About a week and a half ago, we had an amazing guest blogger, Progressive Automations, give their thoughts into why Automation systems were the future of industrial automation. In the blog post, they touted that “movable and compact” were the type of systems we will see as the future of industrial automation. Sticking with the theme of automation, today we will focus on logistics automation. Now, automation, or automatic control, in general is known as the use of various control systems for operating equipment such as machinery, processes in factories, boilers and heat treating ovens, switching in telephone networks, steering and stabilization of ships or aircraft and other applications with minimal or reduced human intervention. Some processes have been completely automated.
The biggest benefit of automation is that it saves labor, however, it is also used to save energy and materials and to improve quality, accuracy and precision. This same principle of automation, to decrease labor time spent on manual entry say, for example, in the process of planning the movement of procured and sold goods in the supply chain, also known as logistics, helps decrease costs and impact the bottom line, all while decreasing error and improving overall customer service. But, before we get into the benefits of logistics automation, let’s first define it.
What is Logistics Automation as It Applies to Transportation Management?
When we talk about logistics automation, we are speaking about all of the automation features available in the technology of a Transportation Management System (TMS) to manage your transportation and freight departments. Going back to the definition of automation, we view logistics automation as the decrease in manual entry of processing freight shipments and the automatic retrieval of options in the procurement of transportation for your freight. Furthermore, logistics automation in a TMS will provide automatic notifications and real time updates of freight information.
6 Benefits of Logistics Automation in a TMS
- Decrease in Costly Errors: Logistics automation features such as integration to your commodities via your ERP system and access to your address book, as well as automatic storage and entry of fuel surcharges and accessorials, will have you never again worrying about keying in the wrong information. These kinds of manual data entry errors will lead to increased shipping costs such as having to pay for shipping twice or paying a higher freight rate due to entering an incorrect commodity freight classification.
- Availability of Transportation Mode Choice and Real Time Freight Rates: To combat rising transportation costs the logistics automation features in a TMS makes it easy for users around the country to execute policies that deliver immediate freight savings. That means the TMS application is built with a state-of-the-art web services architecture, in order to receive live carrier rates over the Internet. No more theoretical savings, but hard ROI based on live, vendor neutral access to real-time market rates. When you have multiple carriers to choose from based on cost, transit time, and insurance, it empowers you to make the best choice for your specific shipment, thus saving you money over the long haul.
- Increased Customer Service: How much does it cost for you to LOSE a customer? With logistics automation features in a TMS such as real time freight tracking, auto pick-up, proper insurance and freight accounting built to your custom specifications, you and your customer are empowered to know exactly how much the freight will cost and when the freight will arrive at it’s destination through automatic notifications.
- Access to Real Time Freight Data and Analysis: When you have access to real time freight data and the ability to run reports, you are better served at making better business decisions based on your trends and history. For example, you may find out through the data that 80% of the time you picked Carrier “A” because they were the least cost carrier, but you find out in the data that that carrier is late 20% of the time, causing you to create a stigma of bad customer service. In the long run, creating such a bad stigma so you can save money on the front end of shipping, could hurt you over and above the freight savings by not being able to gain new customers or possibly losing customers. Access to valuable data at your fingertips with the push of a button empowers you to see the total cost of your decisions and mitigate future expensive bad decisions.
- Organizational Control: With logistics automation features in a TMS you are able to regain control over freight management, freight costs, and risk, by using the TMS’ rules engine, which is based on optimized plans and routing guides. A TMS is flexible enough to accommodate custom company business rules, yet powerful enough to force all users, both internal and external, to follow the policies that ensure efficient and cost effective shipping. The system’s usability must be such that controls can be designed and implemented by logistics experts with decades of hands-on experience in logistics, rather than by computer technicians.
- Scalability and Speed: With such powerful logistics automation features in your TMS there are no additional resources needed to manage your logistics, freight, and transportation departments, even as your business grows and ships more freight. As your company grows and ships more freight, a TMS allows you to easily input new users into the system and manage them easily. Furthermore, with a great freight accounting automation feature within the TMS, all freight invoices can be consolidated into one weekly invoice, no matter how many shipments each location has, making your CFO or controller’s job much easier to manage!
Automation at it’s finest, and when employed correctly, drives many benefits to help a company’s bottom line. Whether it’s automation in the way of robotics on the manufacturing floor, or automation features which eliminate manual process, or automation features that give you information seamlessly at will, one thing is for sure, automation in every industry is on the rise. Logistics automation in a transportation management system surely helps drive efficiency, eliminate waste, and most importantly helps save money in your transportation department. How have you employed automation in your every day life and in your workplace? Let us know in the comments section below!