Big Data, the Internet of things, electronic commerce, new fuels… If we wanted to make a complete list of the logistics innovations that are changing the sector every day, the task would be endless. Logistics is one of the sectors most sensitive to new technologies and this is a constant challenge for their companies. But how do you know when to jump on the boat of the latest tool to appear?
When should we make the leap to logistics innovation? What’s more, should we make the leap to this new technology? Choosing correctly whether to do it and when to do it will greatly influence the future of our company. To help you decide, we are going to review what elements you should take into account to make the best decision.
The first or the last?
Just as important as what is when. With the arrival of an innovation, deciding when to adopt it can mean night and day. The first companies to jump on the bandwagon will have to pay a higher cost for doing so, unlike those that decide to wait to take advantage of cost reductions as time goes on.
This means that properly assessing the importance of the new tool is essential. Is it going to have a big impact on our current customers or to get future accounts? Is it going to be a differential factor when buyers opt for us? Are we going to be able to charge the user a cost for the new service we offer? You need to be able to answer these questions to make better choices.
Those who choose to wait will have to keep one thing in mind. The later it is incorporated, the less its effect will be. Early adopters will have an easier time identifying the new technology as their own and using it as a business tool. While the furthest behind, if they join when the client assumes that they have to have that service and no longer counts it as a plus, they will simply be covering a need.
Although not all are disadvantages. Sometimes, while you wait for your moment, some of the innovations will fall into disuse or prove unsuccessful. In those cases, while your competitors have made a disbursement to anticipate the market, you have saved this investment. You will also avoid the usual bugs that may occur in the first versions of the new tools.
Do you really need it?
We all like to be up to date. Serve our customers in the best possible way and offer them the best in the market. However, you should always assess how necessary that latest news is. Both for you and your client.
If what your customers value most is speed, surely your investment efforts should be aimed at reducing delivery times. However, perhaps it is the security of your pallets that worries you the most, in which case the expenses will have to go elsewhere.
Do not forget your own interests because in the last place they are also those of your client. Having an automated warehouse may be one of your dreams, but if you don’t need it, it will be an unnecessary expense. Do you have a warehouse large enough to require full automation? How much volume do you move? How many orders do you place each day? How many references do you have stored? Normally, an automated warehouse will be more profitable once it is up and running, but you have to add the cost of the reform to know that at the end of the month the accounts will come out. Perhaps the best option is to find a logistics provider, like us, outside your company.
Logistics innovation is not an option
We have exposed several reasons why you should rethink your investments. However, be clear about one thing: you are going to have to innovate sooner or later. A company that does its job perfectly today and continues to do so day after day, will be out of date in 30 years. What yesterday was doing things right, tomorrow will be doing them wrong, despite doing exactly the same thing.
That is why it is good that companies live immersed in a philosophy of change and that they are used to it. Staffs that fear any variation to their routine or are prone to “here we have always done things that way” are going to find it difficult to accept and promote the constant renewal that companies need.
Examples of logistics innovations
The variety of cases in which logistics has to measure its technological leap is very wide and we want to review some of them:
Last mile delivery options and ecommerce
All of today’s logistics operators are looking for a way to better serve this segment of the market, which is particularly delicate and attractive due to its complexity. The large number of alternatives that are emerging to the traditional home delivery can stun customers; and each of them is a technology on which to make a decision. Deliveries with drones, smart ticket offices, convenience points, deliveries in just a few hours… Various tools, all of them in different stages of development.
Fleet renewal and new fuels
Truck manufacturers do not let a day go by without offering the market new vehicles, new engines and, ultimately, new features. But companies can’t change their fleets every week. That is why they need to study in detail how their vehicles pay for themselves, when a new fuel is going to be profitable, what types of vehicles they need or how many kilometers they have to drive to know when it is beneficial to replace the vehicle. Again, timing is going to be key.
Software and Big Data
Few areas are as prone to use Big Data as logistics. The development and lower cost of sensors make it possible to measure an infinite number of variables throughout the supply chain. And the development of traceability down to the last detail allows us to obtain new and more precise performance indicators.
However, just because we can do it doesn’t mean it’s always the right thing to do. For example, for pharmaceutical products, evolution is essential when it comes to controlling the temperature of the products. But employing these same mechanisms on general merchandise might be less useful.
This is repeated with the rest of your processes. What do you need to measure? What does your client need to know and what would be dispensable?
Find the time to innovate
Everyone involved in the world of logistics knows how hoarding the day-to-day can be. However, you need to set aside a time for yourself and the workers where you can lift your heads from the important tasks now so you can see what will be critical tomorrow. This is the case of Google, which makes its workers dedicate part of the working day to thinking about new things, taking them away from their daily chores.
If you manage to create an environment in which innovation is a daily occurrence, if you analyze in detail the why and when of your bets on technology and if you dedicate enough time to it, you will have a lot won in the battle for logistics innovation.