Inefficiencies identified in outdated legacy automotive logistics systems: Legacy software systems hold many back
Aachen, March 2018.
The digitalization of transport logistics is not yet widespread. Out of approximately 100 automotive logistics providers questioned in a survey carried out by INFORM GmbH (Institut für Operations Research und Management GmbH), nearly one in four respondents (24 percent) is still working with software that was introduced more than 11 years ago and over 90 percent of the people surveyed reported limitations with the systems they use.
The study, carried out in the autumn of 2017, questioned key players at different points in the logistics chain. The largest group was logistics service providers, followed by automotive manufacturers. There was wide agreement over the significance of transport logistics. 80 percent of participants believe that the number of vehicles needing to be dealt with in the logistics sector will grow by at least 10 percent, and half of those even estimate a rise of more than 20 percent.
The respondents believe that this stands in stark contrast to the state of their IT equipment. Many weaknesses were identified, from user friendliness, which was criticized by 47 percent of the participants, limitations of the system for data collection and evaluation (42 percent), through to a lack of future viability (33 percent). This may well be down to the age of the systems. Although 45 percent work with systems that are at most five years old, 24 percent indicated that their systems have been in place for between 11 and 20 years.
In the first instance, the main reason for not acquiring a new system was attributed to financial factors (ranging from 51 to 60 percent), such as the need for capital investments and a restricted company IT budget. At least one in three has had negative experiences with implementing an IT system in the past and is wary of new software solutions as a result. At the same time, the majority of logistics players (51 percent) consider IT to be of key value in the marketplace, since it always enables them to stay one step ahead of their competitors. Matthias Berlit, INFORM’s Vice President of Industrial Logistics Division, comments: “These messages send out clear signals to software developers and IT support. Logistics experts recognize the importance of a good IT system but expect them to be better, more convenient and more user friendly.” He goes on: “The study clearly shows that the need for efficient IT provision in automotive logistics is far from being met. It makes one wonder that only 9 percent of those asked, indicated they were completely satisfied with their system.
In addition to the cost aspect, a specialized software such as INFORM, represents an added value that should not be underestimated due to the consulting know-how contained in the technology even before implementation.
The preferred identification technology for logistics processes in the automotive sector is still the barcode, which is applied by 67 percent of users. Only about 45 percent currently use GPS telematics data. What is certain for the future is that telematics is anticipated to grow significantly in importance for trucks, cars, and communication between vehicles. Nevertheless, at the moment, nearly one in five respondents (19 percent) say, “We still don’t use any form of technology for identification or tracking.”
When asked about the particular challenges facing their business in the future, the automotive logistics experts identified the following most frequently: improved efficiencies in operative procedures, flexibility in planning deviations, along with the execution of every order on time.
You can request a copy of the complete survey results here.