"Digitization" is the most popular word when you are speaking about supply chain and transportation trends. We hear it everywhere. But digitization in real-life is not such an easy process as it seems. What are the main obstacles on the way to new-edge logistics? And how to overcome them and don't get mad?
There is a huge gap between current processes at the companies and their expectations of supply chain digitization profits. Most companies are staying on the first stage of digitization define it as one of the priority goals. 56% of companies expect digitization will reduce their costs and raise revenues. Another aim is to build a modern business model to win global challenges in the future.
Most European companies invest money in digitization. However, only 14% of companies proceed further a pilot project. According to the report of JDA/WMG's 'Delivering the Digital Dividend' report, only 179 or 13% of European manufacturers are ready for digitization of their supply chain right now. 31% of surveyed companies predicting they will have a prescriptive supply chain in place by 2023.
This minority who has managed to achieve real deployment of supply chain digitization gets real result of revenue uplift. So, obviously, digitization of logistics is a non-reversible process. And we need to think thoroughly on how to launch this process in real life and implement it effectively and not to die.
What are the main obstacles for going from a pilot stage to real deployment?
1. A gap between expectations and results.
As a rule, a pilot is a way to test functionality and check business hypotheses without huge investments of time and money. But quite often a provider doesn't explain to the customer that the pilot is not enough for amazing business results. There is a lot of things to do. Together a provider and a company should correct internal business processes, educate staff, adjust the system, follow the implementation strategy and so on. Without that understanding, the pilot stage often turns to disappointment for the company's management.
2. A software instead of provider and the business cooperative work.
Start digitization of logistics with software and abridged user's guide is not the best idea. Unfortunately, a lot of companies faces this challenge. As a result, the business uses it once or twice and then leave it because of difficulties and misunderstanding. In fact, only deep analysis of the client's business processes, detailed consulting and education on every stage makes the system useful and applicable for the business. The main goal of digitized system provider - is to manage expectations and be a guide on the way of internal technological revolution.
3. Realizing of "scope of disaster".
During the pilot stage, the client realizes the scale of the disaster. He realizes huge changes, that he has to make in all, without exaggeration, departments, processes, with all contractors and so on. Quite often when a customer realizes all obstacles that should be overcome he suddenly can understand that his company is not ready.
4. The gap between a business long term strategy and short term KPI's.
Often people who are responsible for launching innovations are out of touch with the following implementation. This implementation is made by other employees who are not motivated because innovations are just handed down. It is very difficult to make changes in well-established processes, especially if you don't really understand the reasons. That's way appears a serious confrontation to innovations inside the company.
We've made dozens of pilots and collected opinions from providers representatives and reinventors from client's companies. So here are some tips from our expert about how to overcome the obstacles and avoid disappointment in the digitization process:
1. A company should choose strong Game Changer – one person or several who are able to take responsibility to make changes in the company and who know the internal system very well. It could be an owner or a group of managers. This person should motivate and involve all departments of a company, it is a very important task - to produce a common aim for the whole company.
2. Involve and motivate. Every employee who is involved in innovation should understand why he is doing it and what benefits he will get. Up to the couriers! This motivation could be described and suggested by the provider.
3. Try not to be afraid of mistakes – new technologies are a risk anyway. During the process of digitization, it would appear that technology doesn't fit your company or some unpredictable problems could occur. It doesn't mean that digitization is impossible, it is only mean that there is a need for a proactive flexible approach and different hypotheses.
4. Don't expect the outcome in short term – the period of implementation and scaling can take not less than a year. Keep in mind that the process is almost an everlasting process and one revolutionary technology replaces another. But it is necessary to make accurate goals, emphasize checkpoints and follow them during the whole digitization process.
5. Chose a provider who will accompany you during the whole digitization process. Discuss everything together, arrange regular calls and meetings. Share all difficulties and issues and request for solutions. Involve your contractors and partners into the meetings and discussions. You should trust your provider.
As you guessed it, Atlas meets all requirements listed above. If you need more detailed consultation about the digitization process contact us