05 Feb 2018 Automation vs Customer Service

What Trends are Influencing Logistics in 2018

The supply chain and logistics industry is ever-growing, fluid with constant change. Entering 2018, businesses need to be remain ahead of the latest trends. This year, we see two notable developments for third party logistics companies in Australia, leading to changes visible across the 3PL warehouse industry.

1. The Rise of Automation

We experience automation just about everywhere. Automation trends and transforms across entire supply chains, not simply among retailers and ecommerce capturing customer spend statistics and satisfaction online. More and more businesses are getting on the bandwagon: with automated reporting, marketing campaigns, invoice processing, internal workflows and much more.

Even in the most ordinary (and unexpected) places, there is significant investment in new technology, especially in the area of data-capture. And not just your usual name and email capture to build contacts and marketing lists. How would you know if the new coffee machine installed by your firm sends reports to management? Yes, this is a thing. It could be reporting on the number of cups of coffee made each day; the strength used; peak periods – all for the purpose of correlating with other data (revenue, inbound calls, number of open tickets) to measure production. Data-capture is not necessarily a new trend, but it is an ever growing one.

Many believe that there is a driver shortage in the third party logistics industry. This is, in fact, true. While the number of licences issued may have increased, there is a difficulty in the market finding drivers with relevant experience. And for some businesses, this has been a longer term issue.

The current debate is whether autonomous vehicles could be a solution, in order for the 3PL warehouse transportation network to evolve by using advanced transportation management and transportation network design solutions. Third party logistics companies expect reductions in wasted travel time and a significant saving on recruitment and training from the reduction in the need for drivers. However, the limitations of current technology means fully autonomous vehicles are not a possibility at this point in time. And the cost of entry would be phenomenal in this early phase.

2. Demand for Customer Service

So why the demand in this type of automation? It can be argued this stems largely from consumer demand for better customer service.

As we experience here in Australia, wages globally are also on the rise and not just in the west or developed parts of the world. Developing countries are experiencing phenomenal growth in what we term the middle class. With the increase in this level of income earners, we see an increase in consumption and higher expectations of quality and levels of service. The automation of production and the speed to get goods to market is needed to meet this demand. Yet consumers expect a reduction in prices as a flow-on effect of operators passing on cost benefits to buyers, but the expectation on service is higher than ever. In order to provide customers with a quality experience, the ease in transacting, to purchase again – companies still need to invest in the human element. Automation satisfies customers’ needs related to instant fulfilment, however this does not easily translate into the realm of relationship building. Customers that come back to you again and again aren’t buying from your business, they are buying from you – from the people that work for you. Companies should invest in automation to manage the areas of business that your customers cannot see; to benefit from a decrease in workforce and economies of scale. But more importantly, to transfer savings gained to invest in building a team of people with soft skills; those that can listen, are personable and can build long-term relationships with customers. Be sure to keep this on the top of your to-do list for 2018.