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DOCUMENT DIGITIZATION IN THE LOGISTICS INDUSTRY

Marketing Manager
Anastasia Shevchuk

INTRODUCTION

Logistics, speed, transportation, efficiency, paperwork, supply chain, digitalization…
All the listed words are crucial for the logistics industry but there is one that is outdated. Sure, this word is paperwork which is about doing repetitive tasks: signing bills, sending invoices and inserting the data into tons of documents. This great scope of work is done manually and requires close attention to details as even the smallest mistake can cost the loss of millions of dollars.

How to transform logistics into a productive, competitive and cost-effective industry?

One of the best methods to achieve it is through business automation, which allows companies to immediately speed up processes and increase employee performance.

Let's consider several advanced technological solutions that will help not only achieve a paperless environment but also help to improve organizational productivity in the logistics industry.

REASONS FOR GOING PAPERLESS

Logistics is a paper-heavy industry. There's a paper trail for every single process, including managing and tracking inventory in warehouses, shipping goods from overseas, or 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 sometimes hundreds of documents confirming a single activity. Papers that contain even the smallest of errors can be impossible to track, resulting in delayed or canceled shipments.

Paper is unreliable in logistics

Manual inventory takes hours to insert the transportation data in the fields and requires additional manpower. Automatized tools allow businesses to take inventory quickly. Cutting down on labor costs enables companies to reallocate resources elsewhere and grow.

Time and cost-efficiency

Human factor should be taken into account. Manual entries are prone to human error. A single mistake can cause significant problems for a company, such as shipment delays, lost items, damaged customer relationships, and overspending.
Automatized tools, for instance, barcodes provide a simple and efficient solution, giving companies constant insights into their stock availability and product movements.

Data accuracy

CMR in logistic

E-CMR

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

The CMR agreement must have the following information:
the date and place where the document had been 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;
the information regarding dangerous goods.
For many years, CMRs have existed as paper forms. Filling out all of the required fields with the above-listed information is time-consuming, especially in cases where duplicate information must be re-entered in various paper forms or systems.

The e-CMR agreement is an electronic version of CMR where the data, communication between parties involved is stored on a single digital platform. Furthermore, e-CMR allows to track the progress of a consignment in real time due to regular status updating and monitoring the movement of goods through each of the key milestones within the delivery process, increasing transparency and efficiency in the transportation process.

BENEFITS OF E-CMR

Say goodbye to paperwork

Finished with lost, handwritten or unreadable paper bills of lading.

Monitor proof of delivery in real time

Work more efficiently by confirming deliveries fast and error-free, 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, the timing of delivery, and always receive correct invoices.
WANT TO AUTOMATE YOUR BUSINESS BUT DON'T KNOW HOW?

DIGITAL SIGNATURES

A digital signature, in simple terms, is a replacement of your handwritten signature with the help of digital devices. 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 matching the signed document, called a hash, and encrypting that data. The resulting encrypted data is the digital signature. The signature is also marked with the time that the document was signed.

E-signatures significantly reduce the time for filing documents and allow logistics operators to offer clients better and faster service.

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

BENEFITS OF DIGITAL SIGNATURES

Cost and Time effectiveness

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

High Accuracy in Documentation Tracking

When the documentation is filled online and affixed using e-signatures, it is easy to monitor the documents. Through the online portal, it is possible to track who already signed and who still has to sign the documents. It won't get misplaced as it would happen through courier, it's all online.

Go paperless and Be Environment-Friendly

Reducing the usage of paper in logistics companies not only saves money but also supports saving the environment.

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

QR CODES AND RFID SYSTEMS

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. Due to QR Codes it is possible to monitor a shipment's location, times when scanning occurred, how many scans were taken through the shipment's journey, and more.

Whereas QR codes offer a "2D view" of data, RFID systems allow having a "3D view" of data.
By the way, what are RFID systems and its role in the logistics industry?

RFID, or Radio Frequency ID, the wireless non-contact use of radio frequency waves to transfer data. The operation of the 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 consists of a microchip that stores data.

RFID allows keeping automatic records of goods within the warehouse without the direct participation of workers.

BENEFITS OF QR CODES AND RFID SYSTEMS

Improved labor effectiveness

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

The two technologies allow workers to significantly save their time and reduce manual processes by instantly identifying items and automatically inserting item information in the central computer system.

Data Accuracy

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

For tracking products, put barcodes on cartons or pallets identifying 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)

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 mouthful term describes what the EDIFACT standard is purposed for:

Typical EDI workflow process

Administrative Purpose
Commercial Purpose
Transportation Purpose
date and time of delivery;
address;
reference to the contract;
prices;
quantity of goods;
other necessary information.
EDI (Electronic Data Interchange) is the computer-to-computer exchange of business documents between business partners that makes the workflow of a logistics company more reliable and easier 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 and more. Electronic Data Interchange empowers businesses to eliminate manual processes, cut costs, reduce errors, and communicate more effectively with trading partners.

Through electronic data interchange solutions, the load and the traceability of a product are monitored, so that 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.
The buyer company sends the supplier a message with the list of goods that they plan to purchase.

Purchase Order contains:
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. The supplier at this time reserves goods in his warehouse for delivery.

At the same time as shipment, the supplier sends a notice to the buyer. It 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. Thus, the Receiving advice is a report from the buyer to the shipper to indicate 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 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 that structures the message and is shared by senders and receivers. Thanks to the use of a common language, the different information systems interact with each other overcoming language barriers and 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, helps increase transparency, efficiency and the speed needed in the logistics industry. Digitization will directly benefit the road transport operator and the wider logistics industry while saving time and money.
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