How COVID-19 is driving digitalisation in the logistics sector

COVID-19 has put immense pressure on the global supply chain and logistics industry; triggering a digital transformation influenced by new customer behaviour, unpredictable demand, supply interruption, and restricted movement. 

Some businesses had already begun their digital transformation journey before the pandemic hit, providing them with a head start. For example, companies that were already using collaborative technologies before the pandemic were in the strongest position to maintain steady business operations when social distancing and working from home became new realities. Likewise, businesses that increased their internet and network capacity before the pandemic found it easier to connect to remote employees, customers, suppliers, partners, and other stakeholders.

On the other hand, companies that were using older systems or did not have a pre-existing digital strategy in place were under a lot of stress to quickly engineer newer, more agile, and resilient business processes.  

Overall, regardless of which category businesses fell into, they were all forced to adapt and modernise swiftly in order to keep their operations running. Below, we have explained how the transportation industry has been affected by the pandemic and what actions logistics companies need to take to stay ahead of the curve.

aerial shot of vehicles to show how covid-19 has increased demand – leading to more digitalisation in the logistics sector

RFID tagging to improve business operations

Generally, companies rely on models in order to predict demand patterns, company assets, and business performance. However, the crisis has rendered these models completely useless and organisations now need to identify new decision-support systems. These systems need to be able to capture and provide accurate real-time data in an unpredictable and fast-changing environment. 

Digital track-and-trace systems seem to be the answer for many, with Radio-Frequency Identification (RFID) applications, in particular, growing in popularity. In fact, a recent survey by  Zebra Technologies reported that out of  950 IT decision-makers at organisations across nine countries, 52% of companies are already using active RFID technology and a further 34% have plans to implement active RFID in the next few years. 

So what exactly is RFID technology and why has it become so important? 

RFID is a technology that enables data to be transmitted from a micro-silicon chip (tag) at very fast speeds and without the need for manual scanning – as required by barcodes. The tag is activated by radio waves emitted from an RFID reader when within a certain proximity. Once activated, the tag sends data stored in its memory relating to the item back to the reader.

The stored data is fed into IT systems, facilitating quicker planning and enabling businesses to locate their goods, monitor transit conditions, and manage their inventory through the use of digital dashboards. So, whether you want to track staff levels, operational compliance, or freight volumes; this technology makes collecting and organising data quick and seamless. 

RFID technology is demonstrating huge versatility in the transportation sector, enabling companies to manage their supply chain with unprecedented levels of automation and a vastly improved degree of control. With COVID-19 highlighting the value of rich data and real-time updates, we expect the adoption of RFID technology to grow even further in the next 12 to 24 months, and to continue being deployed once the pandemic is over. 

Rethinking supply chain management

Disruptions happen and usually supply chain organisations utilise risk management techniques to measure key risk indicators and prepare scenarios for unforeseeable uncertainties; such as compliance, labor, material, capacity, and financial issues. However, the coronavirus pandemic has presented a completely different scenario with implications far exceeding those of regular disruptions. 

image showing the inside of a distribution warehouse which shows several pallets of products. Highlighting how COVID-19 has increased demand on logistics and driven digitalisation in the logistics sector

Travel restrictions, shortages in labour and materials, as well as logistical challenges through tightened controls, and hub and border closures have put immense pressure on the transportation industry. 

In a situation like this, organisations have to focus on ensuring business continuity with existing suppliers whilst, at the same time, diversifying their supply chain and safeguarding against shortages. This demands a sophisticated solution linking supply and demand data sets across the company’s internal network, and across the supplier network. From there, organisations can then start measuring various scenarios and identifying where rapid intervention could be done.

Technologies that provide inventory visibility across the distribution network (e.g. distribution centres, stores, vendors, third-party providers, and wholesale inventory) offer major benefits for flexibility and transparency to serve customers in the best way possible given supply limitations. 

For example, if inventory is delayed when crossing the border, organisations can put contingency plans in place to address the issues and accelerate outcomes.

Following the COVID-19 outbreak, we expect that new versions of established digital tools will play a critical role in helping supply chain managers have an ongoing view of potential risks and provide frameworks to help take corrective actions to better serve their customers.

Navigating in a competitive environment

For the first time in history, in light of the coronavirus pandemic, logistics companies have realised the importance of embracing technological innovation and operating an omnichannel offering. This is happening due to two main reasons. Firstly, COVID-19 has led to a significant rise in e-commerce, with customers demanding new digital tools and solutions that enable immediacy, ubiquity, and self-service. 

Secondly, this change has been propelled by the emergence of new strong entrants into the logistics sector offering innovative digital platforms on the IoT. These new competitors are reshaping the freight business, and what they all have in common is the desire to match the supply and demand for transport services by means of a marketplace – via an online portal. By combining, for example, information about the truck, trailer, superstructure, driver, order, and product; the transportation and handling process is being significantly improved.  

In the face of such fierce competition, logistics companies must choose between the development of a new digital organisation and the digitalisation of a traditional organisation. On the one hand, the creation of a digital startup offers some advantages – they are usually faster, more agile, innovative, and more profitable than traditional organisations due to lack of legacy systems and structures. 

On the other hand, digital startups often lack the necessary industry expertise, partner organisations, and a solid customer base at the outset. 

But, regardless of which route organisations choose to take, one thing is clear – investing in online capabilities opens up global business opportunities to connect with customers and boost sales. 

The pandemic has served to expose the flaws of failing to develop your online presence and channels in parallel, and it is now absolutely necessary for logistics companies to take steps towards digitalisation. Because, as we navigate beyond the effects of this pandemic, it will be the businesses that utilise digital technology that survive the global disruption.

How can Stoneridge help with digitalisation in the logistics sector?

At Stoneridge, we aim to keep the logistics and automotive industry efficient, safe, compliant, and connected through the design and manufacturing of highly engineered electrical and electronic components, modules, and systems. 

As highlighted in this article, connectivity; from stock levels to fleet data; and efficiency; whether that’s handling industry disruptions, managing increased demand, or monitoring risk and compliance; are key. 

With rising demand on logistics companies off the back of growing e-commerce during the pandemic; there has been an increase in demand for truck drivers to deliver goods. The relaxation of drivers’ hours is something we covered in our blog ‘Advice for truck drivers during the Coronavirus pandemic’. Despite these relaxations, maintaining compliance with the new hours is essential for drivers and their overall logistics company. Not only for avoiding related fines, but also to keep employees from becoming fatigued and prone to accidents, as well as working efficiently; delivering stock on time, safely, and within the regulations stated. Breaches in regulation will lead to reduced efficiency and can be caused by a lack of connectivity between the driver data being collected and the logistics firm receiving and monitoring it – making streamlining that data more important than ever. 

In June 2019, The European Commission revised tachograph legislation and devised Annex 1C (EU 2016/799) – the aim of which was to make the manipulation of tachograph data harder, while also reducing administrative tasks and making control of the system more efficient. Stoneridge responded with the release of our own smart tachograph – the SE5000 Connekt digital tachograph. 

image of the Stoneridge SE5000 Connekt, our smart tachograph – a way in which we have responded to the increased digitalisation in the logistics sector

The SE5000 Connekt is the evolution of our industry-leading  SE5000 Exakt Duo² and builds on its success; offering real-time updates on driving and rest time, easy manual entry function, and working time directive calculations. But, ultimately, our tachographs allow you to ensure your fleet is efficient regardless of the rise in demand; keeping drivers within their legal hours, helping them adapt to any changes to their journey with ease, and optimising their time on the road successfully. 

When it comes to analysing and keeping on top of that data, we also offer download tools and tachograph analysis software to keep you connected. Our remote download solutions, like our digiDL, allow the easy downloading of drivers’ card data; giving you the ability to check in real-time that your drivers complied with the EU regulations. With innovation also being key as the logistics industry continues to digitalise, ease of access to that data is also important. Our mobile apps, Duo Mobile and Tacho Center, also allow your drivers to sync to their digital tachograph and manage all their tachograph data wirelessly – directly on their Android device. 

However, collecting and connecting that data means nothing for compliance if it cannot be analysed efficiently. OPTAC3 Tachograph Analysis Software is the trusted tachograph analysis solution for some of Europe’s leading transport and logistics companies – keeping your fleet compliant whilst saving you hassle, time, and money. OPTAC3 analyses the data collected and downloaded, and automatically checks the tachograph data against legislation. Displaying summaries and infringements in a way that’s clear and easy to understand – but, most importantly, easy to act upon.

With Stoneridge, you can collect the data, ensure it’s easy to access, and stay on top of potential setbacks to your fleet; keeping you connected and efficient. If you’re interested in finding out more about our range of products and services, you can visit the OPTAC or Stoneridge Electronics websites. Or alternatively, you can contact us today. 

Have you noticed a change in your logistics business, and its output, due to COVID-19? What measures are you putting in place to drive digitalisation in your own business? Let us know on Twitter by tagging us at @stoneridgeinc. If you would like to read more articles, on topics from new legislation to the best truck stops in the UK, browse our driver’s blog