So, what exactly a logistics software entail? Why is it so relevant now and how it came into existence? How is it different from the traditional supply chain and logistics systems business have in place? Can it drive business growth? The list of questions regarding logistics software can get really exhausting. Therefore, we thought of summing up the what, when and hows of logistics software in this post.
Let’s begin with a short definition of modern logistics software and why is it so relevant now.
What is Logistics Software
A logistics software is a platform that leverages machine learning, predictive intelligence, automation, and information integration capabilities to help supply chain and logistics businesses improve delivery planning, reduce operational expenses and boost customer experience.
History and Origin of Logistics Software
When talking about the existence of a logistics software, the developments that took place in the 1980s plays a key role. It was during this period that personal computers emerged, and this helped supply chain owners plan logistics in a more graphical environment. Then came spreadsheets and map-based interfaces further optimizing logistics processes.
In the 1950s, ERPs came into existence. Even though it was not an overnight success, but with considerable improvements, especially after the year 2000, ERPs significantly helped logistics planning by improving the availability and reliability of data. This evolution of ERPs resulted in the emergence of what used to be known as an Advanced Planning and Scheduling Software (APS) and thereby planting the seeds of a far more sophisticated and mature platform that we today know as logistics software.
What is The Relevance of Logistics Software?
Constantly evolving business models, the rapid growth of the ecommerce industry, enormous changes in customer demands and the need to increase profitability are some of the key factors driving the relevance of a logistics software. Enterprises across the globe are leveraging advanced logistics software to increase delivery happiness score, boost supply chain visibility, save operational costs, optimize reverse logistics processes and do much more.
The relevance of logistics software gets even more significant when we talk about the need to build supply chains that are pro-active. Logistics software with machine learning capabilities can deliver predictive intelligence that help businesses plan better routes, reduce risks and boost productivity.
What Makes Logistics Software A Business Enabler?
There is no easy way to answer this but to talk about the unique capabilities of a modern logistics platform. Here’s a quick yet important list of things every supply chain and logistics stakeholder should know about a logistics software.
Real-Time Dynamic Routing
Logistics software powered by real-time dynamic routing capabilities adds immense value when it comes to fulfilling requirements, like hyper-local food and grocery delivery, that demand quick turn-around-time. It empowers businesses to minimize empty mile journeys, eliminate vehicle idling time and optimize the productivity of delivery executives by assigning them highly efficient routes.
A key area where such software makes a difference is fleet utilization. To help businesses optimize fleet utilization, modern logistics software addresses the most exhaustive constraints that disrupt transportation operations. Some of these include driver-route mapping, pickup windows, delivery windows, no-entry time windows, tonnage, empty miles cost, running and waiting costs, etc.
Same day deliveries are becoming increasingly popular, especially in American and European countries. The growing demand for same-day delivery will account for $200 billion in US online sales — about 25 percent of the US e-commerce market — by 2025, according to McKinsey.
Hence, retailers are constantly looking for ways to loop in more delivery executives but at a reduced cost. This is where modern logistics software plays an important role by generating an Uberized version of crowdsourcing deliveries. This help retailers find delivery executives on-demand and at lower costs. From a customer perspective, it significantly boosts delivery happiness score by fulfilling the one-day delivery expectation.
Ensures OTIF deliveries and Shrinks TAT
On time in full delivery (OTIF) is becoming the new normal. Today’s savvy logistics software with machine learning and predictive visibility capabilities can drastically reduce the chances of theft and pilferage. At the same time, it reduces turnaround time (TAT) by optimizing delivery routes in real-time and increasing productivity of delivery fleet.
An important part of delivering goods in time is accurately estimating delivery time. A modern logistics software does exactly that. By analyzing variables like distance covered, delays, route efficiency, and others, it accurately predicts ETAs.
Intelligent Task Allocation
Logistics software significantly improves an organization’s ability to scale delivery processes and save costs. Based on driver proximity and number of deliveries on a given route it can automatically assign tasks to delivery executives. To scale during peak business hours, logistics software can intelligently outsource delivery tasks to third-party logistics providers.
By using Machine Learning (ML) powered logistics software businesses can easily achieve complete supply chain and logistics visibility. ML capabilities empower logistics software to navigate through historical data of already-traveled routes and quickly generate key insights into route performance, delivery duration, and risks.
Reverse Logistics Efficiency
As free-returns begin growing in number, keeping a check on reverse logistics expenses will be a key when it comes to ensuring a sustainable supply chain. To achieve this, businesses need to gain absolute visibility of their supply chain and logistics processes. Logistics software can be of great help. It can provide maximum visibility of every single reverse logistics process and thereby ensure costs are optimized and risks are eliminated.
Long unprecedented stoppages on a particular route imply a possible situation of theft. ML capabilities can analyze past incidents of thefts on a particular route and deliver valuable insights on why a particular route should be avoided completely or at a given point of time.
So, if a truck exceeds the time taken to reach point B to point C by an hour, ML capabilities can trigger an alert informing about possible theft. Capabilities like this can help businesses save millions of dollars.
Seamless Collaboration Between Stakeholders
Fragmentation of stakeholders is a major challenge in the transportation industry. It happens frequently that a consigner does not know the trucker, the consignee has no idea about the 3PL provider who will be executing the delivery and so on. This results in confusion and incorrect information being passed on.
Modern logistics software ensures real-time collaboration between all logistics stakeholders and hence keeps everyone abreast with the right information at the right time and thereby improves decision making and exception management by multifold.
Poor interoperability of legacy systems is a major bottleneck when it comes to streamlining supply chain and logistics operations. According to the Transportation Planning and Execution Benchmark Study, 61 percent of shippers say that the biggest challenge of their existing TMS is its inability to seamlessly connect with other logistics systems.
A modern logistics software can pull data from multiple sources, like TMS, ERPs, WMS and 3PL systems, onto a single platform showing the right information to the right stakeholders. This boosts visibility of disparate supply chain processes and empowers businesses to benchmark KPIs accurately.
Modern logistics platforms can track delivery fleet in real-time and trigger alerts in case drivers take unnecessary stoppages and diversions this also empowers delivery stakeholders to boost the productivity of delivery fleets. Modern logistics software also uses machine learning capabilities to deliver predictive intelligence while planning delivery routes. It does so by analyzing the performance of a particular route based on historical data. This ensures that the most efficient route is assigned for delivery.
Geo-Fencing Truck Movements
A significant amount of productive work hours is wasted at warehouses just loading and unloading trucks. An advanced logistics software can easily address this challenge by using geofencing capabilities. Supply chain and logistics stakeholders can get alerts in real-time once a truck enters and leaves a factory. Such software can reduce waiting time by 50 percent. Especially for third-party logistics providers, waiting at warehouses can be a nightmare. According to studies $1.3 billion, is how much money truckers lose in wages annually waiting at warehouses for loads.
Digital Control Tower
Being able to see and track each movement of your delivery fleet makes a lot of difference when it comes to enhancing delivery operations and reducing logistics expenses. A logistics solution that is powered by digital control towers leverages real-time data from the largest GPS, ELD and telematics network to keep a check on the current status of all your loads moving on the ground. Also, it empowers businesses to get easy alerts for exceptions and escalate tickets in real-time.
Ensures Delivery Scalability
Scaling delivery operations during peak business hours can get difficult. A modern logistics software can rapidly scale delivery by intelligently outsourcing delivery tasks to third parties based on delivery volume, driver proximity and cost effectivity.
Manual paper-based delivery receipts leave plenty of room for manipulation and unnecessary delays. Archiving manual receipts also become cumbersome. Electronic proof of delivery or e-PoDs increases the speed and efficiency of last-mile delivery. It reduces manual errors, eliminates paperwork, and minimizes chances of manipulation.
Greater Customer Transparency and Flexibility
Generating proactive alerts for ETAs is another key feature of modern logistics software. Businesses can intimate customers in real-time in case of upcoming delays in the route. This ensures customer transparency and positively impacts delivery experience.
A logistics software also allows businesses to ensure flexible deliveries. Customers can easily change the time and location of delivery according to their need. They can also escalate queries by using live chat sessions with a delivery personnel.
Digital Customer Feedback
Getting accurate customer feedback and that too quickly is important when it comes to improving delivery happiness score. By digitizing customer feedback, logistics software helps retailers know what a customer feels about a particular delivery and that too in almost a real-time like environment. This, in turn, allows businesses to quickly respond to the issues a customer raised and improve resolution turnaround time.
The list of things one needs to know about a logistics software is indeed exhausting, but then it’s worth the time as it will help you narrow down your options when investing in one.
FarEye is helping businesses significantly improve collaboration between disparate delivery stakeholders and drastically improve visibility into ground level operations. To know how FarEye can help you achieve the same sign up for a quick demo here.
One of the most important pieces in this game of deliveries is the experience that the customer undergoes as a good Delivery Happiness Score is the cornerstone for customer retention and brand equity. For an on-time delivery execution to take place, a well-orchestrated engine needs to function like an oiled machine at peak efficiency.
Service employees are the brand. Employees truly “are the brand” and optimize the company image that each is attempting to create in the minds of its customers. Because contact employees represent the organisation and can directly influence customer satisfaction, they perform the role of marketers. For your employee to satisfy your customer it is important that he is satisfied.
By analyzing historical data of route performance and efficiency of 3PLs, predictive visibility helps businesses generate accurate ETAs by eliminating guesswork.