E-commerce continues to grow every year. Last year saw one of the largest numbers of packages shipped during the holiday season and that number is of course only expected to increase. According to data published by Deloitte, e-commerce is expected to rise from $144 billion to $149 billion in holiday season sales.
This means that logistics companies will have to plan ahead in order to process and ship orders in time for the holidays. Sophie Thompson, director of solutions delivery at Catalytic, believes automation can be a helpful tool for logistics companies during this busy time. In this Q&A with Supply & Demand Chain Executive details how logistics companies can use automation to improve speed, accuracy and customer satisfaction during the holidays.
What kind of challenges do logistics companies face during the holiday season?
During the holiday season, volume is much higher across the board. There are more orders, more loads and more deliveries. In a time-sensitive industry like logistics, keeping up with that increased volume requires bringing on additional people to help manage the workload, increasing their costs. In fact, logistics companies often staff to meet demand during their busy season year-round, thus ending up with idle workers the rest of the year.
In what ways can automation help reduce some of those challenges?
Automation can help smooth variability across seasons by supplementing the work logistics companies are doing. By employing a bot side-by-side with employees, they can leave the high-volume, repetitive work that the holiday season demands for bots, while reserving the problem-solving and relationship management that accompanies it for humans. Automation also allows logistics companies to staff only for what they need year-round by filling in the gaps in the busy season. Automation can also work around the clock, better keeping up with increased demand during the holidays.
What are some things logistics companies have to change in order to accommodate automation?
Change management is always hard, no matter the cause. The first thing logistics companies should do is have a plan in place for what their business will look like after implementing automation. How will they better utilize their employees? What higher value tasks can they be performing? Can employees be upskilled to help build and manage the automations?
Logistics companies should also think about their current technologies and how they might need to be outfitted to better accommodate automation. For instance, they should think about building APIs for legacy systems that an automation tool might need to interact with. Their other productivity tools should also be set up to integrate with a new automation tool, to better connect disparate systems.
Logistics companies should also be prepared to communicate with their customers about the changes they might see and prepare them to better engage with automation. Automation is best supported when processes are standardized and repeatable - going through the exercise of transitioning all customers to a standard process will only simplify the implementation of automation and increase its benefit.
What areas of the supply chain will see the most benefit?
In our experience, we’ve seen the most impact early in the supply chain during load creation and scheduling. The quick turnaround time required to create and schedule loads and the unpredictability day-to-day mean this area of the supply chain is primed for automation.
How will automation change the customer experience, especially during the holiday season?
The holiday season is often riddled by delays and slow turnarounds. Automation helps logistics companies to maintain the same level of service and speed regardless of volume. While implementing automation is often a bottom line-focused activity, top-line growth shouldn’t be ignored. By improving and standardizing the customer experience across seasons, automation can improve customer satisfaction. Related, automation frees up employees from completing repetitive, time-sensitive work so that they can instead focus on customer engagement and growing accounts.