When operating in a highly competitive and rapidly evolving business world, companies must comply with the challenges of the time. In particular, the advancement of online selling and overall e-commerce has induced significant competition in the delivery and quality of products. This tendency has triggered a wave of technological advancement in logistical software to facilitate different aspects of the logistical management of goods and services.
Moreover, globalization issues and international business operations have challenged the borders between countries and have involved multiple communication and transportation means that allow for obtaining better logistical results. Despite such a dramatic development of the sphere, there are significant challenges that organizations in various fields of expertise continue facing due to the lack of opportunity to implement new technologies or due to other external factors. This paper is designed to overview the common logistical issues organizations face, their reasons, and the ways they can be addressed.
Logistical Issues Overview
When identifying the problematic areas related to the logistics of organizations, it is necessary to identify both general tendencies in the sphere and particular issues specific to organizations in different sectors. On the one hand, the continuous need for access to updated logistical software is a common concern of the majority of entities. Indeed, digitalization is currently a driving force in the sphere of logistics.
On the other hand, some process-specific issues include planning, agility, green logistics, delivery complexity, risk management, and others. Dealing with these challenges in an effective and timely manner is essential for successful and competitive organizations since efficient logistical systems ensure performance excellence. According to one of the recent surveys conducted with logistic companies, properly managed logistical processes “can impact up to 41% on employee productivity” (Duran, n. d., para. 1). Thus, the overview of some of the most common challenges in logistics provides an opportunity to generate relevant solutions for the continuous improvement of operations for better business outcomes.
As in any organizational process, in logistics, planning plays a central role since it predetermines the allocation of necessary resources and efforts at the stage of preparation for the actual business performance. While manual planning is no longer an issue with technological advancement helping organizations in this area, the efficiency of timely change in plans and exchange of information about it remains problematic.
According to Duran (n. d.), “constant updating of the planning, as well as access to it from any point, is essential for the optimization of the processes” (para. 4). This challenge is particularly relevant to organizations that operate in hectic economic environments or have unstable supply chains. Their planning procedures depend on an excessive number of factors, which hinders the predictability of events and requires developing more detailed action plans. However, on a general scale, efficient planning using the latest technologies is the need that most organizations require in terms of logistics.
Agility concerns constitute another significant challenge in logistics that modern organizations encounter. Overall, agility implies the ability of a company to adapt to changes and quickly respond to the shifts efficiently and productively maintaining the company operations stable. As Duran (n. d.) stated, the lack of agile procedures in the logistics sector is a significant concern for contemporary businesses. In this regard, the application of enterprise resource planning software is considered to be helpful. Indeed, to overcome this challenge, organizations should “boost productivity and efficiency using an ERP software that reacts quickly and can optimize processes” (Duran, n. d., para 5). Thus, technological advancement is key in yielding positive results in achieving agile development of organizational logistics.
Importantly, the environment in which a company operates predetermines the opportunities for agile growth in logistics. According to Brdulak & Brdulak (2021), such elements of the contemporary technological environment as “innovation Industry 4.0, automation, robotization, electric cars, car hybrids, drones, long road trains,” and others constitute practical, logistical solutions (p. 8).
This technological diversity allows for obtaining more options for dealing with obstacles and finding effective solutions through the shift between alternative tools and means of delivery. Moreover, the development of Internet commerce, “increased use of mobile devices, trading platforms, logistic platforms, modern warehouse management systems” trigger new consumption trends in customer population, which necessitates companies’ continuous adjustment through agile procedures (Brdulak & Brdulak, 2021, p. 8). Thus, when addressing the agility-related challenge in logistics, organizations should incorporate the latest software solutions, technological environment, digitalization trends, and some industry-specific standards to achieve desired results and remain competitive.
Sustainability issues are of particular importance to logistics due to the use of transportation and the necessity to advance routes that minimize environmental damage. According to Mangla et al. (2019), the concerns of sustainable logistical processes incorporate such challenges as supply chain, economic, financial, road, governmental, technological, and legal challenges. Within each of these domains, the implementation of sustainable logistics is complicated by standardization, lack of proper resources, and regulation. However, the global trend in the green economy shifts the sphere of logistics toward sustainability and enhanced corporate responsibility of businesses (Mangla et al., 2019).
The emerging term “green logistics” in the context of “circular economy” implies the incorporation of all of the domains mentioned above into one whole framework that prioritizes sustainability at all levels of logistical operations (Dzwigo et al., 2021, p. 41). Thus, to minimize the environmental burden, companies are challenged with finding new solutions to attaining no-waste work and ecological strategies to implement in their logistics.
Another significant concern is the complexity of the delivery of goods depending on multiple external factors. Indeed, with the emergence of international business, internet commerce, and overall globalization trends, the sphere of logistics faces challenges in optimizing delivery systems. To remain competitive and profitable, companies need to ensure that their cross-border and internal deliveries are executed efficiently, cost-effectively, and quickly. However, a range of issues makes this aspect of logistical operation complicated.
In particular, the cross-border logistics industry encounters such problems as imperfect systems and regulations and the lack of national policies and strategies, without which security inspection, taxation, and customs” are scattered and confusing (Miao, 2020, p. 55). There is also a time-related challenge in cross-border logistics, which is triggered by the complexity of regulations. As stated by Duran (n. d.), “the urgency of the deliveries is increasing, customers want to receive the goods, and the customs and legal procedures require […] time” (para. 7). Moreover, since cross-border logistics involves dealing with foreign countries, their information technology, economic environment, and legal regulations play an important role in the overall success of business operations (Miao, 2020). Thus, organizations need to allocate time and resources to research and development of strategies that would stabilize international logistics and eliminate delivery complexities.
Given the complexity of logistics challenges faced by modern organizations, the necessity for contingency planning and risk management arises. According to Duran (n. d.), the essential element in effective risk management and crisis aversion is for the teams to remain connected in adverse circumstances. Indeed, “the extreme conditions to which the shipments are submitted, force the forwarders to have a safe technology that resists the adversities” (Duran, n. d., para. 6). On the other hand, Brdulak and Brdulak (2021) emphasize the challenges to manage risks in the overall supply chain, which complicate logistics in general. Thus, many organizations have risk management issues in logistics, which might also be resolved via effective contingency planning measures, communication technologies, and effective software implementation.
To summarize, the challenges that modern-day organizations face in the area of logistics are multifaceted and are driven by the leading trends in technology and the global economy. Since the effectiveness of logistics predetermines the overall performance outcomes of organizations and the productivity of employees, in particular, it is essential to address the most common challenges to find and implement compelling solutions. As the process of research on the topic showed, the most common challenges in this area include planning difficulties, agile procedures, green logistics, delivery complexity, and risk management. The ways to resolve these problems are inherently connected with the advancement of technologies and software that would improve the internal organizational environment for better dealing with challenges. As for the external factors, the improvement in legal regulations might be helpful.
Brdulak, H., & Brdulak, A. (2021). Challenges and threats faced in 2020 by international logistics companies operating on the Polish market. Sustainability, 13(1), 1-18.
Duran, B. (n. d.). The 5 great challenges of logistics management in 2020. bytemaster. Web.
Dzwigo, H., Trushkina, N., & Kwilinski, A. (2021). The organizational and economic mechanism of implementing the concept of green logistics. Virtual Economics, 4(2), 41-75.
Mangla, S. K., Sharma, Y. K., Patil, P. P., Yadav, G., & Xu, J. (2019). Logistics and distribution challenges to managing operations for corporate sustainability: Study on leading Indian dairy organizations. Journal of Cleaner Production, 238, 1-48.
Miao, J. (2020). Research on the difficulties and countermeasures of cross-border e-commerce logistics development. International Journal of Education and Economics, 3(1), 54-56.