TECHNOLOGIES IN LOGISTICS MANAGEMENT SYSTEM (LMS) DEVELOPMENT
8 min
Dec 11 2020
Nikita LExecutive Director
Danil LWeb Developer
Logistics software development is the future of E-commerce, delivery services, off-line retail, and other industries. Such solutions automatize logistic processes – freight forwarding, shipping, aviation operations, supply chain communications, etc. Logistic management software works for simplification, saving time, reducing expenses, and improving customer experience.
Are you interested in developing an LMS (Logistic Management System) to improve your business activities? Let’s discover some technologies, approaches, trends, stats, and benefits.
Table of contents
Statistics shows that companies should integrate more LMS
LOGISTICS MANAGEMENT SYSTEMS AS A TREND
The worldwide shift to digitalization is transforming all industries, including logistics.
The development of digital management systems is one of today’s trends in logistics.
However, many companies still don’t use technologies and Logistics Management Systems:
- 35% of big transportation companies have LMS and build strategies upon them, while mid-sized and small businesses experienced a 15% growth in logistic management development for their needs (Logistics Management);
- 46% of manufacturers and retailers don’t use Inventory Management Systems to track their supplies and goods (Wasp barcode);
- 63% of companies don’t rely on technology development to watch, analyze, and improve supply chain performance (Zurich Insider).
The development of Logistics Management Systems can change anything, from supply chains to delivery formats and management processes. Companies investing in digital technology development are more likely to become industry leaders. Just look at these stats:
- The world’s TMS (Transport Management Systems) market is constantly growing and is expected to reach $4.8 billion by 2026 (Marketwatch);
- 60% of the biggest manufacturers will use artificial intelligence by 2024 to transform their supply chains, leading to a 20% growth of productivity (Inbound Logistics).
The functionality and capabilities of logistic management systems are constantly expanding.
A variety of advantages provide by Logistics Management Systems
LOGISTICS MANAGEMENT SYSTEM’S DEVELOPMENT – ADVANTAGES & GAINS
How can your business possibly benefit from Logistics Management Systems? According to various researches, the development of such software saves 5-10% of a company’s expenses on transportation.
What are other advantages and gains for E-commerce, the manufacturing sector, warehouse management, and similar organizations?
- The development of Logistics Management Systems will eventually create the world trade network, smoothly connecting all links in every supply chain.
- The digitalization of logistic processes simplifies and speeds up the workflow. It also means that a company’s employees can increase their efficiency and perform more tasks within the same period of time.
- Visibility and transparency of all processes, as any company involved in the logistic chain can easily access a management platform to monitor these operations from any device.
- When you develop a Logistics Management System for your business, you also reduce human error.
- Organizations enhance the quality of their services by building and properly deploying software for logistic management. In this field, you can find plenty of programs for analyzing online data, finding inconsistencies, and quickly creating dynamic reports. You’ll get to know your clients’ needs and also eliminate problems related to your company’s daily workflow.
Logistic companies investing in the development of management software find it extremely beneficial and worthy of the costs incurred.
There are lots of digital systems for Logistics Management
TYPES OF LOGISTICS MANAGEMENT SYSTEMS
Let’s have a closer look at various types of logistics management solutions – where companies use them and how LMS development helps in achieving business goals.
Supply Chain Management Systems (SCMS)
Such solutions increase profits, optimize procurements, save time and other resources, and generally enhance the transparency of business operations. The development of supply chain logistics management systems allows to:
- track suppliers and consumers;
- manage logistic and sales departments;
- create detailed reports on business processes.
Warehouse Management Systems (WMS)
This type of logistic management deals with ordering and storing goods that should later travel through supply chains from manufacturers to customers. The development of software for inventory management system helps to:
- reduce the risks of stock-out or overstocking;
- save time on inventory;
- improve sales cycles;
- boost profit.
Cross-platform inventory management systems work on both iOS and Android. Only experienced, highly skilled professionals should be involved in this kind of development
Transport Management Systems (TMS)
What are these Logistics Management Systems for? They help companies optimize all processes of transportation. The development of a TMS solves all issues with freight operations. The system allows to:
- keep track of vehicles in real-time via GPS technologies;
- track cargo and couriers;
- simplify collaboration with partners;
- collect and store data.
When you develop a Logistics Management System for transportation needs, you have to ensure its smooth and consistent work on desktop, tablet, and mobile devices.
Fleet Management Systems (FMS)
This kind of software helps improve the management and maintenance of all vehicles from a company’s fleet. Logistic solutions for fleet management enable companies to:
- collect data on all transport assets and expenses;
- support each stage from acquisition to disposal;
- ensure compliance of all processes;
- boost efficiency and reduce fleet expenses.
Custom Logistics Systems
A special kind of logistics software development is individual solutions for ERP (Enterprise Resource Planning). This way, a company receives a package system to achieve specific goals and improve individual “weak spots”, leading to the seamless performance of all logistics operations.
This customized solution will also include:
- a DMS (Document Management System);
- a CRM system (Customer Relationship Management);
- an HR & Payroll Management System;
- an Inventory Management System;
- an Order & Purchase Management System.
IT professionals have created a wide selection of logistics management software. The development of such solutions is the industry’s nearest future.
DEVELOPMENT AND IMPLEMENTATION OF LOGISTICS MANAGEMENT SYSTEMS
You can use two main approaches to apply logistic management technologies – either develop an in-house LMS or a 3PL (Third Party Logistics).
Logistics Management Technologies In-house
The development of an independent Logistics Management System requires a connection with a company’s database that includes inventory, orders, accounting, HR, supply chain management, etc. This shared database is called Enterprise Resource Planning (ERP), and it’s absolutely necessary for running a business. When you have an ERP, you synchronize all reports and automatize lots of back-office operations. This way, it’s easier to implement a trouble-free integration with an LMS to simplify transportation and inventory.
How to have a Logistics Management System in-house:
- The development of a custom LMS. You can hire a professional team that will build you the software to fulfill specific logistic management tasks and strengthen vulnerable spots. This new solution will be safely hardwired into the existing ERP.
- An LMS from a provider. For example, you can apply to a company that developed your ERP system and ask if it provides the functionality for logistics management as well. Nowadays, the industry leaders are SAP, Oracle, Manhattan Associates, BlueYonder, and Infor. These providers usually have a seamlessly functioning system of extensions, APIs, and open integrations.
- An LMS from various providers. This option is easier than the development from scratch. Yet, you have to hire IT specialists to hard code integration between your resource planning database and a new logistic management system.
3PL in Logistics Management Development
3PL companies can help you outsource such logistic operations as warehousing, distribution, and fulfillment. You should provide smooth data exchange with your ERP. The main advantage of using 3PL is your direct interaction with clients who can monitor the entire shipping process.
How to use a 3PL (Third Party Logistics):
- The development of logistics management systems with API (Application Programming Interface). Such integration allows to connect systems by quick data exchange between APIs. These logistics management are excellent for E-commerce.
- The development of logistics management systems with EDI (Electronic Data Interchange). This way, the parties exchange structured documents, usually created by the standards EDIFACT and ANSI X12. return on investment
- File-based integration of logistics management systems. This type of integration applies files in the non-EDI formats to pass information between operating systems or databases. This solution is valuable when a company lacks available APIs. For development, specialists use technologies like Flat File, XML, JSON, CSV, etc.
TOP-5 TENDENCIES IN LOGISTICS MANAGEMENT SYSTEMS DEVELOPMENT
Today, delivery requirements change towards efficiency, transparency, and multichannel options, and that motivates businesses to reinvent delivery channels and formats, improving all processes. E-commerce development drives retailers and logistic companies to introduce new technologies, such as big data analysis, logistic management automation, blockchain, robots, etc.
Platforms
One of the most prominent trends is a transition from individual solutions to platforms. One of the significant examples here is services like Saloodo that allow searching and selecting freight carriers, basically like an Uber for freight transportation.
Benefits of platforms in the logistic management systems development:
- increase in efficiency since using data sets to create new services and optimize logistics;
- improvement of all business processes and solving various problems at once.
Platforms allow integration of processes and participants in a chain, connecting manufacturers with consumers. Platforms help with the logistics management of warehouses and fleets. A single digital platform will enable monitoring legislation compliance and creating a dialogue between government agencies, departments, and businesses.
MVPs
A new trend is a short-time development. A logistic management system can be an MVP (Minimum Viable Product), enough to go to the market. This model uses flexible development methodologies, including an agile approach.
Benefits of MVPs for web development and business processes:
- reduced risks, a chance to try how a new solution works, spot errors and make adjustments;
- logistics management systems become understandable and shorter in implementation (4-6 months);
- an affordable price combined with business value;
- the development according to a client’s needs, pain points, and requirements.
Automation & Acceleration
Speeding up delivery is one of the critical goals of many industries, specifically retail. When delivering goods from several suppliers or warehouses (owned or rented), it’s beneficial to consolidate all goods in one distribution center. Then, using a logistic management system, you track delivery to chain stores. Cross-docking allows you to speed up the process – acceleration comes with picking orders without storing supplies in warehouses.
With E-commerce, delivery goes from a warehouse to a client's address. In this case, it’s relevant to transfer to a 3PL solution all your logistics management operations such as getting a receipt, order processing, and delivery. This solution reduces the time required to complete each procedure.
The need for automation of the logistic management processes is becoming more and more prominent. For example, a typical problem of E-commerce is the lack of daily information about the balance of goods within the entire supply chain. It often ruins the creation of orders. However, a company can solve a problem by developing a logistic management system that automatically controls inventory and supply chains.
Innovative methods
The Internet of Things is a promising direction in logistic management. Remote monitoring of a fleet reduces operating costs by optimizing the equipment’s repair and maintenance. Automatic dispatch systems manage all goods and transport. Innovative technologies can reduce freight costs and increase the transparency of logistics operations.
The current development trend is integrating WMS with high-tech equipment, such as software to optimize loading and pallet arrangement, cargo measurement tools, video surveillance, automatic warehouses and pallet sorters, AGVs, drones, etc.
Robotization
Robotization in warehouse logistic management is increasing big companies’ interest. Yet, warehouses of most companies are still not automated. It’s a promising area for logistic management development.
Benefits of robotization for businesses:
- productivity – results don’t depend on the number of employees;
- precision – reducing mistakes and inconsistencies;
- profit – big companies with a noticeable flow of goods will benefit from automated logistics management.
CLOSING THOUGHTS ON LOGISTICS MANAGEMENT SYSTEMS DEVELOPMENT
Any logistics management system should take into account the specificities and requirements of a particular company. For example, WMS becomes significant if your business needs a system of highly specialized warehouse equipment for storage optimization, order sorting, loading, mobile shelving, etc. They don’t have standardized interfaces for integration, and that creates a challenge for the development. In other cases, the task is much simpler, and specialists only change the configuration of the existing functionality.
Most popular questions
What types of logistics systems are there?
Today, your company can benefit from Supply Chain Management Systems (SCMS), Warehouse Management Systems (WMS), Transport Management Systems (TMS), and Fleet Management Systems (FMS).
What features does a digital logistic system include?
A customized logistic solution will have:
- Document Management System)
- Customer Relationship Management (CRM)
- HR & Payroll Management System
- Inventory Management System
- Order & Purchase Management System
What are some recent trends in LMS development?
One of the most prominent trends is a transition from individual solutions to platforms with lots of connected functions. Another trend is robotization in warehouse logistic management. Short-time development (MVP creation) is also very popular. Innovative methods, automation and the Internet of Things are also today's trends.
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