Why Digital Transformation Is a Priority for Logistics Companies

Why Digital Transformation Is a Priority for Logistics Companies

A recent Forbes Insights survey concluded that 65% of logistics, supply chain and transportation executives believe that the digitalization of existing technological models is the key to achieving omni-channel delivery, significant cost reduction, and the ability to meet new consumer demands.

The continuing Coronavirus crisis has highlighted how important these capabilities are as supply chain and order disruptions create new challenges. The ability to identify inefficiencies and respond quickly to unforeseen events is now more important than ever.

But what creates an effective digital transformation plan, and what are the key areas where logistics companies can benefit from the new technologies currently raising the bar around the world?

The three key drivers of digital transformation in logistics, supply chain management, warehousing and transportation industries involve the Internet of Things, Cloud Solutions, Artificial Intelligence, Blockchain, and Big Data.

Emerging Technologies and Their Impact

Telematics, better known as the ‘Internet of Things’ is estimated to have a direct $1.9 trillion impact in the logistics sector in the next five years. Specific areas projected to be impacted include hardware, software, and data exchange processes.

Telematics enable businesses to visualize historical data and automate inventory replenishment based on consumer demand. Thus, telematics allow companies to track their products in real time to verify status and condition.

Additional technologies include autonomous delivery vehicles such as drones or driverless trucks, smart warehouses to monitor activity and improve inventory accuracy up to 95%, and wearables that provide hands-free guidance to workers.

Cloud Technology

Cloud-based applications can achieve greater supply chain transparency and reduce operating expenses dramatically but only 20% of businesses involved in logistics and supply chain management work with Internet-related software companies for initiatives in custom software development.

Artificial Intelligence (AI)

Artificial Intelligence based analytics solutions are manageable with cloud-based services that are fast, reliable, and cost-effective. They can dramatically increase the efficiency of chain management responsibilities by using data to forecast and optimize operations. They can share information in real-time, improving the buying experience for customers, and even forecasting trends on the horizon.

Financial optimization can be accomplished by assessing fuel consumption and emissions, vehicle costs, and traffic data, and robotic automation can fill labor gaps and scale operational capacity. All of these solutions can be implemented with custom software.


Blockchain technology can facilitate self-executing digital contracts, eliminating bureaucracy and human error to improve supply chain transparency and secure payment transactions. Each product can be identified, monitored, and analyzed from creation to delivery.

 Big Data

Big data analytics can help companies track the delivery of goods and supplies, optimize routes, deliver perishable goods with greater speed and efficiency, improve warehouse management, and improve customer service.

Barriers to Innovation

According to the Digital Supply Chain Transformation survey conducted by GT Nexus, 39% of logistics executives cite the lack of appropriate skills and expertise in the workforce as a barrier to digitalization. To offset this, it’s estimated that 61% of companies will outsource digital implementation to external partners for consulting and custom software development purposes.

Additionally, one in four logistics and transportation companies do not have a digital strategy in place, which will increasingly affect their bottom lines as newer technologies allow competitors to reduce costs and streamline operations.

How We Can Help

Would you like to know more about how we can help you create a digital transformation plan?

In our EndPoint Modeling workshops, we work with you to define your needs and create a cost-effective plan to achieve your goals. We work to ensure that all stakeholders are included, paving the way for easy adoption, and we provide you with a clear set of functional and non-functional specifications and a working prototype that can help you get the resources you need.

Leave a message in the comments, or contact us directly for more information. We love hearing from you!

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