December 29th, 2021
How an algorithm is blended in Logistics Industry
Long before the current pandemic ever existed, the nature of global business environments had already drastically changed. Many traditional business methods had been replaced with online platforms, which were more cost-effective, flexible and efficient. The many advancements and changes from conducting real time-digital business transactions and more regional and global e-commerce businesses led to a higher demand of logistics services. The traditional logistics offline business model will need a transformation into real time-online business transactions in order to catch up with global digital business model. Most logistics companies (Transporters) work independently to employ their own sales, operation, finance, and marketing staff. As a result, companies are unproductive, disconcerted, have difficulties adapting to the current trends, and fail to find better business opportunities.
During my time serving the industry, I found my work schedule inefficient, with so much time being wasted waiting price quotation from other agents or waiting for reports to issue invoice billing. The bottleneck in logistics industry has always been the “long wait time”, which is one of the most expensive operation costs being added to Shippers. For example, when our sales department receives a new work order, they need to prepare detailed instructions, reviewed and initialed by supervisor. The operation needs to wait for order instruction before operation work can be started. Accounting is also facing the same waiting time before being able to issue the final invoice. Although operation has finished their operation, paper work is still with the operation’s personnel who is only able to return documents by day’s end or tomorrow morning.
Logistics industry needs to implement a technology platform with centralized functions of operation infrastructures, financial, sales-marketing, administration. Technology with its algorithm is able to analyze business information and auto deliver information directly to other nearby companies, allowing greater flexibility and better decision making. With a self-configured algorithm, each company is able to receive collaboration and cooperation notifications of “sales opportunity or sharing space availability”, in which each company can share to their consumers.
With a technology algorithm, each logistics digital information is integrated, communicated and distributed to the shipper without delay. The slow process of waiting for documents or waiting on instruction before work can be started will no longer exist. Shippers and logistics companies (Transporter) can easily review, evaluate and make selection of transporter in real time. Detailed digitized service requirements of schedules, location pickup and delivery, pricing structures, and others charges are automatically displayed in real time before shipper makes final confirmation. This will provide a new business solution that provide logistics service transparency and trust to all logistics users.
The question is, what will it take for logistic industry to transform its offline business method into a real-time technology platform? There are complicated logistics variables which should be carefully managed properly by a developer, such as customs, financial and transportation where local regulation is varied from one country to the other. I am optimistic there will be a company who has deep knowledge in logistics and technology infrastructures able to design, develop and deliver a fresh solution to this giant industry, where each marketing-sales-operation-customer service, finance and administration information are delivered to Shipper and Transporter without delay.
Our world is beginning to work more favorably toward modern digital life style which are simpler and more efficient than our grand-father’s times. Written by: Eddy Syaifulah, Director at Mahyu LLC