Importance of Digital Transformation in Transportation and Logistics
Digital transformation refers to the revolutionary changes that a business undergoes by adopting digital technology. Businesses leverage digital transformation to modify existing processes, incorporate new initiatives, adapt to a unique culture, or redesign customer experiences to respond to dynamic business scenarios and market demands. Digital transformation in transportation and logistics can help the industry benefit from the evolution of technology to get hold of a rapidly changing market, customer expectations, and other decisive attributes to gain a competitive advantage.
This blog post presents an elaborative view of the digital transformation landscape, outlining its importance, market estimates, and business benefits for the transportation and logistics industry. We will also discuss how digital transformation strategy fits into various use cases of transportation and logistics, giving companies in this sector a distinct edge.
Where is the global market for digital transformation in transportation and logistics today?
According to Statista’s latest report, the spending on the technologies and services that enable digital transformation worldwide is expected to amount to 2.3 trillion U.S. dollars by 2023.
Stats provided by Adroit Market Research and initially published in SBWire reveal that the global market size for digital transformation in transportation and logistics was valued at $54.92 Bn in 2018 and is anticipated to rise to $145.28 Bn by 2025 with a CAGR of 13.0% during the forecast period.
In leading organizations, 25% of overall spending will be devoted to digital transformation.
What makes the transportation and logistics industry a perfect candidate for digital transformation initiatives?
The transportation and logistics industry continually deals with severe challenges related to asset underutilization, supply chain efficiency, and connectivity and visibility across devices and systems. Digital transformation initiatives can create a robust platform to solve these problems. However, limited use of technology can affect efficiency, productivity, and market growth. As more than 50% of professionals working in the logistics and transportation sector have expressed the lack of necessary skills and expertise throughout the supply chain, companies have to rely on external resources.
Transportation and logistics must give extreme importance to efficiency, optimization, speed, and timing. Today, where almost all industries are experiencing a technology outburst, digital transformation is becoming a necessity for the transportation and logistics industry.
What areas of transportation and logistics can benefit from digital transformation?
Speed and Time
Speed and time are two of the most crucial factors for any industry, but they play the most disruptive role in transportation and logistics. High speed and minimal time are synonyms for competitive advantage for the transportation and logistics industry. Digital transformation initiatives with Robotic Process Automation as a component to automate time-consuming processes can help companies keep pace with the speed and time.
Ultra-connectivity among Devices
Digital transformation can be initiated to ensure hyper-connectivity among devices through the use of sensors and alarms. Internet of Things (IoT) enables such type of digital transformation, helping companies densely connect devices using sensors that send crucial and decisive information over a common network. This technological transformation gives physical things the ability to interact and communicate with other things as well as business users involved in decision-making. Moreover, closely connected devices also accelerate processes.
Intelligence in Business
With the digitalization of various transportation and logistics processes, data is growing big, thereby creating a need for state-of-the-art technologies such as advanced data analytics and business intelligence. Today, in a typical business scenario, decision-making has become commonplace. However, the intelligent decision requires support from Artificial Intelligence and Cognitive Computing based solutions. Digital transformations enabled by AI and Cognitive Computing empower the transportation and logistics industry to overcome various business challenges, including process optimization, supply chain management, end-to-end communication, cost control, and improvement of customer experience.
Visibility Across Key Factors
Big data comes with big challenges and big complexities. Unleashing the power of data requires efficient tools and technology. Logistics, transportation, and supply chain require a powerful digital transformation strategy for maximum visibility across factors that can affect decision-making. Data visualization and modern dashboards with self-service capability offer user-level digital transformation by representing a horribly large amount of data in a concise, meaningful, and pleasant form.
Health of Machines and Equipment
As transportation and logistics aim to make sure items arrive at the right location at the right time and in the best possible condition, it becomes imperative for all the machines and equipment to remain in service and do not wear out unexpectedly. Digital transformation, triggered by implementing innovative technologies such as data analytics, the cloud, and the Internet of Things (IoT) in combination with Machine Learning algorithms, is disrupting existing players.
So, what does digital transformation brings to the table for transportation and logistics?
It is not difficult to estimate that several digital technologies are making their way to transportation and logistics, helping it satisfy the critical needs of the industry, such as optimization, automation, efficiency, connectivity, and visibility. Digital transformation in transportation and logistics is enabled by technologies such as Artificial Intelligence, Cognitive Computing, the Internet of Things (IoT), Robotic Process Automation, and Big Data Analytics. In addition to the transformation caused by the penetration of such technologies, platforms that capture, store, or process information can also enable digital transformation, for instance, the cloud.
