Logistics Software

Introduction

Logistics software is the name given to a category of software solutions that assist businesses with various logistics, shipping, warehousing, and transportation functions. This can include everything from inventory control, barcode scanning and label printing options, right the way through to order management, transportation management, vendor management, and customer relationship management tools.

Software for logistics can serve as a central location, where users can view, manage and monitor essential information related to logistics, and carry out activities that can assist with overseeing the movement of goods from the supplier or manufacturer to the eventual end-user. The software can be used by several businesses but is most commonly used by eCommerce brands, shipping or delivery companies, and other online sellers.

Logistics software is also known as a logistics management system or as logistics planning software. Regardless, effective use of software in this category can help companies manage their inventories more accurately, improve the efficiency of many logistics-related activities, and understand any relevant areas where improvements may be needed. Moreover, logistics solutions allow companies to automate many associated processes, reducing costs and preventing tasks from being overlooked, while freeing up more staff time.

In many cases, logistics solutions can be integrated within existing workflows and options for integration often exist between logistics software, supply chain management software and warehouse management systems. This ultimately allows the software to function effectively alongside these tools, and also helps organizations to share data between the applications and reduce the amount of time that needs to be spent moving between different programs.

Most logistics programs will also have significant crossover with transportation management systems. In some cases, the use of a high-quality logistics solution may even negate the need to invest in a dedicated transportation management solution. While specific features included within logistics packages can vary, especially given the fact that different options will target different business types, there are several core features, and these will allow users to:

• Keep track of the most essential inventory information, and order new stock when supplies run low
• Manage transportation options and continually track the current status of a fleet of vehicles
• Outsource various delivery or shipping needs to third-party logistics (3PL) businesses
• Manage interactions with customers, clients, business partners and/or prospects, and monitor demand
• Create, organize, and maintain a database with all of the key information about suppliers/vendors

What is logistics software?

Logistics software describes a category of software solutions intended to assist businesses with several logistics-related needs. Generally, these solutions will serve as a means of centralizing important information, making it easier to find data and keep track of operations, while also allowing core tasks to be carried out from a single location. Furthermore, logistics solutions will allow many activities to be automated, which can help to save time and money.

Some specific functions or areas of focus typically associated with software for logistics include order management, transportation management, shipping, customer relationship management, warehousing, and inventory management. Vendors and third-party logistics companies can be managed through many solutions in this category, and the best tools will include options for tracking and managing a fleet of vehicles too.

Logistics software is most commonly associated with eCommerce businesses, delivery companies, and shipping companies. However, solutions of this kind may be used by any organization involved with the movement of goods and with requirements to track that movement from the supplier or manufacturer, all the way to the customer or end-user. A logistics management system can function alongside supply chain, warehouse, transportation, and fleet management solutions. However, the features provided may also reduce the need to invest in some of those standalone tools.

What are the benefits of logistics software?

The benefits of logistics software for Canadian businesses generally focus on making important information more accessible, providing users with options to track key logistical data, and offering reliable options for automating some of the more routine, predictable tasks that take up unnecessary time and effort when carried out manually. Furthermore, it is worth exploring some of the specific advantages linked to logistics programs, so that their value can be further contextualized. In particular, acquiring software of this kind will have the potential to deliver the following benefits:

• Improved accuracy: Logistics software can greatly improve accuracy within an organization, and this can be evident in several key areas. For example, inventory tracking allows businesses to form a much more accurate picture of current stock levels and trends. As much of this process can be fully automated, with individual items being scanned as they either leave or enter a warehouse, the business can gain highly accurate data on how much stock they have and how quickly stock levels are declining. Logistics solutions can generate reports and provide accurate information to the accounting and finance departments of an organization, which can help to improve the accuracy of their forecasts and financial reports. Moreover, tracking all of the information surrounding orders and transportation means that more accurate details can be given to customers, clients, business partners, or vendors, resulting in greater clarity and improved communication.
• Greater efficiency: The use of logistics management software can significantly boost efficiency and can occur for several reasons. Firstly, logistics solutions generally serve as a comprehensive or all-in-one solution, allowing many different tasks to be carried out. This removes the need to utilize multiple applications to carry out these core logistical activities. Secondly, the automation options provided mean that many of the more routine, predictable, or repetitive actions that need to be carried out can be completed without requiring a human staff member to perform them. Such automation ensures that these key actions can always be performed on time while guaranteeing that none of these tasks is accidentally overlooked during the busiest periods. Thirdly, the automation component means actions can be performed at any time, without requiring downtime or rest periods, meaning orders can be placed and communications can be sent to customers on a 24/7 basis.
• Centralized information: Another major benefit associated with logistics solutions is the ability to keep information related to shipping, warehousing, inventory control, transportation, order management, vendor management, and customer relationship management in a single place. This can help streamline data collection and storage because it reduces the kind of data duplication associated with using multiple applications for these functions. The centralization also makes it quicker and easier to find important information, which can ultimately result in improved productivity, while accessibility is improved because employees only need to be able to access one software solution for all of the included features, instead of having to access numerous applications.

What are the features of logistics software?

The features of logistics software aim to assist businesses with all of the most critical issues related to stock control or inventory management, shipping, customer relationship management, vendor management, and transportation management. Furthermore, there can be substantial differences, depending on whether the software in question is an enterprise-level solution or a more basic application. Nevertheless, most options on the market will include similar core features, and this will usually include those outlined below: Inventory management: Track the number of items in stock, and access real-time inventory information, on-demand. Most of the best solutions will include barcoding or radio-frequency identification (RFID) options, allowing inventory to be scanned as it enters and leaves the warehouse. This, in turn, allows for much more accurate tracking of inventory numbers and also allows this information to be updated automatically, rather than manually. Best-in-class logistics software will also provide options to set up alerts when stock levels reach a defined threshold, and there may also be automatic reorder options, allowing new orders to be placed when that level approaches. This guarantees that an organization always has enough stock to carry out core operations and meet customer demands. The use of automation tools also allows new stock to be re-ordered at the best possible time and avoids situations where a business overlooks a particular item or forgets to place a new order.

• Order management: Collect information on orders, and store this data for future reference. Order management functionality will typically allow users to view the details of specific orders, such as which items have been ordered, how much the customer paid, what shipping option they selected, and more. Not only can this help to influence activities related to dispatching orders and getting them to customers, but the order management section of logistics software can also provide updates to those customers and enhance the quality of customer service.
• Transportation/fleet management: Organize transportation and manage a fleet of vehicles. The transportation features may include options to organize transportation or shipping so that a product can be moved from a business to a customer or end-user. Within this area of the software, there are likely to be several options to choose from, so that the business can select the best transportation for each order. Meanwhile, for organizations that operate their fleet, there will be tools for managing individual vehicles, tracking their maintenance status, ensuring compliance with relevant regulations, and tracking their location in real-time. All of this means that an organization can monitor the progress of delivery, or ensure its fleet is well maintained.
• Third-party logistics (3PL) management: Outsource responsibility for delivering products to third-party logistics (3PL) companies. In many solutions, this feature will allow a business to maintain a database of 3PL companies they have worked with in the past or those who they may work with in the future. This can include contact details, records of previous deliveries that required 3PL services, and options to place a new request for services. For eCommerce businesses, outsourcing responsibility to a third-party service provider can help to keep processes simple, and their specialist skills can be used to provide customers with quick and reliable shipping.
• Customer relationship management: Create and maintain a database with the essential information related to customers. This can include identifying and organizing leads, maintaining contact information for customers and business partners, and establishing a record of all interactions a business has with clients, customers, business partners and prospects. Ultimately, the customer relationship management component of logistics software will allow businesses to follow up on previous requests, pass on customer issues to another employee, and improve the consistency of communication. Meanwhile, away from enterprise logistics solutions, there may also be integration options in this area. This will generally allow the logistics software to access data from a third-party customer relationship management or CRM solution. This can be important for matching orders to specific customers and accessing previous communication between the business and the customer.
• Reports and demand planning: Access reports and a dashboard containing the most critical information, so that it is easy to view up-to-date details on stock levels, expenditure, revenue, and other KPIs. Through the use of the reports function in most logistics solutions, it is also possible to gain a deeper understanding of current levels of demand and trends in this area. As a result, businesses can more easily prepare for rising levels of demand and finalize plans to meet the needs of customers, clients, and business partners. This also allows plans to be put in place for those times when demand drops, to avoid long-term inventory issues.

What should be considered when purchasing logistics software?

Before purchasing a logistics solution, several factors must be considered. Buyers need to know that they are not only acquiring a high-quality solution but also that they are investing in a solution that meets their specific needs. An effective way to approach this is to ask several key questions and work through the answers so that the most viable options can be identified and less viable options can be eliminated. Some examples of the types of questions to ask to include the following:

• Should buyers opt for enterprise or integrated software? Logistical operations within a business can cover many different areas, including order management, customer relationship management, fleet management, supplier and vendor management, and even accounting. Some logistics planning software can be described as enterprise software and will cover most of these areas, or potentially all of them. By contrast, other apps on the market are more basic in terms of their range of features, but they provide integration options with fleet management software, CRM software, and other third-party applications. Therefore, buyers need to think carefully about which of these two approaches will be best for their needs. Businesses already using a variety of other software packages may opt for an integrated logistics solution because these can fit seamlessly into an existing ecosystem, while newer organizations may opt for the simplicity of a single enterprise-level solution. However, there are advantages to using third-party options for some operations, and this issue needs to be carefully weighed up.
• How much does logistics management software cost? Buyers need to be aware of the issue of cost, and considerations in this area need to go deeper than simply looking at the base price of the software. Logistics software can be complex, with cross-departmental functionality, this means overall quality is important. Therefore, while it is essential to stay within an agreed budget and there is a clear benefit to finding the most affordable option, it is better to focus on the value. After all, it is wise to pay more money for a better product. Beyond this, the issue of cost is further complicated by some hidden expenses. For example, there may be costs associated with setting the software up or teaching employees to use it properly. There may also be subscription fees for cloud-based solutions, and costs associated with issues like data storage.
• What is the best software deployment option? Another key consideration that buyers need to ponder before acquiring logistics software is the preferred deployment option. On-premise deployment is the more conventional approach, where a buyer pays for the software licence and then takes responsibility for installing the software on company systems and storing the data associated with the program. With this approach, upfront costs are high, and long-term costs are generally low but unpredictable. The alternative, gaining in popularity all the time, is cloud-based deployment. This approach relies on third-party service providers, who deliver their applications on a Software-as-a-Service (SaaS) basis. The service provider is responsible for deploying the software using cloud technology and storing data in the cloud. Upfront costs are low, and long-term costs are predictable because payment involves an ongoing subscription—usually with monthly or annual fees. Setup is effortless, and all that is needed is an internet connection and a compatible internet-enabled device. The cloud-based approach provides advantages in terms of remote and mobile accessibility and allows data to be updated across the board, for all users, in real-time. Maintenance is usually handled by the service provider, whereas on-premise deployment relies on the end-user for any maintenance work. Ultimately, the decision on which deployment option is right will depend on several factors, including a budget, remote access requirements, and existing infrastructure.
• What business types has the software been designed for? Software for logistics is not created equally, and while some solutions are aimed at a broad audience and have a wide range of features, others will target specific types of businesses. It is worth taking the time to consider the precise target audience for each solution and to ascertain how suitable each option is likely to be. The needs of an international shipping company are likely to be substantially different from the needs of a relatively small eCommerce company, and software choices may reflect this. Buyers should take the time to research the available options and opt for the one that includes the necessary features while being targeted at the right kind of business.
• Can the logistics software solution scale up and down? Finally, it is essential to consider whether a logistics solution can be scaled up and down easily. If a business grows, various logistical operations are likely to become more complex. However, there are significant costs associated with changing software and ensuring all data is compatible with the new solution, which is why this should be avoided, if at all possible. Instead, buyers need to find an option that can scale up and down, as needed. When the right level of care is taken, a business can continue to use the same software, regardless of whether the company increases in size, or needs to downsize for any reason.

What are the most relevant logistics software trends?

The most relevant logistics software trends largely centre around how the relationships between businesses and their employees and customers are changing through the emergence of new technology. It is, however, important to fully understand the main trends, as these will influence how logistical operations are carried out shortly. Furthermore, buyers must look for software solutions that have been designed with an awareness of the emerging trends, as this can help to ensure software acquisitions are as future-proof as possible. Some of the most significant focus areas are explained below:

• The value of forecasting: Improvements to the accuracy of artificial intelligence, coupled with the increased volume of data that the average business collects, have helped to improve forecasting within organizations, allowing them to gain a better sense of when changes in demand are likely to occur, and providing insights into some of the external factors that can influence demand levels. As this technology continues to improve and is more widely implemented within logistics software solutions, businesses will likely be able to take a more strategic, forward-thinking approach to many logistical issues, rather than reacting to changes as they occur. Furthermore, analysis of relevant data collected through a logistics solution can help to highlight interesting areas of opportunity. It may be sensible for buyers to prioritize software options where AI technology is implemented to assist with forecasting efforts, as this will help to avoid a future need to shift to a solution that offers this.
• Growth of work from home arrangements: It is a modern reality that many workers who carry out tasks relevant to logistics within an organization may no longer be working on-site at all times. A growing number of businesses have embraced remote working, or have offered hybrid work models to employees, which means some of the actions related to transportation, warehousing, inventory control, and vendor management may now be carried out by staff working from home. Furthermore, delivery companies and eCommerce businesses may also have field workers, who are partially managed through logistic software. All of this makes it imperative that organizations invest in software solutions that can be accessed remotely, and used on a wide range of devices. Both of these areas of need are factors in the rising popularity of cloud-based deployment. However, needs may extend further, and buyers should consider issues like mobile accessibility.
• Metaverse technology and eCommerce: Finally, eCommerce businesses will need to get to grips with the concept of the metaverse in the future. Essentially, the metaverse can be defined as a 3D virtual world where users interact with others through an avatar. The metaverse is commonly linked to virtual reality, augmented reality, and ideas of gamification, and it represents an opportunity for businesses to connect with customers in a non-traditional space. Capitalizing on the metaverse requires investment in the right technology and a period of preparation. There are also some unresolved issues in this space, such as those related to data collection and cyber security. Nevertheless, as metaverse interactions increase, logistics software will need to be up to the task of collecting relevant customer communications data and offering integration options with the associated devices, such as VR headsets.

Sources

The features highlighted were identified based on their relevance and the percentage of products in Capterra’s directory that offer them. The following sources were used for this document:

1. Productivity when working from home: 7 insights from Canadian employees (Date accessed: Wed, June 21, 2023)