The purpose of this report is to outline the impact information technology has had on the logistics industry as well as survey the anticipated headways in the field. The use of information technology, which is the use of telecommunication and computers for various functions that include retrieving, sending, and storing information, has immensely affected the logistics industry. It has been the major drive and cause of the changes, whether progressive or regressive, in the logistics sector. Some of these include the reduction of operational costs, the colossal improvements on customer services such as communication and registering complaints, a realization of general high efficiency, reliable deliveries system, power up of all operations in the firms, and reduction in usage of resources, majorly, time. IT is also responsible for the newly created speed, comfort, and safety in the industry.
This particular topic has drawn the interests of many researchers over time, therefore, it has been subjected to a plethora of investigative work that purely tries to find the correlation between how effective IT investment is to organizational performance. The type of new information technology that technicians are coming up with is designed to fit into the already existing practices and policies. These research works coupled with the reports contribute to this innovation.
The current ongoing diffusion of e-business and ICT technology is the best example of the dynamics of the impact that IT has brought to the logistics industry. It has single-handedly ensured better mobility of both people and commodities. It is a potential enabler of change in both organizational and social practices, therefore, directly affecting the demand for transport in both spatial and temporal terms.
Not only has information technology influenced the logistics industry directly, but it has also managed to change its third parties, i.e., the logistics service companies. These companies play a bigger role than they used to as they are now entrusted in dealing with the acceleration and integration of both the physical and communication flows in the large chain of suppliers. IT has not only made this possible but further, contributed to the competitive scenarios of these companies.
Application of Information technology in the logistics industry
Transportation is a major or trivial part of the logistics industry. It is the core backbone of the sector as it determines the flow of goods in and out of the sector. The introduction of IT into logistics has directly boosted the ease of transportation. The technology has been spread towards all the parts of transportation namely: warehousing, logistic services, trucking, and freight rail.
In logistics, warehousing involves the storing of goods after receiving it and releasing as well as dispatch the shipment of them. For a long time, warehousing has been difficult to handle in terms of management and record keeping. The amounts of goods most warehouses receive make it increasingly hard to maintain physical records as well as count (Wills 117). The introduction of IT has reduced the inefficiency of most warehouses by directly contributing to their activities such as the reduction in the large amount of paperwork. The records are mandatory in order to keep track of the movement of goods into and out of the warehouse. IT has made these records easy to not only keep, but also retrieve it at will. Among other impacts of IT on warehousing, include increased safety and security of the goods, minimizing time when locating inventory, and real-time dispatch.
Large logistic companies use trains to transport cargo mostly because of the huge volumes of goods they transport. Information technology has contributed to efficiency as it helps in and during the leasing of the specific containers, also offloading as well as loading. The use of IT also ensures cargo security during transportation (Lowe 240).
The roads and trucks are used to transport the goods in question over medium and short distances. Road transport is subjected to a lot of risks such as accidents, loss through theft, and abrupt fuel shortages (Handfield 89). IT has stepped in and solved most of these problems by introducing trackers hence curbing theft and monitoring the movement of the goods. It has also aided in the management of fuel as well as health and safety management. IT has also immensely effected on the cutting of expenses such as insurance costs because of reducing the risk of disappearing of goods.
Inbound and outbound transport administration, armada administration, warehousing, material taking care of, request satisfaction, logistic system plan, stock administration, supply and request arranging, outsider logistics management, and other bolster administrations.
Communication in any business is paramount. Customer satisfaction is the only way businesses can retain clients or make a profit. Their reviews and feedback also greatly help in improving the services and commodities provided by companies. A while back communication between the respective logistics firms and their clients was strained due to distance and inconveniences caused by lack of time. IT has made communication easier and faster. The clients can simply call or email the firms to place orders or make inquiries.
The information has not only helped the communication between firms and their customers but also within the companies themselves. It is easier for employers to communicate with their employees and vice versa.
One of the major changes introduced to the logistics industry is Electronic Data Interchange. This process facilitates the transfer of information from one device, for example, a computer, to another. Some of this information includes cheque, challans, and invoices. The best way to describe this technology is “paperless document transfer.” EDI has helped in reduction of costs since companies that rely on paper have now found cheaper alternatives, increased the speed of all transactions, and cut down on the time cycle and inventory. This has improved the competition.
Integration and flexibility
Flexibility in a company is critical. The ability to adjust helps the firm cope up with the current trends. Without the ability to adjust, the company is immediately knocked out by competitive firms out of the industry. If information is successfully integrated, it automatically becomes a powerful enabler for increased productivity within a firm, reduction of overall expenses of the company’s activities, and directly improves customer satisfaction.
Most firms have now implemented advanced transaction systems. The integrated systems have made monitoring of the activities of all the branches of the firms manageable. There is real-time visibility of activities; there is a demand for the forecast information and finally provides production schedules with no inconveniences.
Inventory network frameworks must be fit for being adjusted to meet changing requests rapidly and cost-adequately. Most production network frameworks have been founded on particular arrangements offering the capacity to include and correct modules as required. Typically, such bundles are comprised of twelve or somewhere in the vicinity modules at most. This applies because of the size and extent of singular modules. This way, it deals with the programming outline that may not give the level of adaptability required.
The modules that are used in the logistics industry must be the smallest size for effectiveness in handling and control. This is the only way that the maximum flexibility can be achieved or reached. Information technology has made this possible. The modification enhances the effectiveness of the supply chains, and the companies can meet maximum demand as possible thereby, making profits in the process.
Enterprise Resource Planning
Many industries and firms view this system as the core of IT infrastructure. It has been described as heaven-sent as it makes everything tremendously easier. It captures data, a process that most companies find very necessary. The IT tool greatly reduces manual tasks and performs most tasks that are financially related. This reduces the need to employ a lot of employees and directly saves time, as the system is very fast and accurate.
The EPR system accomplishes an anomalous state of coordination by using a solitary information model, building up a typical comprehension of what the common information speaks to, and setting up an arrangement of standards for getting to information (Handfield 432).
The information distribution center is a United database kept up independently from an association’s generation framework database. Numerous associations have different databases. An information distribution center is composed of educational subjects instead of particular business forms. Information held in information distribution centers are time reliant; verifiable information may likewise be amassed.
It is are most unmistakable in the look at the counter of general stores. This code determines the name of the item and its producer. Different applications are following the moving things, for example, segments in PC get together operations, vehicles in getting together plants (Stair 518). This, by default, enables the logistic industry firms’ track their goods on a global scale therefore, they can retrace what has been legally stolen from them. This reduces the losses they incur, unlike the past.
Benefits of IT application in Logistic Industry
There are so many benefits that have popped up due to the application of Information technology in this industry:
- Suppliers are now able to connect and interact with other logistics firms on a global scale. This is known as streamlining. It increases the innovation of the industry and the efficiency of firms.
- The logistic companies can also make a reasonable connection between the services they offer and what their clients need or require. Like any other relationship, firm-customer communication is mandatory for the improvement of services offered and maximization of attainable profits.
- Information technology has made analyze and assertion the supply chains better and much more efficient. It has made it possible or companies in the logistics industry to carefully evaluate the type of chain that best works for them depending on the clients they deal with and also the type of goods they supply (Buttle 321).
- IT is the main backbone of synchronization. In order to manage a lot of firms spread out all over the world, synchronization is mandatory. By connecting all the business and giving them a central base that can be used for evaluation and monitoring, IT has made it significantly easier and less tedious. The firms in the logistics industry are now able to synchronize the whole process starting from the ground roots, which is batch production and link it further to managing the capacity of the vessels and the flow of the goods (Button 67).
- IT has also made communication and also close collaboration between firms in the industry easier. This has been effective as they have, over time, successfully complement, or substitute each other making themselves self-efficient.
- The technology has also contributed immensely to the creation of new supply chains. The logistics industry relies on the innovation of supply chains, hoping to make them shorter and faster. IT has enabled the industry to design better chains than the already existing ones, therefore, increasing the efficiency of the firms in question.
- Transformation is a dire part of the business. The world is constantly changing thanks to innovation and technology. People’s needs change by the hour. IT has made it possible for the industry to keep up with the changes, therefore, constantly changing to meet the new demands of the general public or clients. The new efficiencies make it possible for the changes to begin from ground level example warehouses.
- IT has created a new understanding of how the process of logistics works. Managers and interested parties can easily access the firms’ files without having to go through countless files. The ability of information technology to compress information, store, and make it easily accessible or retrievable has immensely helped in better understanding of the processes.
- Information technology has also played a huge role in ensuring there is the maximum realization of profits as well as maximum efficiency in the firms. The advanced or higher ability to billing, costing, and invoicing, has enabled the industry to achieve maximum profits.
- Finally, IT has enabled the optimization of the fleets up to day-to-day level. The performance has been outstanding and has greatly improved the satisfaction of the majority of the customers of these firms.
Negative Impacts of Information Technology on Logistic Industry
With the primer of information technology, there has been a great change in the employment sector. In as much as it has had its benefits in the industry, IT has brought a need for change in the employment sector. There is a new requirement for specialized support staff and new training for the existing employees. This creates a redefinition of the jobs that existed. The training costs money, as the firms have to foot the bills for their employees to be trained on the use of technology. The companies also have to pay for the new support employees that have to be present to ensure the smooth running of all the new technology in the workplace. This increases the overall cost of production of the industry.
The security of information is also not guaranteed. The pro technicians can hack and retrieve a firm’s documents and files that are confidential. They can use them to steal their supply chains or ideas, to embezzle funds amongst many others. The workers can also access information that is not meant for them to find out, for example, the salaries of fellow employees or the general income of the company thereby raising conflicts within the workplace.
IT comes to a lot of pressure to adapt and keep up. This can directly affect the mental state of the employees causing depression and unnecessary anxiety. This will affect the output and performance of the employees. The worker’s mental health is one of the keys to a successful business and once compromised the firm’s operation is immensely affected, and regressive steps are made. Researchers have presented IT as one of the key factors that lead to the inefficiency of workers.
The world is reducing in size or shrinking due to the growth rate of technology. The clients from all sectors are becoming more demanding of their satisfaction by the day. The rule is becoming quite simple, either to join in or get kicked out by competition. Information technology is a viable resource for the logistics industry. It has been carefully integrated into the industry that the firms have incorporated to become part of the supply chain. The changes that are undergoing in the society on a daily basis have fixed IT to be either a crucial strategy that is required by all the firms or competitive advantage to those who have already heavily invested in it.
Through the escalated utilization of Logistics’ ICT, to be specific, procurement, correspondence, and identification advancements, the data streams are, productively, utilized by firms, all together to reinforce the existent upper hands, or on the contrary, to make new competitive advantages.
IT plays a role in shaping how human beings communicate with each other, how they get their daily jobs done, and how they spend their leisure time. The logistic firms have to expand beyond their comfort zone and peripheries, and this is not possible without the implementation of IT. In order or companies to succeed, they must be able to implement it in order to compete favorably.
Despite its disadvantages, information technology is the only chance that most firms can rely on in order to keep up with the new global trends.
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