January 15, 2024
Tracking at the parcel level: what do we do wrong?
With the incremental development of global business models based on e-commerce and a primary role of logistics and supply chains, the ability of companies to make use of international tracking services becomes a crucial factor in establishing their competitiveness within the ecosystem.
While standard shipment tracking procedures are now insufficient to provide a superior customer experience, we are seeing an increasing use of data-driven solutions. These solutions are based on IOT and AI technologies, which are spearheading the optimization of the logistics industry and its full digital transition.
Parcel tracking: the standard procedure might not be enough
The future of supply chain visibility is about gathering granular information about both products and processes, sharing this information with the right stakeholders at the right time, being able to make sense of the information gathered, and, finally, building an extended supply chain network.
Standard procedures for shipment monitoring may be outdated in the face of a booming digital marketplace: information crucial to delivering an excellent customer experience is often not shared in time; customers may not be able to view the real-time location of their parcel for the first 24 hours of the shipment; data on the real-time location of carriers or inventory stock levels are not automatically shared among the departments involved; information flows are handled with pen and paper or via excel sheets, resulting in delays and wasted time; communications with carriers occur via telephone conversation and are not reportable in a performance analysis context.
In addition, 46.1 million Italian consumers used e-commerce services in 2021¹, while B2C e-commerce is growing at a pre-pandemic pace: product purchases continue to increase (+18%), compared to last year's (+45%), and touch €30.5 billion2.
In short, it seems clear that companies developing e-commerce-based models and, more generally, all those companies using international tracking services, are faced with the need to equip themselves with technological solutions for shipment tracking and supply chain management. These solutions cannot do without data.
"In 2021, 46,1 million Italian consumers used e-commerce services.”
Data collection: a key step for the modern supply chain
As consumers, we order more items online than ever before. For more than 7 out of 10, parcel tracking for our online orders improves our confidence in shopping on e-commerce channels3.
This consumer confidence must be matched, in line with international trends, by an equal effort by companies to provide an optimal customer experience, starting with international tracking, moving through collaboration tools between departments of the same organization or with third parties, up to real-time communication of all the data of the supply chain traveled by the individual parcel.
“Parcel traceability improves trust in purchases on e-commerce channels”
These goals, however, are achievable only by harnessing the vast amount of data that can be extracted by harnessing the potential of digital solutions for logistics: in this case, we are talking about data-driven solutions.
These are systems that automatically collect, normalize and analyze huge amounts of data on shipment tracking and more generally on the entire supply chain in order to ensure full visibility of the entire chain, improve process management and cut costs.
Through a data-driven approach, companies are now able to optimize their supply chains and respond increasingly effectively and in real time to consumer demands, with greater efficiency than ever before.
IOT & AI for the optimization of logistics
Innovative solutions for international tracking and, therefore, supply chain visibility, contribute greatly to the mighty paradigm shift that the logistics industry has been facing in recent years, a revolution that is called the digital transition.
This revolution, however, relies on a few essential components, including the Internet of Things (IoT) and Artificial Intelligence (AI).
In the first case, we address all those field devices that enable the monitoring of shipments, possibly in real time, by transmitting a series of data and information – including location, temperature, humidity, etc. – which are essential to the smooth product flow in the supply chain.
In the second case, declining the very broad topic of AI in the world of logistics, we are talking about applications that, thanks to different Machine Learning models, bring greater autonomy to processes that in the past were carried out manually: in fact, there are software that can automate data management and sharing processes, manage unpredictable phenomena such as traffic intensity at a time after analysis, establish the optimal timing for an unloading operation or the ideal amount of warehouse stock.
A concrete example of digitalization in e-commerce can be given.
Once orders are received from customers, there is real-time integration with the WMS (Warehouse Management System), which shows inventory. Orders are prepared and packages are realized in the warehouse, following the picking activities governed by the WMS.
An optimal digital solution would take care of creating for each order the parcel label of the courier responsible for delivery to the end customer. The courier would then have a mobile app that would allow them to create and manage delivery/pickup routes, enabling them to decide how often a route is to be repeated, the locations that are to be visited, and the activities to be performed at each location. At the time of pickup and at the various transit steps in intermediate hubs, up to final delivery, integration with the courier's information systems would enable tracking of the package as a necessary service to the end user or customer care.
Knowledge of warehouse processes and integration with third-party systems (of the various couriers) would then enable very strong visibility, which is now a standard requirement of those who want to make e-commerce and their supply chain a winning model. From start to finish.
Complete supply chain visibility is only possible through tracking and transparency. Companies adopting e-commerce models, assigning logistics and supply chains a primary role, and providing international shipment tracking services need to implement innovative and flexible technology solutions to gain a competitive advantage and ensure an optimal customer experience. With the increasing deployment of these solutions, the logistics industry can move toward a digital transition that will bring added value to all players.
1. See the article by PharmaRetail
2. See Dati eCommerce: nel 2021 gli acquisti online valgono 39,4 miliardi (+21% rispetto al 2020)
3. See the article by Whistl