Globalization has been one of the most productive and influential transformations our world has undergone. Businesses today can collaborate and deliver across continents, giving rise to ultra-competitive markets and super-efficient supply chains.

Over the years, we’ve come to depend on this interconnectedness to the point that we do not even notice it. Goods, materials, and products flow seamlessly across borders and organizations, promoting an interdependent economic ecosystem that continues to diversify and spread as we speak.

At the heart of this planet-wide web of commerce and trade is another, often overlooked phenomenon, called Logistics. Logistics is the activity of managing the transportation and storage of goods and services, and it is absolutely vital to the survival of any economy.

To give you an idea of this industry’s sheer scale and size: the global logistic market is estimated to reach $12,256 Billion by the end of next year. But despite being an extremely vital and an absolute juggernaut of an industry, logistics is arguably one of the most under-innovated sectors out there.

Industry experts speculate that the world of logistics is ripe for disruption and rapid innovation. While groundbreaking technologies like machine learning and autonomous robots might take a while to go main-stream, even current digital solutions, like custom software development, can bring about significant improvements worth looking into.

Digitization in the World of Logistics

With the rampant wave of digitization, most industries have embraced software in a way that has reinvented how they function. The rise of e-commerce has further underscored the need for fast-paced, digitized logistics.

While much of logistics had already achieved a certain level of digitization a while ago, switching over to spreadsheets from paper logistics was only the beginning. The true transformation though, has emerged fairly recently in the form of transportation and logistics management software.

Today the market is dominated by third-party logistics software as they have become central to running a logistics business. The global TMS market alone is estimated to be worth 4 Billion USD by 2025. The primary reason these software solutions enjoy the level of success they do is that they help companies address some of the key issues that plague businesses in today’s volatile markets.

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Major Challenges Faced by Logistics Companies

Almost every company in the transportation and logistics business today faces some serious challenges. For starters, industry leaders like Amazon have set up a whole new standard when it comes to customer expectations, both for B2C and B2B clients. Clients today have come to expect quick and smooth deliveries despite the fluctuating market, weather, and political conditions.

Add to that the ever-growing need to improve efficiency, speed, and reliability, and logistics companies really need to innovate on multiple ends to keep up. Beyond that, companies need to consider changing demands, fluctuating fuel costs, maximizing inventory efficiency, warehouse expenses, regional regulations, environmental compliance, and so much more.

Such volatile conditions are a direct product of today’s dynamic and evolving markets spreading above and beyond traditional limits. The world is innovating at an ever-increasing pace, and the logistics industry must deliver the same to avoid becoming a bottleneck for global growth. However, keeping up with such difficult market conditions with traditional methods is next to impossible.

Needless to say, it will be challenging to run and grow a business amidst such chaos. Luckily, almost all of these issues can be satisfactorily resolved by deploying a custom logistics software solution.

With growth and advancements in the software sector, custom software development services has become far more accessible and the go-to solution for most enterprises.

What Can Custom Software Do for You?

There is a lot a logistics management software needs to do. Core features include (but aren’t limited to):

Inventory Management

Around 43% of SMBs either track inventories manually or don’t track them at all. Thus, Logistics companies that offer their services to these businesses need robust inventory management solutions.

Keeping track of its inventory is vital to any logistics business. Being able to follow entire lots of goods and materials down to the individual items gives logistics firms the ability to maximize their efficiency, improve delivery time, save costs and operate at full capacity.

To achieve such precision at inventory management (on a consistent basis, bear in mind) is too labor-intensive and difficult of a task to be done manually. Logistics software specifically designed for your firm’s inventory can automate this vital task and free up your workforce for other tasks.

Fleet Management

Much like tracking inventory, it is cumbersome to track the constant flow of shipments, vehicles, and goods across your supply chains. Not only is the manual process inefficient, labor-intensive, and prone to human errors, but it can also quickly become a hindrance and roadblock to the smooth operations of your business.

When automated via software, the flow of goods and shipments can easily be traced across the entire supply chain. This allows logistics companies to have a clear and precise view of the entire supply chain at every given instant. Fleet management software solutions also help find the shortest, cost-effective routes for faster and cheaper deliveries.

As a matter of fact, 86% of fleets already use telematics systems to collect vehicle data, meaning most of the infrastructure required to utilize a custom software solution is already in place. However, only 23% of the surveyed companies conduct big data analysis or utilize advanced telematics features, leaving a giant gap a custom logistics solution can help bridge.

Read Also: Fleet Management System. How Keep Your Business Up And Running Without Draining Your Budget

Supply Chain Management

When equipped with critical inventory and fleet data, supply chain management software can make real-time decisions to help enhance the entire supply chain’s capacity and efficiency by many folds.

This is especially handy in today’s market, where we see a clear shift in traditional supply chains. Companies desire to cut the middlemen and reach directly to consumers, which helps them increase margins and deliver products at a reduced cost.

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Traditional methods drastically fall short when it comes to boosting efficiency, predicting and adapting to market changes, and being flexible to novel business models. Thus, it is critical to employ a custom software solution for a logistics business to ensure robust supply chains and avoid disruption.

Data Analysis

Much like any other industry, the logistics sector produces a ton of data that logistics firms can tap into in order to improve efficiency, flexibility, and profits.

Imagine being able to track trends and patterns within your supply chains to better predict market demands and behavior. Or imagine being able to track every metric individually within a complex chain to better identify inefficiencies, imperfections, and bottlenecks in your supply chain. Imagine being able to share detailed, real-time reports with all your partners, ensuring unheard levels of transparency.

All of this is possible by implementing clever data analysis via custom software solutions.

Order Management

Having access to real-time, accurate data allows for clever and efficient order placement. Rather than having to keep track of factors like warehouse capacity and transport availability manually, a logistics software solution can automate the tracking and even the order placement to ensure more orders can be accepted and on-going ones get executed.

Beyond that, software solutions can simplify order placement for both clients and businesses. Consider ocean carriers; according to a 2018 report by Mckinsey, only 6% of large-scale freight forwarders and ocean carriers had end-to-end booking facilities. This represents a clear lack of digitization which is something a custom software solution could address. Allowing clients to place orders digitally can result in more orders and thus greater revenue and help boost customer satisfaction.

Digital software solutions can also help businesses build error-free invoices and sales quotes while maintaining real-time rates along with each order.

Advantages of Custom Logistics Software over Traditional Alternative

We’ve seen how essential it is to have software solutions for your logistics business, but why should one opt for a custom software as opposed to widely available third-party ones?

Custom software can benefit a logistics business in a multitude of ways. Beyond a general level of automation and efficiency, which any typical logistics software can bring about, custom software can be tailor-made to focus on a firm’s specific needs allowing for even greater efficiency and specialization.

While third party transport management systems do exist as popular alternatives, they have their unique problems and challenges. Therefore, let’s consider the custom software’s advantages over off-the-shelf solutions below.

  • Full Compliance With Your Requirements
    When opting for third-party solutions, you are really getting a cookie-cutter-style product. Sure they’ll have most of the logistics features you’ll need, but down the line, it can get difficult to scale and customize them. You might also end up paying for extra options and features or miss out on certain critical ones even after having paid for the full product. In other words, you don’t get complete control over the functionality of your software.
    When you develop your own logistics software, you can ensure its compatibility with programs your core clients and customers rely upon. This is simply not the case with third-party software. When opting for an external solution, you’ve got no choice but to make do with the options they offer.
  • Advanced Security
    Relying on third-party logistics software to track and analyze your logistics data, implies sharing most of your organization’s data with the said provider. Although safe in most cases, sharing critical data is never the preferred option for most organizations and should be avoided whenever possible. Since many businesses use off-the-shelf solutions, normally cyber criminals target specifically on them, so if you deal with a custom solution, this option will be much more secure. Also, customized software is developed with security features that protect your unique process and data.
  • Cost Efficiency in Long-term Perspective
    Most third-party logistic software is available on a subscription basis. While the cost of developing a solution for your business from scratch can be a lot more expensive to begin with, custom softwares do become cost-effective a few years down the line, especially when the company scales and subscriptions start to pile up.
  • Greater Flexibility
    Experts believe disruptive technologies like AI, autonomous robots, blockchain, IoT implementations, etc., are bound to radically transform the logistics industry (if they aren’t doing so already). Any logistics company wanting to avoid obsolescence will have to invest in and implement these forthcoming trends. Building your own custom software, as opposed to buying a third-part solution, puts you in the right place to develop, test, and integrate these technologies yourself, rather than waiting for your software provider to do it for you.

Conclusions

Having a custom software solution for your logistics operations can boost your business on multiple ends. Considering especially how accessible outsourced software development has become. But to get the best in exchange for your time and money when outsourcing your logistics software, it is vital to collaborate with a seasoned team of developers with relevant experience within the logistics industry.

We at XB Software have a solid portfolio when it comes to delivering robust and tailor-made software solutions for the logistics industry. Having worked on multiple projects ranging from a Multi-modal Transportation Management System to an Integrated Scheduler Module for Efficient Task Management, we believe we have the right experience and expertise to deliver just about anything your firm might need. Check out our logistics portfolio, as well as what happy customers have to say about us on Goodfirms.

We hope this guide could highlight the immense value a custom-built logistics software can bring to your business. The industry today is ripe for disruption and innovation, and with a well-designed software solution, any logistics business can overcome the challenges and capitalize on the opportunities of today’s market. Please contact us if you wish to use our experience for development of your custom logistics software.