Role of Information Technology in Logistics and Supply Chain Management

Back when everything was done manually, organising and tracking shipments took a lot of time and effort. Nowadays, logistics and information technology are closely tied, helping to cut costs and eliminate human error.

This guide will provide an overview of logistics technology and digital trends in logistics and supply chain management. Learning about the connection between logistics and information technology can help business owners better understand the industry and make informed decisions.

Logistics and Information Technology

In the past few decades, logistics and technology have become inseparable. Innovation in the logistics industry gave companies tools for time and cost-efficient inventory management, freight shipping organisation, and much more. Companies failing to integrate innovative technology into their logistics processes are bound to lose out. Let’s take a closer look at the main types of logistics technology.

Barcoding

Barcoding and electronic scanning reduce the paperwork involved in logistics and inventory management while increasing processing speed and accuracy. Due to the wide range of barcoding technologies, consistency is key to efficient logistics information facilitation and exchange.

Electronic Data Interchange

Modern logistics rarely utilise traditional communication methods such as telephone or mail for document exchange. Electronic data interchange (EDI) facilitates convenient and safe document exchange within a company or between businesses. EDI keeps business data safe from third parties using modern encryption technologies and ensures the speed and accuracy of data flow. Furthermore, it eliminates duplicate data entries by linking software between organisations.

Data Management

Back in the day, logistics and supply management data management was carried out manually. Today, it’s achieved through handheld computers with built-in barcode scanners. Database management systems are among the most essential e-commerce and logistics technologies. They can store large amounts of logistics information and provide quick access to necessary data. Users can search information by product number, name, date, and other criteria instead of digging up papers. Furthermore, database management systems update inventory and shipment information in real-time.

Artificial Intelligence Systems

Artificial intelligence (AI) systems are among the latest innovation in the logistics industry. This broad term encompasses multiple areas, including voice recognition, robotics, and expert systems. In logistics and supply management, AI can be used to estimate costs and terms for different freight transportation modes or determine which stock must be replenished in a warehouse without the need for hours of human labour.

Intranet

Intranet is a local internet limited to a specific company and inaccessible to third parties. This logistics technology enables secure business data storage and exchange between an organisation’s servers, databases, and applications.

Stock Keeping Unit Dimension Capturing

The stock keeping unit (SKU) is a unique product number that enables users to instantly identify and track the item. After entering the SKU into a database, a user can view an item’s name, dimensions, and other information. Thanks to SKU technology, the weight and dimensions of freight can now be measured much quicker than ever before. Apart from speeding up the cargo dimension calculation process, SKU DIM technology eliminates human errors.

Route Optimization

The modern logistics industry heavily relies on route optimisation software. It helps freight forwarders and supply chain managers calculate shipping costs and times, optimise mileage to lower fuel costs and maximise distribution efficiency.

GPS Tracking

GPS (Global Positioning System) tracking is among the most useful e-commerce and logistics technologies both for businesses and customers. It enables real-time shipment monitoring, eliminating the need for lengthy reports and constant calls to check the shipment status.

Importance of Information Technology in Logistics

New technology in the logistics industry offers greater security, reduced costs, higher speeds, and ease of scalability. Businesses can exchange sensitive information privately without fearing that their company or customer data could be stolen. Meanwhile, dedicated software and AI provide short data processing times and can carry out tasks previously performed by workers, thus speeding up logistics processes and racing costs. Processes that required hours of days of human labour now take just a couple of minutes.

With the constantly growing demand for products and fading geographical boundaries comes an increased need for freight forwarding. Logistics technology removes geographical barriers and allows companies to rapidly scale their supply chain processes. Last but not least, businesses can quickly gather shipment, customer, and internal data for analysis and reporting purposes.

Digital Trends in Logistics

Technology in logistics and supply chain industries is constantly developing. However, some innovations in the logistics industry gain wider recognition than others. We’ve gathered the five main trends in the logistics and supply chain management industries.

Automation Technology

Automation is one of the oldest digital trends in logistics, but it isn’t leaving any time soon. Companies strive to digitalise as many manual processes as possible. Some examples of automation technology in logistics and supply chain management include barcode scanning, automatic shipment status updates, and mobile robots working in warehouses.

Blockchain Technology

Blockchain is widely associated with cryptocurrency, but it also has a place in e-commerce and logistics technologies. The term blockchain refers to a decentralised digital ledger. It can improve order transparency, enabling customers to track their orders in real-time. For businesses, blockchain technology facilitates audit and reporting transparency and improves operation security.

Artificial Intelligence

AI has been around for a while, but it’s a relatively new technology in the logistics industry. It helps professionals quickly analyse a large flow of data, reduce human error, and find optimal freight forwarding solutions.

Internet of Things

Internet of things is another new technology in the logistics industry that has already had a significant impact. It enables remote asset management and tracking by creating a web of connections between goods, packaging, vehicles, and transportation hubs.

Transportation Management Systems

Unlike AI or the internet of things, transportation management systems are an established technology in logistics and supply chain industries. They are used to analyse different freight forwarding options and optimise route automation. Transportation management systems help to cut shipment costs and provide an extra level of transparency for customers.

Logistics and Technology Are Integral

Hopefully, this guide has provided you with all the insights you need on the role of information technology in logistics and supply chain management. The timely implementation of trends in logistics and supply chain management gives businesses an advantage over competitors and improves the customer experience. GenX Freight keeps an eye on digital trends in logistics to guarantee optimal cargo shipping solutions, security, speed, and fair prices for every client.