: speed and accuracy. The faster you process a document, the sooner you can begin shipping the item out on its journey to its destination. And the more accurate a document is at every step along the way—from receiving to shipping—the less chance there is for error or delay.


By automating your logistics process with robotics and other forms of automation, you'll be able to get your items shipped out faster than ever before. You'll also be able to ensure that every step in this process is as accurate as possible so that no mistakes are made along the way—giving you more time and energy to focus on what matters most: your customers.

Real-Time Data Access

The process of collecting and analyzing data often gets slowed down by manual labor. It requires people to collect information at predetermined intervals. It can take hours or even days before you know the impact of your marketing efforts on sales and customer retention.


With logistics process automation, however, there is no need for a person to collect the data. Instead, you can gather it automatically and in real time. You will get your results much faster than if you were using manual data collection methods.


Better Customer Service

With automation in logistics, you can provide your customers with a better experience than ever before. Automation helps to smooth out your processes, so you can focus on providing excellent customer service at every touchpoint in their journey with your brand.


One example is package tracking. Customers can use mobile apps to track their packages and see where they are. This allows them to expect a delivery on time and know exactly when it will arrive.


Improved Business Visibility

With automated processes, you can see exactly where your inventory is and how it's moving through your supply chain. This allows you to make better decisions to manage your stock levels and price points. It also gives you more control over shipping costs.


Business visibility is crucial when it comes to perishable goods like food. You need to know exactly where your product is so that it doesn't spoil before it gets delivered, which would cause a loss of revenue for both you and the customer.


Better Business Scalability

It's one of the most challenging areas to scale a business because it involves many moving parts and people. That's where automation comes in. With automation, you can ensure your supply chain is working as efficiently as possible and that you have the right resources.


When things get automated and streamlined, there are fewer human errors—which means less wasted time and money on correcting mistakes or fixing problems. This is especially important for businesses with high volumes of shipments because it means they can focus more energy on growing their businesses instead of dealing with logistical issues.


Logistics Processes you can Automate!

Here are the different processes you can automate in your logistics business.


Document Processing

When you have a lot of documents to process, it can be hard to keep track of everything you need to do. You might forget something or spend too much time on one piece of information when you could've moved on to another.


By automating your document processing system, you can ensure every piece of information gets where it needs to go and that all the steps get completed in the correct order. It will save you time and money and reduce errors in the process.


Movement of Goods in Warehouse

The movement of goods in a warehouse is a complex process that requires careful planning, organization, and execution. It involves several people, both workers and managers.


The movement of goods in a warehouse can be automated using advanced technologies such as RFID (Radio Frequency Identification) tags and barcode scanners. These technologies are widely used in warehouses worldwide to track items as they move through the facility.


Truck Loading and Unloading

Automating the loading and unloading of trucks will help eliminate human error and reduce the time it takes to complete the process. You can do it with a simple robotic arm that loads and unloads trucks or automates the entire process with a robotic system that can perform all the necessary steps in one go.


Inventory Control and Management

This process involves the tracking of inventory, which includes not only the location but also the number of goods in each location. This information can determine if there are enough stocks at any given time and what items are needed to replenish them.


An automated system for inventory management allows you to track your stock levels, know when you need to order new items, and check if there are any shortages or overstock. This helps reduce costs associated with holding excess inventory, as well as being able to react swiftly if there are any problems with your supply chain.


Bottom Line

Logistics process automation is more crucial than ever in logistics and a trend that will continue to become more prominent with time. It's all about creating efficiencies and minimizing waste wherever possible. From smartphones to sensors, automation is at the core of many new logistics solutions. And as technology progresses, we'll likely see even more advancements in this area that will continue to make logistics an increasingly sophisticated industry.

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