Today we're exploring the factors that need to be accounted for with a modern logistics management system.
First of all, you know your business best. Supply chain leaders, regardless of niche, are constantly weighing the pros and cons of every business decision imaginable. Right off the bat, I'll say we're only as good as our data.
Put another way: Sure, we can trust our gut instincts. But somewhere along the line, our gut learned a lesson. That lesson serves as a data point. We should be careful that our gut instinct isn't just a form of bias.
We need to remain open to change, especially when weighing decisions that affect the success of our organizations. I guarantee due to the sheer level of incoming data, surprises, and potential opportunity that a lot of people out there feel a ton of stress in their lives.
The Digital Revolution Comes to Logistics Management Systems
Thankfully, the digital revolution in logistics management systems arrived just in time to help. New terms we weren't saying before are now hot topics in the logistics management space:
These next-generation tools backed by AI, digitized documents, IoT, and machine learning are what will allow us to manage and overcome the global supply chain crisis. But how can these tools help you? How do you determine the right logistics management technology stack for your company?
Eliminate Waste From Your Tech Stack
We're weighing the factors that contribute to your logistics management system. There are so many software products available, it's hard to understand what's truly necessary and what's a waste of money. In that sense, it may be helpful to work by process of elimination. Put another way, what software systems do you not need? This can eliminate entire branches from your decision tree.
Do You Need a TMS?
A transportation management system (TMS) is a mainstay of many companies' logistics systems. If you want to read more about the features and applications of a TMS, check out this article. But what factors indicate you need a TMS in the first place?
- Do you have your own fleet of trucks?
- Do you route your own freight?
- Are you a freight broker?
- Do you need complex load tracking features involving real-time GPS?
If you say no to all these questions, a TMS might not be something you need.
Do You Need a WMS?
Similar to the last section, here are some questions that can give you a quick answer regarding your need for a warehouse management system (WMS).
- Do you operate your own warehouse or distribution center?
- Is your product subject to any kind of seasonality?
- Do you ever lose track of inventory of finished goods?
- Does your upstream customer want more visibility?
A WMS featuring artificial intelligence can help you track stock location in real time. It can also help you rotate stocking location based on seasonal upticks. In addition, AI can help you anticipate spikes in demand for certain products.
But on the other hand, these might not be factors that affect your business. In that case, you don't need a WMS.
Do You Need Document Digitization Software?
If you're in the supply chain, you know it's a paperwork-heavy industry. The hot topics we noted earlier are moving from theory to reality. Supply chain visibility, control towers, and digital twins are getting put into action.
None of these logistics management tools would be possible without document digitization software. There are several factors to consider when weighing your need for document digitization.
- Do you have a TMS or WMS?
- Does your five-year plan include supply chain visibility, control towers, or a digital twin?
- Do you want to streamline your entire organization and eliminate waste?
- Does everything else about your organization operate on computers except certain paper documents?
If you said yes to any of these, you should implement document digitization. It's the new backbone to the logistics economy.
But I get it. Change is very scary. We're talking about the factors we need to account for with logistics management systems. How can we not talk about organizational fear of change?
If Your Organization Fears Change, Just Think About How Far We've Come
Change is a huge factor when looking at tech. We can't discount the aversion to change as a limiting factor. Humans are adaptable. But humans also get stuck in our ways. We like the devil we know, versus the devil we don't.
Change might have gotten us where we are today. But change also must have killed a lot of our ancestors, when you consider how much we fear it.
How does leadership approach the fear of new technology? Think about the changes we've already mastered since the peak pandemic and early days of the supply chain crisis. It was bizarre! The world stopped. New, novel, and compounding logistics challenges have hit the global supply chains non-stop ever since. First it was semiconductors, then toilet paper, then chicken wings.
We all wondered, what's next? A shortage of clown noses? Aliens?
My point is this. If the supply chain crisis wasn't darkly humorous, it would just be dark. Change is scary, and things are messed up. But there's plenty to be grateful for, right? And we'll be able to look back on this and laugh about it, right?
What's the Deal With the Supply Chain? An Anecdote to Help Alleviate Fear of Change
What factors of logistics management systems contributed to the supply chain crisis? Well, we know the supply chain crisis started with a boom in e-commerce. Who caused that boom? Yeah, it's all our fault, isn't it?
But let's not be harsh on ourselves, OK? We were bored! We were stuck at home, not spending money on gas. Not eating out. No retail therapy. No live entertainment. What did you think was going to happen?
Yes, we enjoyed our family's company. That lasted the weekend. God bless you if it lasted longer. Because eventually we had to find a quiet closet to work. We had to learn how to do Zoom calls. Everything changed all at once, and it stressed us out!
So we hit Netflix. That felt good. Laughing felt good. It helped us forget our existential terror and utter annoyance with everything.
Then we started ordering stuff. Oh baby, that felt good too. We even ordered stuff while watching Netflix. We got so immersed in our new stuff that maybe we missed the faint boom of e-commerce echoing from Asia.
But did we order too much? And how is it that we're still in short supply of everything? This is all another new challenge for us. A new challenge on top of an old one.
The New Challenge on Top of the Old Challenge
First and foremost, the real problem is that we don't want the things we have. Don't ask me why that is! All I know is that humans agree that grass is always greener on the other side of the fence. This greenness seemingly kills us inside. It makes want to buy something new.
But when we go to order the new thing, what do they tell us now? Sorry. The new thing is missing something. "Supply chain issue," they tell us. It's over there, 97% complete, but it's not ready. I'm ready, You're ready. We were born ready! But it? It's not ready.
Eons pass. The neighbor's grass grows greener. Eventually your phone pings. It's ready! You order it! You pay for it! Oh boy!
But then it never gets there. You track your order. You can see your order. It's a dot on a map. But it isn't moving. So what do you do to kill the time? You order another thing!
One day, the thing arrives. It took so long that you had forgotten about it. The grass-growing season ended. Your neighbor moved. But you unbox it. You try it on. Guess what? It doesn't fit!
Can you just return it and get another size? Of course not! They're out of stock, and the reverse logistics for returns are bad. But please accept a store credit, so you can place a new order and do it all over again.
Other than the green-with-envy part, was any of this not a major change? The point is, you can do it. We're all doing it. It'll be OK.
First Things First: Digitization
We've covered a lot of ground today. If you're reading this, you're considering a big decision. Perhaps you consider the tech options on the market today intimidating. Maybe you're worried you've already missed the boat.
I assure you, more change is coming, so just jump in. And if you're looking for a good first step, check out document digitization. That'll give you the universal groundwork that will put your business in good position for the next big change coming . . . whatever that may be!
This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.