Contents:
- Complexity as a barrier to digitalization
- Collaborative partnership: #collaborativelogistics
- Practical example: The furniture industry
- Proven, measurable success
Warehouse automation, efficient transport capacity utilization, complete transparency through IoT tracking across all shipments, and digital, paperless coordination for all deliveries. We in the logistics industry all have a clear picture of how logistics will evolve through digitalization.
Yet the reality is different: logistics is the industry laggard when it comes to digitalization. The Digitalization Index from the Federal Ministry for Economic Affairs and Climate Action even shows that digitalization in the logistics sector has been in decline since 2020. Despite having a precise vision of the future, we are heading in the wrong direction—toward "analogization."
Watch now: The digital future of our logistics - #collaborativelogistics
Email, phone, and fax still account for 80 percent of coordination methods regarding deliveries. The remaining 20 percent consists of various digitalization measures, which often face significant resistance from delivery partners such as suppliers and freight forwarders when new processes are introduced. As a result, we are seeing dissatisfied staff across the entire industry. It’s no wonder, as employees are the ones who have to pay the price for these inefficient processes through overtime and chaotic daily operations.
So, we know exactly where we need to start. And yet, our industry is the furthest away from the goal of digitalization. The question is, why?
Complexity as a barrier to digitalization
Without a doubt, logistics is one of the most complex business functions. On average, it has to coordinate 120 different delivery partners. This includes the company's own customers, suppliers, internal or external freight forwarders, and even 3PLs. And that’s not all: within the company, logistics also has critical interfaces with purchasing, production, sales, and, of course, supply chain and transport management.
If we want to integrate a new digital process, we must take all these stakeholders into account. This is nothing new. In the past, problems were analyzed, identified, and then formulated into requirements for delivery partners and all stakeholders using a #topdown approach.
The result was the implementation of a new tool that created more hurdles than incentives for delivery partners. This one-sided optimization meets with resistance from all partners, especially since each of them is backed by a network of 120 companies on average.
Because we in logistics are dependent on all our partners and major digitalization projects cannot succeed in isolation, we are currently trailing behind in digitalization. The goal is moving further and further away.
The good news is that there is a solution.
Collaborative partnership: #collaborativelogistics
Together, we should establish simple, digital processes that offer added value for every link in the supply chain. This is the only way we can master digitalization. In our experience, this type of genuine collaboration not only promises the highest adoption rate for a new process but also maximum overall effectiveness. We call this Collaborative Logistics.
At TradeLink, we embody this collaborative approach and have created the simplest and most effective way to coordinate truck deliveries. As a TradeLink customer, the productivity of your staff and logistics facilities increases by up to 30 percent, while simultaneously boosting employee satisfaction.
For our customers, this means full transparency and visibility across all goods movements, right through to procurement. This is how we reduce costs for manual coordination, waiting times, demurrage, and overtime by over 90 percent.
For our customers' delivery partners, collaborative cooperation means maximum simplicity: software that is adopted by all delivery partners thanks to its collaborative approach and intuitive handling, while also creating added value for them. Delivery partners benefit from access to delivery information and status updates, and all parties reduce their administrative burden through effective automation.
Case study: The furniture industry
The fragmented furniture industry in German-speaking countries generates an estimated 20 billion euros in annual revenue, consists of approximately 8,000 production and retail companies, and handles around 10 million truck deliveries each year.
The complexity of logistics is clearly illustrated by the example of Steinpol, an exclusive manufacturer of upholstered furniture with 8 production sites and around 3,000 employees. As a supplier, the Steinpol logistics team coordinates nearly 5,000 deliveries per month for its customers. 80 percent of these deliveries are coordinated via email. In addition, there are more than 20 notification portals—some of which were custom-built by the customers themselves—that Steinpol is required to use.
For Steinpol, this situation results in highly complex route optimization, with up to 120 minutes of processing time required for a single delivery coordination. This type of manual, one-sided delivery coordination currently ties up a team of 20 people. Let’s be honest: Steinpol is the perfect example of shifting the problems of an inefficient delivery process from the customer onto their delivery partners.
Steinpol is one of the suppliers of our customer Hofmeister, which invited all 130 of its suppliers to TradeLink in a very short time and is now actively using the tool for notifications and collaboration. The fascinating thing about this example is that Steinpol, as a supplier, proactively spoke up about how simple and valuable a partnership-based exchange via TradeLink is.
This is how Logistics Manager Jürgen Höwner approached us on behalf of his team:
“With TradeLink, the notification process is so simple and transparent. We wish all our customers worked with TradeLink” – Jürgen Höwner, Logistics Manager at Steinpol
On the other side, TradeLink customer Hofmeister is happy because they convinced all their suppliers and freight forwarders in no time at all and have digitized and automated their delivery coordination:
“It’s a great win-win situation. Simple coordination, less downtime, and significantly better logistics management” – Sezer Özkökkaya, Logistics Manager at Hofmeister.
It is clear, therefore, that #collaborativelogistics offers added value for all parties, leading to high levels of acceptance within the transport network.
Proven, measurable success
Still not convinced? McKinsey & Company recently conducted a study . They compared companies that continuously improve their coordination processes through partnerships against those that rely on isolated solutions. Companies that choose a collaborative approach are generally 10 percent more profitable.
Especially in times of cost-cutting, there is no topic more exciting or relevant than profitability. So, instead of bringing up cost increases in your upcoming year-end reviews, you could use them as an opportunity to discuss process optimization that increases value for everyone involved. Why not call it Collaborative Logistics?
