Why Custom Software Development Is Better for The Logistics Industry

Today’s immensely dynamic and interconnected world sets high requirements for companies from all industry domains and the logistics sector is no exception.

The logistics industry is experiencing the most profound transformations due to the digitization of many processes from goods storage and delivery to transportation management. Therefore, logistics companies have to obtain the software that would effectively handle their operations such as warehouse filling, transportation management, finance operations, data processing, and many others.

Although there are many off-the-shelf solutions available, still many companies prefer creating their own logistics software solutions. In this article, we explain how businesses can benefit from digitizing their logistics operations and when it’s better to develop a custom software solution over off-the-shelf.

How Digitization Is Transforming Logistics

Logistics digitization is a comprehensive process that affects all sectors of this industry. Many businesses are leveraging logistics digital solutions to keep the competitive edge in the highly volatile market.

The Logistics industry has already experienced some level of digitization so far and is proceeding with it on different levels:

• data management is empowered with various data collection and processing apps, diverse software for supply chain control and management;
• physical transportation utilizes robots, drones, Internet of Things (IoT), and driverless vehicles for goods management and delivery;
• marketplaces – digital marketplace platforms connect potential buyers and sellers with the help of cross-border commerce platforms and foster businesses to use their resources more accurately through sharing platforms, e.g. shared transport/ warehouse capacity, etc.

The core logistics areas that undergo digitalization are:

• Inventory management 

It allows managers to quickly track each inventory position using Barcodes, RFIDs, or QR-based systems. Apart from real-time tracking it also shares some extra data on each item, e.g. its value, status, condition, etc. With inventory management software businesses can optimize their costs, improve the delivery time, and stay updated on each item’s current state.

• Transportation

It can be rather challenging for a company to track all the goods shipments manually. Transportation allows performing simple fleet management, making the process less labor-intensive and less error-prone. Besides that, vehicle tracking management software helps logistics companies to calculate the best routes for fast and inexpensive goods delivery and create multi-channel shipping routes.

• Supply chain management

Supply chain management allows businesses to control and manage the flow of their goods and materials from the point of origin to the end-users, cutting the necessity in middlemen and, therefore, reducing product costs. Above all, companies can track the production-shipment-distribution chain of their products and share this data with their consumers, improving product transparency and customer satisfaction with the products.

• Order management

With order management software, businesses get access to up-to-date data on the stocks and transport load, and can automate the order tracking and placement processes for themselves or their business partners. As a result, companies can optimize the use of their resources and provide their clients with the latest data on the products, transportation, storage space, and others.

• Warehouse management

For some businesses, it’s essential to have warehouse management as a standalone feature in their software solutions. It gathers all the tools related to warehouse management in one place and helps companies optimize the use of their warehouses. These tools can include price customization, creation of quick invoices, sending notifications, barcode scanning, improved packing, and others.

• Internal processes

For effective logistics management, some companies include in their software the functionality that helps them to perform faster routine processes. For example, it can be billing automation, automation of transportation and warehouse documentation, visual tracking of all manufacturing and transportation stages, seamless integration with other software, data sharing between various departments, and others.

• Data analysis

Logistics involves numerous processes that can always be improved or optimized. For this, companies need to collect the data produced by logistics sectors and carefully analyze it. Many businesses widely implement data analytics apps to improve their scalability, efficiency, and revenues. With the data analysis feature, companies can better investigate their inner logistics processes as well as track the trends and patterns within their supply chains, predicting the market demands and behavior.

How Logistics Companies Can Gain Competitive Advantage With Custom Software Development

When considering various options of logistics management software some companies usually start with the off-the-shelf solutions available on the market. However, with the business expansion and growing demand in logistics operations, ready-made software starts quickly losing its popularity, requiring extra effort for its management and synchronization.

In its turn, custom logistics software development provides businesses with a number of valuable advantages that make it a perfect solution for any company from startup to enterprise:

• Requirements compliance

When considering ready-made applications, businesses should be aware that they will get a solution with a certain set of features that addresses the most common use cases. At the same time, some features may be never used or miss out on the most critical management functions.

The ready-made software is usually difficult to customize to the needs of a particular business. You should either contact the solution provider for customization if they provide it or turn to an IT vendor experienced in that particular application or solution. In both cases, it takes time and money.

When turning to a custom logistics development provider, you can embed any functionality you might need to handle your logistics processes, even if they have to deal with the most specific markets or products. Moreover, you can build logistics applications compatible with any software used by your clients and customers.

• Enhanced security

When using off-the-shelf software, companies have to share their sensitive data with the software provider. In some cases, this may lead to the leakage of the most critical data.

Custom software is a more secure option as cybercriminals need to learn how to hack a specific app’s source code. Moreover, companies can always expand their solutions with some extra protection such as two-factor authentication, limited access to data depending on the company’s departments, and others.

• Exceptional scalability

The weakest point of all off-the-shelf solutions is their cumbersome nature and inability to scale. Meanwhile, customized applications can be easily scaled horizontally and vertically or upgraded with the latest IT technologies such as Artificial Intelligence, Virtual and Augmented Reality, Internet of Things, Blockchain technology, and others. These innovations boost the transformation in the logistics industry, helping companies to stay competitive in the market and preventing software from getting obsolete.

• Cost-effective solution

In most cases, ready-made logistics applications are available on a pay-as-you-go or subscription basis. It means that you should pay for it on some certain period of time monthly or yearly. Although the sum of a year’s subscription may seem less than building custom logistics software from scratch in the long-term perspective it’ll amount to a considerable sum or the subscription price may be increased by the software provider. Therefore, the creation of custom software can be a worthwhile investment in the sustainable development of the company.

Custom software development offers an extensive number of benefits to logistics companies. However, businesses of different scales have their own reasons to develop custom applications.

Summary

The logistics industry is experiencing a major digital transformation today. This transformation helps companies to improve their logistics operations, making them more automated, smoother, faster, and less error-prone. Therefore, most businesses that have to operate in the logistics sector have to choose between off-the-shelf programs and developing a customized application.

Although ready-made solutions can work as a viable option, it is only a temporary measure for performing effective logistics activities. When building a customized logistics application, a company invests in a long-term solution that ensures its continuous and effective work.