Logistics Trends Radar

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We were invited by Intermodal & Logistics Magazine to participate along with other experts in the field to a debate on Logistics trends. Here are some of the most important logistics trends we have identified ourselves.

Although it is an old trend, diversification effects will be felt even more than it did. We are talking about product portfolio diversification for both manufacturers and importers, but also diversification of distribution channels for the final client.

This trend has both advantages and disadvantages for Logistics operators. The advantage of this diversification is that more and more companies want to outsource Logistics services when they become too complex to be managed “in-house” and the disadvantage is that the requirements related to the rendered services will increase in variety and complexity, and those who will not be prepared with effective solutions will risk to become uncompetitive on the market.

Logistics operators are not the only ones who will be impacted by the growing range of products and distribution channels. Solution providers related to the Logistics business (software, equipment, etc.) have their advantages and disadvantages. The advantage will be that more businesses will need modern business solutions for Logistics management, and the disadvantage is that these solutions require a very high degree of accuracy and efficiency.

Basically, if by now logistic activity in Romania was in most cases relatively simple and could be done even with a pen and paper, this will not be possible in the near future.

Dwight Klappich, Vice-President of Gartner research said in an interview:  “While Logistics operations might be out of sight, out of mind, Logistics is under significant pressure to deliver near-perfect performance, while business conditions continue to become more complex, risky and difficult.”

This is and will be undoubtedly true in Romania, as well. Businesses are becoming more complex, dynamic and profit margins get smaller. For example, if the last decade the activity of a 3PL mainly consisted in receiving, storing and delivering pallets (mostly homogeneous, but also mixed) and monthly reporting to customer the services provided at present customers require the 3PL operator to guarantee a 98-99% precision, picking in various packing units, lead-time of 1-2 days, a WMS system providing visibility to real-time inventory and operations, to be customizable according to customer requirements, to be integrating all warehouse network into a single application, etc. Some clients might also require “delivery in real-time”, which means a lead time of 2-4 hours. All of these to the lowest prices and to the lowest contract periods.

At the same time, requirements for additional services such as packaging, labeling, assembly, etc., appear more frequently and, although not strictly related to Logistics, urge the customers to choose a 3PL operator that can provide a complete package able to simplify their processes, but also the relationship with suppliers.

In this context, a Logistics operator who lacks extensible and customizable software solutions at no additional cost risks losing customers and to become unprofitable. When referring to the WMS solution required by a 3PL, it is mandatory to provide features such as: defining new warehouses / workstations, changing the structure of the warehouse, customizing workflows and documents issued by the client, standard EDI interface for integration with other systems, define new users, control access to information by defined roles and user access to data regardless of location. Many have already understood this trend for both storage and transportation and have implemented cloud solutions providing a high degree of competitiveness.

In conclusion, the Logistics market will face the customers expectations of diversification, efficiency and standardization, and the latest technology will be one that will make the difference between the players in the Logistics field.

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