Big brands and logistics players are heavily investing in tech and automation — and it’s paying off.
Walmart, after re-working its shipping strategy to compete with Amazon Prime, recently posted fourth-quarter earnings that exceeded analyst expectations with $138.8 billion in revenue and a 43 percent surge in e-commerce sales.
This is an especially exciting case because, over the last several years Walmart has been striving to overturn its perception as Amazon’s little brother in e-commerce – the slower, more expensive, and less convenient option for online shoppers. By investing in tech to create a more affordable two-day shipping service and expanded grocery pickup and delivery business, the retail giant is well on its way to giving Amazon and other established grocery delivery services a run for their money.
On the carrier side, UPS is chasing growth and better customer service through automated facilities that increase capacity and make shipping and fulfillment much more efficient: 70 percent of UPS' ground eligible volume went through automated facilities last year, and the company expects that figure to reach 80 percent in 2019.
It’s undoubtedly an interesting time for logistics and while it’s fun to watch the battle for market share, it’s even better to take notes.
The reality is that automation doesn’t just help the big guys: 72 percent of companies are seeing the value of tech and are increasingly ready to implement. So, how do companies big and small leverage the tools at their disposal to achieve the same type of success as UPS and Walmart?
How digitization powers the leaders
The first step in competing with services like Prime’s two-day shipping requires investment in AI and automated workflows to bring new levels of efficiency, collaboration and cost savings to the logistics process. It’s nearly impossible to drive the level of innovation exhibited by UPS, Walmart or Amazon with the way most supply chain and logistics data is housed today: disparate systems make it incredibly difficult for companies to visualize information, let alone analyze and act on those insights.
Centralizing data from Excel spreadsheets, email, instant messaging, BI reports, bills of lading, pdf documents and more is foundational for any modern logistics strategy. After this critical visibility is established, it’s much easier to build automated workflows that enable teams to easily exchange this key shipment information and collectively troubleshoot common inefficiency issues – such as customs holds or missing documentation -- that get in the way of meeting speedy delivery expectations.
From there, AI-powered algorithms take logistics efficiency to a whole new level by automatically predicting potential obstacles (delays, service quality issues, stock-outs and more) and triggering an automated workflow to remedy the situation before a problem even occurs. It can also remove mundane and repetitive tasks, allowing logistics teams to focus on moving strategies and projects forward, like making affordable two-day shipping possible, for example, that drive value and competitive advantage for the organization.
Without the core of data visibility, automation and multi-party collaboration in place, it would have been impossible for Walmart to know where or how to invest in its logistics process to compete with Amazon, let alone drive the level of efficiency it needed to offer the same level of delivery service at a lower price point.
Maintaining a competitive edge requires being proactive, predictive and decisive – none of which is easy to accomplish without data and understanding what’s happening in the logistics network.
Taking even seemingly small steps in your digitization journey today can have a huge impact down the road. Learn more about the use cases and benefits of leverage AI in supply chain and logistics from our CTO, Raj Patel.