When the only thing guaranteed is market uncertainty, logistics service providers (LSPs) need to turn to new technologies to deliver greater supply chain efficiencies that maximize value-added deliverables for their clients. That’s what Andrea Robinson, business development manager-UK for software provider CargoWise, believes will be a key to survival for LSPs in the near future.
“As the [logistics] industry shifts from one of survival mode to one of anticipated growth, companies are being forced to assess all elements of their business processes to create more scalable and agile enterprise systems that enable them to react rapidly to market change,” Robinson said.
“This means companies need to develop improved communications with their customers, as well as provide more interactive, effective client partnerships that deliver sustainable and profitable business,” she explained. “As the logistics industry evolves into a very reactive service business, LSPs are being increasingly challenged to fulfill a broader spectrum of global and multi-channel supply chain services on demand and on time.”
Robinson noted that such a “dynamic business” marketplace not only requires LSPs to reorganize resources and processes to meet the greater supply chain expectations of their customers, but they must do so without increasing costs.
To meets these demands, she said LSPs are increasingly turning to newer “on demand/hosted service” options to provide flexible and diverse business competencies while offering customers added value in their partnerships and controlling the true cost of ownership.
“The increased demand for communications between businesses today requires a level of IT infrastructure, automation and skill sets that most medium-sized businesses cannot deliver without high costs to them and their customers,” Robinson said.
“But organizations can optimize their opportunities and meet the challenges of market dynamics by eliminating costly in-house IT infrastructures, avoiding ‘purchase-and-install’ systems and adopting ‘pay-as-you-use’ hosted, multi-functional software applications,” she said. “That’s because such ‘on demand’ software systems also reduce the need to predict the future scale of client demand and lower infrastructure investment.”
As it’s also a low-cost way for businesses to use software and hardware to meet customer demands, this means logistics businesses can achieve highly agile and scalable systems that can be tailored to their specific operating needs at lower costs.
“As a result, LSPs can then focus on providing their customers with the ability to regularly adapt their enterprise systems to market changes and fluctuations without worrying about whether an IT infrastructure is capable of coping with technological changes,” Robinson said.