Key Takeaways
- Supply chain digitization helps companies improve efficiency, supply chain visibility, data accuracy, decision-making, and cost management.
- Digitization can be implemented through the use of WMS, TMS, barcodes, and RFID, system integration, and regular evaluation and improvement.
- Digital logistics offers processes that are more integrated, faster, and easier to monitor compared to traditional logistics systems.
As logistics activities become increasingly complex and require companies to manage goods and information quickly, accurately, and integratedly, what can you rely on? One solution to this challenge is logistics digitization.
Now, your company can use logistics digitization to monitor operational processes more easily while reducing repetitive manual tasks. Implementing this technology also helps companies obtain information faster to support coordination and decision-making.
Read the comprehensive explanation of logistics activities below to understand the benefits and implementation of logistics digitization in business operations.
Why Is Digital Logistics Important?
The growth of trade and distribution activities requires companies to manage the flow of goods more quickly, accurately, and efficiently.
In practice, the logistics process involves many stages, ranging from storage, inventory management, and shipping to monitoring goods.
The logistics process may become more complicated due to the various steps and can potentially cause delays in information flow, recording errors, and difficulties in comprehensively tracking the movement of goods.
This is where logistics digitization plays a role in simplifying the management of these activities through the use of technology and data integration.
Logistics digitization is the application of digital technology to manage, integrate, and monitor various processes in logistics operations. With logistics digitization, information from various logistics activities can be collected and processed within a single, more structured system.
The benefits of logistics digitization for a company’s operational activities include:
1. Improving Operational Efficiency
Digitization helps reduce administrative tasks that were previously performed manually and repetitively. This efficiency allows the workforce to be reassigned to tasks requiring supervision and decision-making.
2. Improving Supply Chain Visibility
Better visibility helps companies identify delays, changes in inventory status, or shipping issues. With this information, corrective actions can be taken before disruptions escalate and affect subsequent processes.
Explore more: FOB Shipping Point vs. FOB Destination: See the Difference Here!
3. Improving Data Accuracy
Input or recording errors can lead to mismatches between actual conditions and the data in the system. However, through a digital system, data can be recorded and updated more consistently. Companies can also use historical data to identify operational patterns and evaluate logistics processes based on documented information.
4. Serving as a Basis for Policy Decisions
Data collected through digital systems can serve as the foundation for analyzing operational patterns. Companies can evaluate delivery times, fleet utilization, inventory levels, and distribution performance based on the available data.
5. Optimizing Cost Management
Logistics digitization can also help companies identify activities that are not utilizing resources optimally. For example, operational data may reveal inefficient delivery routes or suboptimal fleet utilization. Companies can use this information to evaluate processes and identify appropriate improvements.
How to Implement Digital Logistics
For digitization to significantly impact operations, companies need to implement it in phases that align with their business needs. Here are the steps you can take:
1. Utilize Supporting Technologies
Implementing technology is crucial in digital logistics because every activity requires accurate, easily accessible data.
Common technologies include Warehouse Management Systems (WMS), Transportation Management Systems (TMS), barcodes, RFID, and shipment-tracking platforms.
A WMS manages warehouse operations, from receiving and storing goods to picking and fulfilling orders.
In addition to a WMS, companies can use a Transportation Management System (TMS) to manage transportation and distribution operations. This system can support the following logistics activities:
- Route planning.
- Delivery scheduling.
- Fleet monitoring.
- Distribution status tracking.
Barcode and RFID technologies can also digitally identify goods. When item data is scanned, the system can record information such as inventory type and quantity, speeding up the process and reducing the risk of data entry errors.
An example of its application is PT SCG Barito Logistics (SBL), a subsidiary of PT Chandra Daya Investasi Tbk (CDI). In its warehousing services, SBL uses a Warehouse Management System (WMS) to support activities ranging from receiving and storing goods to order fulfillment.
SBL also utilizes barcode scanning technology to help manage inventory more accurately. This technology supports the First-In, First-Out (FIFO) method, allowing goods to be managed based on the order in which they were received while also helping reduce inventory errors.
Worth reading: 7 Types of Logistics Service to Help Businesses Compete
2. Integrating Systems
Once the supporting technology is in place, the next step is to integrate each system so that logistics information can be interconnected. This integration is crucial because using multiple systems separately can scatter the data and make it difficult for a company to get a comprehensive operational overview.
For example, data from the Warehouse Management System (WMS) can be linked to the transportation system to synchronize inventory information, delivery schedules, and shipment status. With this integration, changes to data in one process can be automatically updated in related processes without the need to repeatedly enter the same information.
3. Conducting Continuous Evaluation and Improvement
Another step that can’t be ignored is evaluating and improving your digital logistics system. Periodically evaluate the system to ensure the implemented technology truly supports operational needs.
You can conduct this evaluation by examining indicators such as processing time, inventory accuracy, delivery punctuality, fleet utilization, and operating costs. The results can then identify parts of the process that still have issues or are not yet operating optimally, as well as to determine appropriate corrective actions.
Every application, system, and digital platform also needs to be updated and upgraded regularly to improve reliability, usability, and features. This can create opportunities for the integration of digital logistics systems in the future.
Differences Between Traditional Logistics and Digital Logistics
The differences between traditional logistics and digital logistics can be seen in how companies manage information, documents, communication, and shipment tracking. Here is a brief overview:
|
Aspects |
Traditional Logistics |
Digital Logistics |
|
Shipment tracking |
Shipment status is updated periodically and must be checked manually. |
Shipment status can be monitored in real time through a digital system. |
|
Data exchange |
Data is shared via various media and requires repetitive data entry. |
Data can be shared digitally through a single platform across the entire supply chain. |
|
Documents |
Documents are largely managed in physical form, requiring storage and archiving space. |
Documents can be created, shared, and stored digitally for easy access. |
|
Reporting |
Reports are created and archived manually, which takes more time. |
Reports can be generated automatically and accessed by those who need them. |
|
Communication |
Communication takes place through various channels such as phone, email, text message, or third-party portals. |
Information can be shared through connected logistics systems or platforms. |
Build Efficient Logistics Operations with CDI
The implementation of logistics digitization will be even more effective when supported by services and infrastructure that can ensure the smooth operation of every distribution stage.
To meet those needs, PT Chandra Daya Investasi Tbk (CDI) serves as a sea and land logistics solutions provider through its various subsidiaries.
For sea logistics, PT Chandra Shipping International (CSI), a CDI subsidiary, operates more than 10 vessels to transport LPG and chemicals, with a capacity of approximately 4,200–9,600 DWT, and the potential to expand its fleet as demand grows.
Meanwhile, land logistics services are supported by PT SCG Barito Logistics (SBL) with over 200 trucks, as well as inter-island services, maritime transport, import-export operations, customs clearance, and warehouse management.
Storage needs can also be supported by PT Chandra Cold Chain (CCC) through modern cold storage facilities with a capacity of up to 700+ pallet positions. Additionally, PT Chandra Warehouse Cilegon (CWC) operates warehouse facilities in the Cilegon area on a land area of more than 51,000 m² to support the storage needs of various industrial commodities.
With these integrated services, CDI can help your company build more efficient logistics processes. Contact us to find out which solutions best fit your company’s needs.
Entrust your company’s logistics needs to PT Chandra Daya Investasi Tbk (CDI) and its subsidiaries, PT Chandra Shipping International (CSI), PT SCG Barito Logistics (SBL), PT Chandra Cold Chain (CCC), and PT Chandra Warehouse Cilegon (CWC), as #YourGrowthPartner.
Keep reading: Integrated Logistics: Why It Matters & How to Implement It
Frequently Asked Questions (FAQ)
Check out the following frequently asked questions to understand the concept and its role in supporting business operations.
1. What Is a Digital Supply Chain?
A digital supply chain is a digital technology application that integrates, manages, and monitors all activities within the supply chain.
2. How Does Logistics Digitization Enhance Competitiveness?
Logistics digitization enhances competitiveness through operational efficiency, faster processes, accurate information, and a company’s ability to respond to customer needs.
3. What Is the Role of Information Systems in Logistics?
Information systems collect, process, store, and present logistics data so companies can monitor operations and make more informed decisions.