Digital automation in the transportation and logistics industry

This Transportation & Logistics (T&L) Insights series is based on research by Levvel, who joined the Endava family in 2021. The team surveyed over 500 U.S.-based companies who procure transportation and logistics services internally and externally to get their views on their challenges, needs and use of digital technology solutions.

While companies often perceive technology innovation to mean things like high-end robotics, artificial intelligence (AI) and fully autonomous vehicles, there are many elements in the supply chain that can be modernised without requiring great effort or cost, while still providing the competitive edge that T&L companies are looking for. In this series, we will present current industry challenges and how digital technology can help to reduce friction, enhance efficiency and provide a better experience for businesses and their customers.

Challenges to modernisation initiatives – and reasons to modernise anyway

Technical advances, growing consumer demand and labour shortages are pushing the transportation and logistics industry towards automation. Warehouses and distribution centres need and want to keep up with the demand.

According to Levvel’s research, 75 per cent of companies had implemented (or planned to implement) some warehouse and distribution centre automation initiatives. However, only 14 per cent reported widespread use of automation tools, and roughly 50 per cent of warehouses and distribution centres said that their automation capabilities were close to 0.

Several concerns are holding managers back from implementing new technology, including:

• Large upfront costs
• Concerns about maintenance costs and upgrades
• Training and retaining skilled personnel.

These are valid concerns, but digital automation can solve many problems that facilities face, such as:

• Managing inventory turnover, especially perishables that need to be carefully stored and quickly reshipped
• The increasing demands of e-commerce, especially during the pandemic
• Reducing strain on the workforce and improving their efficiency.

Even piecemeal solutions and small automation investments to replace legacy systems can result in a satisfactory return on investment (ROI). But the key is identifying which systems to modernise.

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