A Guide to Logistics Automation

Several processes benefit from automation along your e-commerce supply chain (from procurement to distribution and beyond). Logistics automation can prove to be a powerful partner to the other automated components of your business. When made to work in conjunction with broader elements such as supply chain management, it ensures effective and optimized back-end logistics functions.

Logistics Automation

What is Logistics Automation?

Logistics automation is the use of digital processes and automation technology to make your business’ logistical functions faster and more efficient. What it means is giving your logistical processes automatic control via control systems, software, and automated machinery, thus improving time, quality, and efficiency.

Logistics automation is usually applied to the back-end logistical functions of your e-commerce company. This majorly includes application to logistics processes undertaken in the warehouse or distribution centers of your e-commerce business. Your company could save a lot of bucks by minimizing human intervention in these components of your e-commerce value chain.

Components of Logistics Automation

There are several components to the logistics automation system of a business, including hardware and software components. Optimizing one or all of these can go a long way in ensuring smooth-sailing logistical functions for your e-commerce company. 

The hardware components include:

  • Fixed machinery that is automated using digital software.
  • Automated retrieval and storage systems such as cranes serving several racks of stocks together, or automated vehicles to aid the human counterparts in logistical operations.
  • Automated transportation machinery such as conveyors helps in transporting containers from one location to another without human intervention or sortation systems.
  • Industrial robots that are used for tasks such as palleting, packaging, and order picking.
  • Automation for taking care of tasks such as checking individual products for a specific weight. 
  •  

The software components include:

  • Radio data terminals – a mobile technology that essentially connects transportation to logistics via radio. Radio data terminals often also have barcode scanners that make for easy identification. 
  • Integration software – one of the most crucial components in logistics automation, it is considered the backbone of the whole system. The software controls the functioning of the entire automation machinery in logistics automation.
  • Operational control software – a critical component of basic decision-making abilities, such as storage and subsequent retrieval of incoming containers.
  •  
  • Business control software – responsible for high-level functioning and decision-making, such as managing incoming and outgoing stocks, assigning stocks to containers and trailers, and even scheduling order fulfillment.
Logistics Automation

Benefits of Logistics Automation

In any business, the automation of an individual element along a broader value chain allows the whole system to become more high-functioning and tailored to the specific needs of your e-commerce company. Logistics automation comes with its own set of advantages:

  • Automation of logistical functions leads to greater administrative control. While automation systems are flexible and can quickly adapt to the company’s business goals, they are also powerful enough to mold internal and external users to use logistics processes that ensure profitable shipping.
  • Logistics automation can minimize the margin of human error that could lead to a significant loss. In the case of the alternative, i.e., manual data entry, the possibility of errors never goes away, and thus carries the risk of increased costs.
  • Logistics automation provides you with real-time access and analysis of load data. This allows for better-researched and data-backed business decisions.
  • Automation will make your logistics processes faster and more scalable. Automation software allows for easy entry into the entire system and subsequent operations management with greater efficiency and agility. For example, in a warehouse, automation will let you simplify transport invoicing into weekly invoices regardless of the number of shipments.
  • Automation also allows you to track cargo, auto pick-up, insurance, etc. in real time and incorporate them into your order specifications, to ensure better all-around customer service.

Why Logistics Automation is Important

Typically, the process of warehousing or distribution involves the storage of stocks from suppliers and the subsequent shipment per customer orders. While many of these processes are undertaken manually, automation of these logistical functions revolutionizes the logistics process. Here is why automation of logistics processes is so important:

Automation of incoming goods

When incoming goods are marked with barcodes, it automatically notifies the automation system of their arrival. This helps in the scanning and proper identification of goods, which further ensures correct quality assessment and handover to the fixed machinery in the warehousing or distribution unit. It will help your system assign the goods to the appropriate conveyors, cranes, sortation system, or storage shelf.

Automation in dispatching

When the logistical functions are automated end-to-end, your automation system can efficiently assign outbound goods to appropriate dispatch units and outgoing stocks. Not only does this optimize the tasks undertaken by machines, but it can also reduce human efforts and costs. 

Automation in packaging and repackaging

Automation in process logistics can help with expediting packaging and repackaging processes, thus saving your company plenty of cash in human labor costs.

Automation of goods retrieval

Your automation system has the power to automatically locate and retrieve specific goods from your inventory when an order is received. It can then set up the product for shipment and delivery.

Workforce reduction

Automating logistics functions can reduce your workforce by a huge margin. Human input throughout your facilities and even the product life cycle can be restricted to only a few critical decision-making tasks. At the same time, the grunt work is undertaken by the automation systems. Further, a network of smaller automation systems can be put in place to make the entire chain of logistical functions work smoothly.

Logistics Automation

Challenges in Logistics Automation

As is true for almost all technology in today’s day and age, logistics automation also comes with a few disadvantages:

  • High implementation time: An effective automation system in logistics functions can take years to implement, which often results in low returns on investment, considering the cost of putting automation in place can be very high.
  • Low flexibility: Logistics automation often shows less flexibility in standardizing processes. This basically means that it isn’t yet possible to ensure absolute efficiency in all aspects of logistics processes using automation.
  • Low reach: Automation of the logistics process does not always encompass the automation of all other segments of your e-commerce value chain. Your product’s life cycle goes through several steps such as supply, inventory, manufacturing, packaging, distribution, customer service, etc. More often than not, all the players involved in these steps do not embrace automation uniformly, leading to breaks in the automation system.
  •  

Why Automating Logistics Processes Can Help Your Company Scale While Saving Money

  • Despite its share of disadvantages, automation of logistics processes has significant benefits that can help your company save a lot of money. Apart from reducing overall costs, automation of logistical functions can put in place systems that improve the overall efficiency of your e-commerce supply chain. This will ensure scalability for your business.

    More than anything else, automation reduces the cost of human labor. Automating repetitive processes such as data entry or packaging limits manual processes, thus saving your business a huge chunk of money that would otherwise go into hiring skilled labor.

    With your logistical processes automated, you can now develop high-functioning teams focused on decision-making and improving customer experience. Automation of process logistics ensures the reduction of human errors in repetitive logistic functions, and thus can help avoid the costs that follow from it. It saves your teams a lot of time and effort that would otherwise go into preventing or correcting costly mistakes.

    Customers are always on the lookout for the cheapest and most reliable options in e-commerce. Logistics process automation can increase the efficacy of customer-oriented processes such as transaction tracking, shipment status, etc. The extra layer of transparency thus added ensures customer retention. Moreover, your automated logistical processes will help you deliver to your customer faster.

    An essential component of your e-commerce value chain is shipments. Automation of logistical functions can give you real-time freight rates, which will help you plan for the most effort-optimized and cost-effective shipment strategies. You will be able to score competitive deals through appropriate data analysis, but you will also be able to make the best use of your resources.

    With all these benefits in your arsenal, it is clear that automation of logistics processes is meant to help your business grow. Automation will free you up to make data-informed, strategic decisions and help your business grow by reducing costs, automating repetitive processes, maximizing accuracy, and minimizing errors.

Conclusion

When applied to transport management, logistics automation is called a transport management system. It is a kind of logistics process automation that is specifically tweaked for the transportation industry. Transport management systems are essentially used for the management of freight processes. This includes freight movements, rating, selecting correct routes and carriers, managing invoices and payments, etc. Thus, in the transportation industry, TMS automates all the back-end logistical functions of the transportation value chain.

Automation of logistics processes has an application and utility in every e-commerce sector. In the current business landscape, smaller companies that have adopted automation stand a chance to compete against the big players. With the competition being cut-throat, adopting automation has become necessary for growth and scaling. An effectively implemented automation system not only ensures the smooth functioning of your logistics processes, but also ensures your supply chain works clog-free and is attuned to your business goals.

Sign up today and leave the logistics to us

Sign up and we will get back to you within 24 hours to discuss what services would be best for your business needs. Or speak with us now and tell us what you need.

FAQs

Given the current trend in automation adoption, the logistics automation industry is expected to increase at an exponential rate and transform businesses. The automation network is expected to incorporate robotics, AR, VR, automated vehicles, and more in the future.

RPA or Robotic Process Automation is the use of software robots or bots to automate digital tasks. Bots can be programmed to learn, mimic and execute business operations. They can even be programmed to learn and shadow human behavior. Apart from software bots, a range of robotics-based hardware components is also used in logistics.

Logistics operations move products across an e-commerce supply chain, i.e., from the manufacturer to a distribution center and then to the customer or end-user. Logistics processes include the management of inventory, orders, and shipping. 

Office automation refers to the data management network and systems that exist in an office environment. It includes all the different software, computers, digital networks, and cloud systems used to digitally collect, store, manage, transfer, and use information in an office to optimize task execution.

Supply chain automation refers to the use of digital automation technology to streamline supply chain operations. It is used to make supply chains more efficient, connected, and smooth-flowing. Supply chain automation usually comprises leading automation technologies such as RPA and AI.

Freight automation is the process of streamlining freight management processes through digital automation and advanced technologies. It includes processes like freight inventory, determining transit speeds and routes, appropriate shipment, etc.

Automated logistics refers to a network of automated processes that make the back-end logistical functioning of an e-commerce business more streamlined, efficient, and less dependent on manual efforts. Logistics automation uses digital software that controls machinery and simplifies digital tasks to boost efficiency and reduce costs.

Exclusive benefits to ace your e-commerce game this 2023 with Locad’s desk calendar!

Locad raises $11M in Series A funding
Free Locad 2023 Calendar!