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Digitalization of logistics

As companies become more global, they are increasingly driving the digital transformation of their businesses through Logistics 4.0. However, digitalizing logistics processes is not without risk.

In our article, we discuss the key elements of this new paradigm and how it affects logistics. We will discuss the technologies shaping this evolution toward a warehouse that is hyperconnected to the rest of the supply chain.

First, we are going to talk about what digital transformation is?

 For those who are not familiar with the concept of digital transformation refers to the introduction of new technologies in all aspects of a company in order to increase its efficiency. In other words, digitalization in logistics means integrating digital capabilities in areas such as storage, preparation of orders, and transportation, among others.

The trend of digitization in all areas of a company is set to continue in the future. As of now, it is penetrating the major economic sectors, albeit unevenly. 

According to a study by the consulting firm McKinsey, businesses are prioritizing the use of new technologies in their marketing strategies (49% have done so) and in their products and services (21%). Only 2% of those surveyed stated that they had introduced digital transformation initiatives in their supply chains.

Nevertheless, the sector hasn’t ignored it. A Forbes Insights survey found that 65% of logistics managers are aware that if they want to survive in the digital age, they must overhaul their business models.

Technology enabling digitalization in the warehouse

The technology aims to achieve automated and intelligent management of a company’s documentation and of the organization of its procedures or workflows, among other things.

Nevertheless, it’s impossible to separate digital transformation processes from the technologies forming the core of the fourth industrial revolution, Industry 4.0. For context, we’ll go over the main technologies linked to digitalization in warehouse management

Cloud data storage: there are more and more warehouse management systems available in SaaS mode as opposed to the traditional on-premise version.

IoT devices: Internet of Things technology applied to the warehouse is closely related to the various sensors that capture information from the physical world and dump it into digital databases. 

Automation: In intralogistics operations, machines and automated systems coexist with operators as they carry out their tasks.

AI in logistics: Artificial Intelligence has made mass data analysis possible in the various links of the supply chain. 

Environment simulation with digital twins: This technology is extremely useful when designing a warehouse or making changes to its layout. 

Today’s competitive advantage, tomorrow’s obligation

Many people mistakenly see digitalization as an end in and of itself; in reality, it’s a means to better business and logistics management. The Deloitte Industry 4.0 investment survey shows that the driving force behind digital transformation in firms is improved productivity, closely followed by competition and customer requirements.

Investing in the most eye-catching or revolutionary systems doesn’t produce the best results; rather, you should analyse your company’s needs carefully and assess the return each technology will bring.

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