Digital transformation as a response to economic downturn
A logistics and transportation business offers a range of logistic services from domestic road transport to the warehousing of goods. The business initially started operations in customs clearance, but over the years its services have expanded into logistics forwarding through good business relationships and partnerships with clients and suppliers. The business has become one of the key market players and is an example of a modern, fast growing business.
Due to poor market conditions and overall economic downturn, the business was looking for new ways to manage its clients’ supply chains and logistics departments to improve efficiency reduce costs and mitigate any risks.
The business’s goal was to provide integrated business solutions through innovation and digital transformation. It wanted to integrate digital technology into its business models to enter new markets, improve market intelligence and deliver higher value to customers. It wanted to establish a fully-digital business model via a digital app and meet customer demand by utilising the logistics capacity of other businesses rather than owning its own logistics assets.
The business underwent a digital transformation leading to where they are today, employing around 200 people without needing to actually own any physical logistics assets. Even though transitioning to the non-asset business model required high initial costs, it allowed the business to reduce amortisation and inventory costs, saving the business money in the long term.
It tracked all shipments with digital technology and acted as a middleman in matching logistics capacity to customer demand. By establishing operations this way, the business was able to provide the same level of service as much bigger players in the market. As a small business, it benefited from an agile approach, making digitalising the entire business model and then adopting it easier.
A non-asset-based logistics business finds its market in providing expertise within supply chains and negotiating better commercial terms with the parties – it is connecting clients with distribution companies that deliver, store and manage their products and materials. The high flexibility of such supply chain models allows it to identify the best approach to meet the demands of industry and to respond to clients’ needs on a case-by-case basis.
The new strategy included a mission of providing innovative integrated logistics services, emphasising efficiency and dedication to customers as well as a vision of creating a sustainable model to take a leading position on the regional market. As part of the strategy, the business also aimed to invest in its employees and in technology.
The business conducted a skills assessment to make sure its workforce was able to implement its strategy. This helped it to identify a skills gap and to prepare a workforce plan to develop its current workforce and recruit people with the necessary skills to support the business transformation. The business managed to establish a balanced workforce of young and energetic people and experts with proven knowledge and experience.
In hiring employees the business focused on young people without significant previous work experience and trained them through its internship programme. During their studies, they got to know the business and gained some practical knowledge and experience. Many stayed with the business after the internship programme ended. The fact that the employees were already adapted to and comfortable with the business’s working environment and culture benefited both the business and its employees.
When it comes to digitalisation, the business has turned to providing its clients with transportation management system software, compatible with logistics platforms such as EDI, SKYTRAK and WMS. This helps clients to procure distribution services in an efficient and timely manner. It has also invested in the education of its employees and in an integrated information system that allows quicker flow of information within the business.