Cultural changes in the logistics sector as a result of digital transformation
07 de October de 2020
07 de October de 2020
Business logistics, taken to mean the whole set of processes that enable products to be stored and distributed to customers, is one of the most complex sectors and, at the same time, one of the most important in the global economy. Just like all other sectors, logistics has not escaped the onslaught of digital transformation, which has been accelerated due to the situation triggered by the pandemic.
So, which aspects and processes have been particularly affected by digital adaptation? What are the main changes and challenges with respect to supply chain management? On 14th September, EAE Business School held the Career Talk #3, entitled “Cultural changes as the result of digital transformation”, which examined all aspects of Supply Chain trends in the digital age.
The session was led by two representatives from the sector who boast a long career and wealth of experience in the world of logistics: Thiago Silva, the Senior Operations Manager at the company XPO Logistics Europe; and Francisco Castillo, the Head of Transformation at Dachser Iberia. Based on their extensive professional experience, the two specialists gave the attendees a detailed overview of the current situation, sharing insight into the present status of the logistics sector, as well as shedding some light on to what the future holds.
Let’s find out what they had to say.
How has the logistics sector adapted to the demands generated by the changes over the last few months?
With respect to the logistics sector’s adaptation to the demands triggered by the recent changes, Francisco Castillo explained that “over the last few months, we have demonstrated that the logistics sector is important and it is time to show our appreciation to all the professionals in the sector, because we have not stopped for a second. People sometimes think that this can be a bit of a dirty business, but that is not the case at all. It is an essential and highly attractive sector, with a lot of technology”.
He also emphasized that clients have played a crucial role in testing and establishing new processes and digitization.
Thiago Silva then explained how XPO Europe Logistics managed to adapt to the situation. “To adapt, we optimized our processes. The process is something that you have to establish and follow. After all the changes that there have been over the last few months, we were forced to develop new processes that help us to achieve our objectives. In our company, for instance, we have to deal with lots of factors. We are talking about 200 lorries a day, so we created a system to optimize the processes and ensure good results.
Silva explained that the system that they started to apply shortened the steps and prioritized results. They established communication by email and telephone, which ensured operations were properly organized and facilitated the understanding between the company and clients.
What about digitization? Why is digital transformation so important nowadays?
With respect to digitization and its importance, the two professionals agreed on certain points and differed on others. For instance, Castillo emphasized that we cannot understand digitization as a simple mechanism for achieving greater productivity, but rather we also have to see it as a different way of doing things.
“As far as we are concerned, as logistics providers, digital transformation is hugely important”, explained Castillo. “We have different business units and we need our clients to be connected to us. This is the great opportunity that digital transformation facilitates. As such, digitization is essential not only in terms of productivity but rather, as I mentioned, it is also a matter of doing things differently and establishing different channels for connecting with our clients”.
Thiago Silva then highlighted speed as one of the most important features offered by digitization, However, he emphasized that quality remains one of the key challenges to tackle.
“In my opinion, the most important benefit that digital transformation has generated is speed. You can achieve objectives much faster. However, one concern I have in this respect is related to the issue of quality because you can accelerate the speed of the processes, but to do this while maintaining the quality of the service is a real challenge”.
As leaders, what challenges have you faced during this period?
It should be noted that both Castillo and Silva hold leadership positions in their respective companies. This means that, over the course of digital transformation, not only have they had to tackle operational and technological hurdles, but also organizational and human challenges.
“The big challenge here is not considering digital transformation as a purely technological issue”, explained Francisco Castillo. “It is an issue that affects all business units and departments. Obviously, all processes have to be digitized, that is for sure, but there are issues beyond this aspect of the situation.
Castillo then went on to discuss the customer experience and the generational differences between employees, two challenges that he considered important in his company. “We have to understand, for example, that we have a great team of young employees who work alongside an analogue generation. For us as leaders, one of the challenges is to ensure our teams work effectively. Promoting soft skills is an important step in this respect right now”.
At that point, Thiago Silva, turned his attention to staff turnover and how XPO Europe Logistics has managed to reduce it. “We have been lucky over these last few month. One of our goals this year was to reduce staff turnover. We are talking about a company with lots of employees, so when it comes to staff turnover, we are talking about money, and money is important”.
Silva continued by explaining that “the next step was to apply the use of virtual contracts that streamline contracting processes and also foster more dynamic communication with the shippers. Everything that we used to do in person and which took a long time, we started doing through a mobile app. This was an important step”.
How has digital transformation affected the day-to-day work of you and your teams?
Digital transformation has had an impact on the processes and at an organizational level, so it has brought about changes in the day-to-day lives of our employees, directors and clients.
“The workflow has become easier”, emphasized Francisco Castillo. “For example, with digitization, our controlling professionals no longer have to be so concerned about gathering data, but rather focus on analysing this data in real time. The same can be said for the people who assign deliveries, as they do not have to do it manually every day anymore. They now have to think of changes that they can make to the system occasionally, because dispatches are assigned automatically to a great extent. Digital transformation guarantees correct processes, so we do not have to compromise on the quality that our clients demand”.
At this point, Thiago Silva highlighted the facilities that digitization offers for delegating processes and focusing on what is really important. “This type of technology has enabled us to do things faster and with fewer people. Most importantly, it has helped us identify our KPIs.
When we start something, we often want to cover everything and that is not the right way. We have to focus on what is essential. Digital transformation gives us information that lets us concentrate on what really matters and fine-tune our KPIs”.
For over an hour the two professionals discussed the wide range of aspects influenced by digital transformation. A culture that is open to listening to every member of the company and teams willing to use technology to achieve our business goals are two of the key points mentioned.
If you are interested in this topic and other issues related to current technological and economic trends, keep an eye out for upcoming sessions of EAE’s Career Talks.