The importance of process innovation within the logistics sector

Behavior changes within consumers derived from the pandemic have been very marked and are here to stay. To illustrate the point, according to data from the Association of Banks of Mexico (ABM) In our country, during the year 2021, 1,627 million online transactions were carried out, compared to 931 million in 2019, which represents an increase of 75% in two years. Taking these factors into account, without considering the other major changes at the macroeconomic level that are taking place in regional supply chains, these represent a great challenge for companies in the logistics sectorbut, above all, a great opportunity to evolve the way they deliver their products or services to said consumers.

The process innovation It is key to adapt and strengthen in the face of these changes within the environment and to be able to have a focus within organizations that generates multiple benefits, including:

Impact on the income statement – “Higher Revenues” after generating the ability to be closer to the market, more customers, more products, less time in the sales cycle and better user experience. “Lower Costs” within an organization due to having more automated and fluid processes, optimization of manual tasks, interconnected information and fewer errors due to re-entry of information

  • Improvement in decision making – The competition that currently exists between companies forces companies to make decisions in the shortest possible time. Through the use of innovation, detailed and updated information can be obtained to evaluate it and choose the best alternative in a certain action while generating flexibility to anticipate and respond to demand peaks without increasing installed capacity.
  • Territory protection – In today’s competitive environment, few industries will remain intact, as new players, possibly “born digital”, may pose a threat to the continuation of existing businesses. You always have to be innovating to seek the long-term permanence of the company.
  • Regulatory Compliance – before authorities and transversal legal requirements, for example, the protection of personal data. Process innovation should achieve the double objective of generating an impact on the income statement, while not neglecting regulatory compliance.

When we think about innovation, perhaps it automatically leads us to take into account technologies that can be of high value for processes, such as Artificial Intelligence, Blockchain, IoT, Automation tools and Data Analytics, etc. However, process-focused innovation encompasses more than is currently used in terms of available technologies, based on a strategic analysis of the current situation, and the design of the desired optimal solution, clearly mapping the gaps and obstacles to reach it. Next, the activities to be carried out must be prioritized, identifying effort and impact in order to establish an adequate roadmap for process innovation.

From a tactical point of view, it is recommended to use automation and digital transformation platforms and tools that allow us to leave behind the use of physical documents, digitizing end-to-end processes, interacting with the organizations’ central systems and databases. applications are generated with which the mobile and field workforce can interact in a natural way, providing visibility to customers and consumers, avoiding duplicate data capture efforts which can generate errors, information desynchronization, which implies excessive processing efforts of information.

The competitive environment is adapting as well, according to data from the Inter-American Development Bank (IDB)two out of three companies in the logistics sector in Latin America already have a digital transformation strategy. The challenge is how to put this strategy into practice efficiently and forceful to take advantage of the wave of the consumer in conjunction with the technologies already available.

The transactional processes of companies in the logistics sector are the backbone to guarantee their success and sustainability in the short and long term. Constantly reviewing the state in which the processes are kept, and rethinking them in light of best practices and technologies available in the market, can be a good starting point to challenge the the state in which and seek to drive organizations to a more digital, more automated and above all more innovative state, which allows companies to generate efficiencies and differentiate themselves from their customers, guaranteeing their permanence in the long term.

I invite you to review my previous collaboration: Process automation, a key factor for profitability

Guillermo Oropeza is co-founder and director of innovation and business development at DocSolutions, a service company for the automation of validation processes and information management. He studied Mechanical Engineering at MIT (Massachusetts Institute of Technology), has a master’s degree from the same MIT in Mechanical Engineering Sciences; He has collaborated for companies abroad such as Visteon in Indianapolis, United States, and in Mexico he was part of the Boston Consulting Group.

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