Transport and logistics are on the winners' podium for digitization in Germany's small and medium-sized enterprises (SME). It's time to reap the potential of the digital work processes that are now in place and broaden the degree of networking to remain competitive in the globalized world. This has been shown by two studies on digitization.
The facts are clear: The transport and logistics sector benefits from digitization and gives it impetus. The main reason: Thanks to new digital technologies, this comparatively labor-intensive sector has been able to coordinate its considerable organizational efforts more efficiently and improve customer and partner contacts. Connected processes help optimize storage facilities and devise new transport routes and options. Moreover, shipments and vans can be monitored remotely and downtime avoided through predictive maintenance.
Digitization index: Work processes already comparatively very digitized
The "Digitalisierungsindex Mittelstand" ("SME digitization index" from 2018) surveyed more than 2,500 SMEs in Germany to assess their current level of digitization. A sub-report of the study, produced by Deutsche Telekom in collaboration with techconsult, focuses on the results of the companies surveyed in the transport and logistics sectors.
The study's digitization index covers four digital areas of action: IT information security and data privacy, digital offerings and business models, company productivity and customer relations. Overall, the transport and logistics sector achieved above average scores in all of these areas. In the overall index the sector scored 61 out of a possible 100 – six points higher than the cross-industry average.
There are two areas in which the industry is particularly strong: productivity, which is a key business objective. The industry achieves 60 index points in terms of digitization, which is eight points more than the average for all industries. With the traffic data of their networked trucks, 35 percent of companies are already monitoring their routes, planning them better and keeping a closer eye on perishable freight with sensor data. The second extreme advance is the field of digital offers and business models, that is the digitization of all existing processes. Logisticians have shown particular entrepreneurial courage in this respect, achieving 55 index points, eight points more than the average for the economy as a whole. With online booking and optimization platforms, 30 percent of companies already handle their transports more cost-effectively. In some cases, they link their offers with networked and intelligent functions and thus offer their customers smart products. So it's no wonder: the customer relationship area also scores above average with around 59 index points (overall average: 53 points). IT, information security and data protection achieved the highest score with 68 points (other industries 66 points) and is certainly also a key topic. After all, digitization is not just a matter for the IT department. Every second company in the sector therefore trains the digital know-how of managers and selected employees, especially in data security, data protection, IT security and the secure handling of digital devices and applications.
It's worth it - keep going
Logistics companies are making systematic use of the opportunities offered by digital transformation to stay ahead of the tough competition within the industry. The digital leaders among the logistics companies, that is the ten percent of the top digitizers in the industry, are even more satisfied than the other companies in their sector concerning key business indicators such as turnover, sales and order processing time. They have particularly accelerated on their transformation path. It is worth investing in new digital technologies and in the further training of employees.
PAC study on the Internet of Things in production and logistics: market far from saturated
Above average levels of digitization but still considerable room for improvement – this assessment has been further refined by the results of the PAC study "IoT in production and logistics". According to the study's authors, only five percent of the companies surveyed are exhausting their IoT potential and significant security concerns play a decisive role in their investment plans.
Market analysis and consulting firm PAC was commissioned by Deutsche Telekom and its corporate-customer subsidiary T-Systems to survey 150 IT and business decision-makers from the production and transport sectors in Germany, Austria and Switzerland. The results were published in November 2016.
The transport and logistics segment is considerably better connected than machinery and plant engineering or goods manufacturers. Its current connectivity is better and it already has more IoT project experience.
Compared to manufacturing, logistics firms attribute by far the greatest importance to IoT issues. 72 percent see it as quite or very important for their sector. This is conclusive, freight carriers work per se mainly with movable goods and therefore have a particular interest in making logistics processes more transparent and efficient using IoT technologies (sensors, GPS, connectivity, IoT products, data analytics, etc.) and avoiding downtimes caused by technical defects. The transport sector in particular is under huge innovation pressure: for example, online vendors are developing brand new delivery concepts using IoT technologies.
73 percent of the managers surveyed said their priority was to invest in IT security before spending money on sensors or networks. Attacks on a company's core, such as the logistics platform, can put their continued survival at risk.
Communications infrastructure as the basis of IoT projects
Companies wanting to take their digitization efforts to the next level can use the self-check on the “Digitalisierungsindex” website (German) to assess their current level of digitization and how they compare to other companies and their sector as a whole. The most important step is to combine all digitization activities into a company-wide IoT strategy. It is also essential to determine whether existing systems and machines can be retrofitted with sensor technology. IT should be integrated in IoT projects at an early stage. It is advisable to look for off-the-shelf solutions in order to reach your goal faster and more reliably. Many sub-features (such as portals, tracking solutions, etc.) have already been developed and can be adapted to your specific needs. It is often worth looking at completed projects in other sectors with comparable problems.
