How a Traditional Company Digitized its Entire Logistics Processes?

In today’s era of remote work, the digitization of core supply chain functions has become vital for the survival of organizations. Shifting away from the traditional approach of relying on manual labor, companies are embracing automation and digitization to streamline their operations. This article explores the transformative journey of a leading Home Fragrance and Incense Sticks company as it digitized its extensive logistics processes.

Optimizing Logistics: Efficiency and Revenue Generation

Logistics plays a pivotal role in converting factory output into revenue, making it the most crucial business function within an organization. The proximity of this process to the consumption point amplifies the impact of any disruptions on fill rates and overall revenue. Traditionally, significant manpower and time investments were required to manage and monitor various logistics processes, including inbound raw material movement, movement between plants and sub-contractors, and outbound logistics. Additionally, ensuring timely delivery of goods, capturing electronic Proof of Delivery (ePoDs), generating accurate invoices, and performing reconciliation consumed substantial time and effort.

Digitizing the Logistics Network

The Home Fragrance and Incense Sticks company, known for its long-standing presence, undertook a comprehensive transformation of its logistics processes.

With a vast network comprising 400 vendors, 30 manufacturing plants, 25 packaging plants, 200 sub-contractors, 5 mother depots, 35 depots, and 6000 customers, the organization sought to unify and digitize its logistics operations. By implementing a common system and integrating automation, the company aimed to enhance efficiency and overcome the challenges posed by its complex network.

Leveraging Automation for Improved Operations

In addition to the primary logistics operations, the company focused on optimizing sub processes such as cartage, trip merging, multi-drop/multi-pick shipments, and handling multi-modal transportation involving road and rail combinations. These enhancements aimed to eliminate manual interventions and improve overall process efficiency.

Eliminating Manual Efforts and Enhancing Accuracy

Previously, the organization relied heavily on manual processes to enable, monitor, and reconcile each goods movement within its extensive logistics network. Furthermore, the logistics team dedicated significant time to validate invoices from transporters, while the accounting team faced challenges in allocating expenses to the appropriate cost centers and subsidiaries.

However, with the successful implementation of extensive automation efforts, these manual processes were significantly reduced, leading to a drastic reduction in invoicing errors.

Cost Reduction and Improved Operational Control

The digitization efforts resulted in a considerable reduction in logistics costs as truck utilization improved through the implementation of trip merging and reverse haul possibilities.

The enhanced visibility of estimated time of arrival (ETA) provided logistics planners with better control over operations, leading to improved

• Key Performance Indicators (KPIs)
• Turnaround Time (TAT)
• On-Time Delivery
• Supplier Ratings

Real-Time Integration for Seamless Operations

The successful implementation of the digitization project relied on real-time integration with the SAP ERP backbone. This integration ensured seamless data flow and efficient synchronization between logistics operations and the company’s overall enterprise resource planning system.

Conclusion:

Through a focused and efficient digitization process, the traditional Home Fragrance and Incense Sticks company successfully transformed its logistics operations. The implementation of a common system, automation, and real-time integration enabled significant improvements in operational efficiency, accuracy, and cost reduction. By embracing digitization, the organization gained enhanced control over key KPIs, allowing for better decision-making and improved customer satisfaction. In an ever-evolving business landscape, this case study demonstrates the importance of embracing digital transformation for the continued success and growth of traditional companies.