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What Significance Does Automation Hold For Logistics Management

Automation is the future.

There is little doubt left in that. With changing requirements from products today, the manufacturing premises and tools used need to be compact.

They also need to be agile and movable.

For example, it would be foolish to have a system of mass production for cars like the one used by Henry Ford back in the day. This is because customers have changing requirements when it comes to cars now. Using the existing systems, that cannot adapt and alter their processes to accommodate changes in products, are destined for failure in today’s rapidly changing world. But what is automation, exactly?


Automation control as used in the industry is the setting up of many control systems to operate complicated machinery and oversee processes in factories. It is also used in heat treatment systems, phone networks, ships and aircraft control systems to decide direction and monitor critical information. Automation in these systems and applications reduces the need for human intervention so that they can self-adjust and adapt on their own with accuracy. The major benefits of automation include:

  • Improve precision in processes

  • Improve quality of service

  • Saving Energy and use of Raw Materials

  • Reduce errors to Improve Accuracy

  • Labor Cost Reduction

In the Context of Logistics

In logistics, automation deals with the Transport Management System (TMS) in place by the company. It specifically deals with adding useful features to the system which can enable this amazing wonder of technology to be a more effective management tool. It focuses on the removal of manual entries for shipment through wireless communication between various devices to automatically update shipment. It also includes finding the most efficient and cost effective method for transportation of different shipments.

Constant monitoring, automatic notifications and real-time analysis of updated freight data are also included in the realm of logistics automation. The patterns and the data itself are used to find solutions to anticipated problems. Automation can also be a source of significant advantages to the Logistics Industry.

The Logistics Industry Will Gain Significant Advantages With Increased Automation


  1. Access to real-time Freight Rates and efficient transportation options


Fuel costs are the most important consideration factor in any transportation business. With advanced automation features incorporated into a transportation management system of a logistics company, this problem can be overcome to a certain degree. The company can come up with instant strategies using real time data of net transport costs ( including fuel prices) to develop a strategy for streamlining processes to getting greater.

The transportation management system (TMS or ERP) should have a robust framework and web-architecture firmly integrated throughout the organization to connect managers. They can get live rates in real-time for fuel and contract carriers. They can have the option to choose outsourced contract carriers who offer the best mix of insurance, transit, fuel and other costs. This will empower the company to make the right decision and calculate real savings before they even hire the services of the carriers.

  1. Updated Freight Data and Real-time Analysis

With a TMS equipped with advanced features, you have an arsenal of information at your disposal. The data in a TMS is continuously updated and you can generate a report at any given point in time to assess the profitability of your operations and whether any changes need to made in driver schedules or shipment planning. You can also keep a record of historical performance based on previously generated reports so that you can have a fair idea of what has worked in the past, what practices need to continue and which ones need to be let go of.

For instance, if your shipments are fragile like LED TVs or Glass furniture, a particular contractor who handles them well and delivers them in a timely fashion will be considered. Over time, you find out by your TMS freight data that you are incurring an overall loss because that contractor was driving up shipping costs. You will likely consider shifting to another carrier who has a significantly lower cost and doesn’t worsen customer service in terms of delivery time and condition of fragile natured shipments.

It helps if you can run some preliminary tests using real time and updated figures to weigh the costs and benefits of your decision, so that you don’t lose out on customers by hiring a low cost solution that disrupts your customer base. This way you can mitigate decisions which could impact the performance of your company in the future.

  1. Reduce Minor errors that could prove dangerous and costly

Automation allows your entire product related information to be adjusted automatically into your ERP/TMS system. You will be able to avoid errors such as billing to the wrong supplier or customer. Automatic entry of costs related to each of your category of shipments, such as fuel, raw materials, storage and packaging etc. ensures that you never have to worry about wrongly entered data. Your shipping costs may be subject to a lot of human error, had automation not been incorporated into the system and processes. Automation eliminates errors such as double payment of charges or incorrect categorization of shipments for higher freight.

  1. Elevated Level of Customer Service

The end customer will receive the benefits of TMS automation in terms of speedy service and lower costs. Automatic SMS or email notifications will let the customer know when the package will arrive and how much it will cost exactly. No more hidden costs. With real-time tracking and accounting of freight, insurance and other features in the TMS will allow your customer and you to be informed of where the shipment is, during the whole transportation process.

Having a TMS software offers significant advantages. The initial investment may seem costly, but is in fact worth it. Especially, in cases where recoveries can be made within the first year of installation depending upon how well the system is used.

Whether you would like to know more of cloud based management systems or have been convinced by this post to purchase one, get in touch with us at Routeique.   

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