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DOCUMENT DIGITIZATION IN THE LOGISTICS INDUSTRY

Marketing Manager
Anastasia Shevchuk

INTRODUCTION

There are many crucial aspects of the logistics industry, including speed, transportation, efficiency, paperwork, supply chain, and digitalization, but one of them is outdated: paperwork. Paperwork involves repetitive tasks like signing bills, sending invoices, and inputting data into documents. This great scope of work is done manually and requires close attention to detail, as even the smallest mistake can end up costing millions of dollars.

How can logistics be transformed into a productive, competitive, and cost-effective industry?

The answer is business automation, which allows companies to immediately speed up processes and increase employee performances.

Let's take a look at several advanced technological solutions, which will not only help achieve a paperless environment with digital document management, but also improve organizational productivity by providing improved methods of tracking goods and monitoring goods.

REASONS FOR GOING PAPERLESS

Logistics is a paper-heavy industry, which means there is a paper trail for every single process, including managing and tracking inventory in warehouses, shipping goods from overseas, and moving from distribution centers to stores. While this means everything is trackable, lost or damaged documents can cause serious difficulties. No matter the movement, there are hundreds of documents confirming a single activity. Papers containing even the smallest errors can be impossible to track, resulting in delayed or canceled shipments.

Paper is unreliable in logistics

Manual inventory takes hours to input the transportation data into the fields and requires additional manpower. Automatized tools allow businesses to take inventory quickly, cutting down on labor costs and enabling companies to reallocate resources elsewhere and grow faster.

Time and cost-efficiency

The "Human Factor" must also be taken into account. Manual entries are prone to human error. A single mistake can cause significant problems for a company, such as shipment delay, lost items, damaged customer relationships, and overspending.

Automatized tools like barcodes provide a simple and efficient solution, giving companies real-time insight into their stock availability and product movements. Barcodes in logistics are nigh essential today.


CMR in logistic

E-CMR IN LOGISTICS

The CMR is a transportation of goods agreement concluded between a cargo transporter, freight forwarder, and cargo carrier, to be used during international trade activities where goods are being transported by road.

The CMR agreement must contain the following information:

  • The date and place where the document was completed
  • The name and address of the transport company, as well as the receiver
  • The description of the transported goods and the packaging method used
  • The weight of the goods
  • The charges related to the goods
  • Information regarding dangerous goods
For many years CMRs have existed as paper forms. Filling out all of the required fields with the information listed above is quite time-consuming, especially in cases where duplicate information must be re-entered in various paper forms or systems.

An e-CMR agreement is an electronic version of the classic CMR, where the data and communication between parties involved is stored on a single digital platform. Furthermore, e-CMR in logistics allows the tracking of the progress of a consignment in real time via regular status updates and monitoring the movement of goods through each of the key milestones within the delivery process. Document digitization in logistics has drastically increased transparency and efficiency in the transportation process.

BENEFITS OF E-CMR

Say goodbye to paperwork

No more lost, handwritten, or unreadable paper bills of lading.

Monitor proof of delivery in real time

Work more efficiently by confirming deliveries quickly and without errors, passing on correct delivery times, and directly sharing the CMR with all parties involved.

Receive correct invoices on time

Customers gain insight into the status of their shipments and the timing of delivery, and always receive correct invoices.
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DIGITAL SIGNATURES

A digital signature, in simple terms, is a replacement of your handwritten signature with the help of a digital device. They are like electronic "fingerprints." In the form of a coded message, the digital signature securely associates a signer with a document in a recorded transaction.

When a signer electronically signs a document, the signature is created using the signer's private key, which is always securely kept by the signer. The mathematical algorithm acts as a cipher, creating data which matches the signed document, called a hash, and encrypting that data. The resulting encrypted data is the digital signature. Digital signatures in logistics are also marked with the time that the document was signed.

E-signatures significantly reduce the time it takes to fill out documents and allow logistics operators to offer clients a better and faster service.

The time-consuming and labor-intensive method of manually signing business documents can cost organizations millions in dollars of lost revenue. Therefore, to shorten the process of closing deals, logistics companies are transferring from the traditional way of signing documents to a digital method.

DIGITAL SIGNATURES IN LOGISTICS: THE BENEFITS

Cost and Time effectiveness

Less time spent preparing, filing, and signing logistics contracts allows your staff to focus on more important tasks like closing deals and making deliveries. Furthermore, the use of digital signatures means companies don't need to spend extra money on printing, paper, couriers, shipping, postal, and data storage (physical space) costs.

Highly Accurate Documentation Tracking

When the documentation is filled-in online and affixed using e-signatures, it is easy to monitor. Through the online portal, it is possible to track who has already signed and who still needs to sign the documents. It cannot be misplaced, as it could with a courier, as it's all online.

Go paperless and Be Environmentally Friendly

Reducing the amount of paper logistics companies use not only saves money, but also helps save the environment.

If you want to learn how blockchain technology can help to automate processes in the logistics industry, check out this link: The Impact of Blockchain Technology on the logistics industry.

QR CODES IN THE LOGISTICS INDUSTRY

A quick response (QR) code is a type of barcode that can be read by a digital device. QR codes offer a "2D view" of data. QR Codes in the logistics industry make it possible to monitor a shipment's location, times when scanning occurred, how many scans were taken through the shipment's journey, and more. Barcodes in the logistics industry are great for a number of things, from monitoring goods to document management.

RFID SYSTEMS IN THE LOGISTICS INDUSTRY

While QR codes offer a "2D view" of data, RFID systems allow a "3D view".

RFID, or Radio Frequency ID, is the wireless, non-contact use of radio frequency waves to transfer data in an electronic data interchange. The operation of an RFID system is based on the use of special RFID tags and devices that read the information stored in the RFID tag.

An RFID tag is a microchip that stores data.

RFID allows the keeping of automatic records of goods within the warehouse without the direct participation of workers. There are many convenient RFID solutions.

BENEFITS OF QR CODES AND RFID SYSTEMS IN THE LOGISTICS INDUSTRY

Improved labor effectiveness

What once took employees hours to accomplish can be achieved in minutes with QR codes and RFID solutions for data collection. Scanning a QR code or RFID tag takes significantly less time than manually entering information.

These two technologies allow workers to save time and reduce manual processes by instantly identifying items and automatically inputting item information into the central computer system.

Data Accuracy

Clerical keying of the manual source documents, such as a receiving documents, transfers, and cycle counts, leads to data entry errors from illegible or misinterpreted handwriting and data entry keying errors. Handwritten documents and keying have several potential percentage points of error, whereas barcode scanning is 99.9% accurate.

For tracking products, barcodes are put on cartons or pallets to identify the contents. Each warehouse, zone, aisle, level, bin, and slot should be barcoded for tracking inventory movement through various processes and locations.


QR and RFID systems

EDI (ELECTRONIC DATA INTERCHANGE)

EDI (Electronic Data Interchange) is the computer-to-computer exchange of business documents between business partners. It makes the workflow of a logistics company more simple and reliable through the standardization, automation, integration, and simplification of those critical data exchanges.

An EDI system converts the information from the documents into ones and zeros and transmits the information to the receiver.

EDI includes business documents such as purchase orders, invoices, shipping notes, dispatch data, etc. Electronic Data Interchange empowers businesses by enabling them to eliminate manual processes, cut costs, reduce errors, and communicate more effectively with their trading partners.

Through electronic data interchange solutions, both the load and the traceability of a product are monitored, so the person in charge knows the status of the merchandise at all times. Users can validate the information that arrives and solve possible incidents quickly.

What is EDIFACT in EDI?

EDIFACT is what industries use as a "language" to transfer information.

EDIFACT is a structured schema for a sending computer to transmit data to a receiving computer.

Specifically, the UN/EDIFACT, the United Nation/Electronic Data Interchange for Administration, Commerce, and Transport.

This is a real mouthful! And it describes what the EDIFACT standard is purposed for:
  • Administrative Purposes
  • Commercial Purposes
  • Transportation Purposes
Typical EDI workflow process

The buyer company sends the supplier a message with the list of goods they are planning to purchase.

The Purchase Order contains:
  • Time and date of delivery
  • Address
  • Reference to the contract
  • Prices
  • Quantity of goods
  • All other necessary information
The supplier sends the buyer's response to his order, noting his consent to the transaction and indicating how accurately the order can be executed. It may also indicate the change in prices for the product selected by the buyer. The buyer receives advance confirmation of prices and quantity of goods from the supplier, and then reserves the goods in his warehouse for delivery.

The supplier sends a notice to the buyer once it has been shipped. This helps simplify and speed up the process of goods acceptance, as EDI856 (DESADV) contains detailed information about the cargo. For example, container numbers, the hierarchy of packages indicating their types, barcodes, and contents, as well as the physical characteristics of the goods, etc.

When the buyer accepts the goods from the supplier, he sends him a RECADV message on the received and delivered goods. The receiving advice would therefore be a report from the buyer to the shipper indicating that the order arrived undamaged at its final destination. Moreover, rapid notification of the supplier allows him to generate invoices quickly.
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BENEFITS OF EDI

Cost Reduction

Automation of processes that were previously performed by employees manually using paper documents and/or email will certainly reduce costs and increase time efficiency.

Tracking goods and reporting optimization

EDI can be integrated with a variety of business systems (ERP, CRM, Warehouse Management, accounting, etc.) This allows enterprises to improve business processes and provide data collection and analysis.

Standardized messages

The exchange of electronic information via EDI uses a standardized language which structures the message and is shared by both senders and receivers. Thanks to the use of a common language, the different information systems interact with each other to overcome any language or technical barriers.

SUMMARY

For logistics companies, maintaining the flow of operations is vital to the success of the business as a whole. By turning away from paper solutions and digitizing the way logistic companies operate, the logistics industry will see an increase in transparency, efficiency and speed. Digitization will directly benefit the road transport operator and the wider logistics industry, saving time and money for everyone involved.
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