How important it is to digitize your logistics-based business?

Is digitalization better than traditional logistics business?

Transforming the traditionally operated business logistics business into online logistics services could help your business expand, creating awareness amongst the users and other stakeholders.

If it is an app-based logistics business, then it gets even more beneficial. People love to book their services in an app and get doorstep delivery.

Challenges faced by traditional logistics business

These are some challenges faced by the traditionally functioning logistics business;

• High expectations from the customers to get their products or services as soon as possible.
• A lower employee retention rate is one of the main causes in the logistics business.
• Workers swapping from one place of work to another is a crisis for a business owner due to more labor-intensive work and less salary.
• Too many safety regulations laid by the government. Implementing everything could cost more for the business.
• Manual billing could cause errors in the process.
• Freight documentation in the paper could mean one more skilled labor cost, paper cost, etc.

How does an on-demand logistics business work?

When it comes to any business, there are two things to remember to make it successful and worthwhile. The first one is the business model and the revenue model.

Business Model for the on-demand logistics business

An aggregator business model is considered to be one of the potential business models in the market for an online logistics business. The core purpose of the business model is to create a platform to connect the service providers and the end-users by providing the best and user-friendly features for them.

Revenue Model for the on-demand logistics business

When there is a business model in action, obviously there has to be some form of revenue to be generated. The aggregator form of business adapts more efficiently with the “commission-based” revenue model.

Here, the admin of the platform can receive a certain amount of commission from the end-users and distribute the earnings that the admin owes to the service providers.

4 steps to digitize your logistics business

When you plan to digitize the logistics business, these are the four steps to consider for better implementation.

Find your niche in logistics

Anything can be transferred from one place to another. Being precise about your business niche is important to plan further. These are some logistics based niches in the market that perform extraordinarily well;

• Plastics and chemicals
• Automobile
• Furniture
• Industrial manufacturing equipment
• Appliances and electronics
• Food and Beverages
• Pharmaceutical
• Petrochemical and energy

Pick one out of the lot or find something that might suit your expertise and market necessity.

Narrow down the operational difficulties faced

Operational excellence can be achieved only if the difficulties are acknowledged and discussed, finding a solution. According to supplychain247, “When companies digitize their logistics business, there is a 30% cost-cutting happening to enhance the profit margin”.

These are some of the procedure that can be followed to address the problem;

• Conduct a meeting with the stakeholders to find the problems at their end.
• Taking into account the investments when a traditional logistics business is digitized.
• Address the quantitative and qualitative transfer of goods and services - as the business has to manage all quantum after being digitized.

Features and functionalities you want for your on-demand logistics business

The features of the digitized format of the logistics business must be based on the niche of the business. Market research could induce ideas and initiate thoughts on choosing the right features and functionalities for your on-demand logistics business.

What features to consider for my on-demand logistics business?

There are actually 3 platforms involved when it comes to running an aggregator form of business model.

Features that an admin would want:

• Users management - The admin of the logistics business platform must be able to manage the users (both the service providers and the end-users) to have a handle over who comes into the platform.
• Admin Management - The admin can manage the service providers who register themselves into the platform, the notifications sent to the users, the promo codes and more.
• Booking Management - The admin will be able to check the booking details (Users name, the service they booked for, booking time & date etc). Also, if there are any cancellations and their reasons as well.
• Geo-fencing - This feature allows the admin to restrict the registrations of the end-users and the service providers into the platform based on location.

Features that an end-user would want:

• One-step registration - Users would love to register on a platform within three steps. Hence, registering via the phone number could be a feasible option. Also, to avoid fake registrations, using phone number verification methodologies can help.
• Live Tracking - Any end-user would want to track their booking anytime. This feature could help them find the transit passage of their booking.
• Schedule the service - The end-user would like to schedule the service on the platform and once they avail of the service they can pay for it.
• In-app chat - The end-user can communicate with the service provider within the platform itself via a chat box.

Features that a service provider would like to have:

• Cancellation reason - The service provider would like to state the reason to cancel the services booked by the end-users.
• Earnings report -Offering earnings reports could help service providers to track their earnings within the platform.
• Dynamic routing - The online logistics platform should offer an inbuilt map or integration to Google Maps to assist the service providers to reach the end-users location and the destined location easily.
• Payment receiving method - The service providers should be able to receive their earnings from the admin of the platform. It is a feasible option to add bank account details in the app to keep receiving the earnings without any hassle.

Identifying the appropriate software development resources

With all the features discussed above, there must be a software that can help you create an app like Uber for logistics that complies with all your logistics business requirements.

Outsourcing such services would give you an edge to concentrate on other factors of running your on-demand logistics business.

Importance of digitizing your logistics business

Lesser errors

When you digitize the process of logistics business, human errors while performing manual tasks can be avoided. Computers can centralize the goods and services moving back and forth. It can help you (the admin) pinpoint what, when and how something went wrong in the process.

Transparency

Digitizing the logistics business in the form of an app or a website-based operation can induce transparency within the organization. And it also encourages the end-users to book the services online, which increases efficiency in maintaining the process.

Hassle-free execution

The digitization method can help the admin of the platform to integrate the warehouse management, the management systems, and the transportation facilities to keep an eye on everything in one place..

For instance: A visually appealing and simple-to-use dashboard can help the admin to manage the logistics business more efficiently and effectively.

Data management

When people use apps and website platforms, they entrust you with their information. It will help the admin (which is you) to get a hold of the futuristic plans of the business.

Data will help not only from the business expansion point of view, but also in the operations of the business. The regular users can be given offers or discounts as they prefer your online logistics platform over the others.

No more labor-intensive tasks

When the logistics business runs based on technologies, you’ll need a minimum number of skilled workers rather than extensive unskilled laborers. This could be very useful in running an organization with a lesser cost of maintenance and labor.