LOGISTICS IN THE DIGITAL AGE: TRENDS, TOOLS, AND TRANSFORMATION

Mexico is growing as a logistics hub thanks to its multiple trade agreements with several countries and its strategic location, which triggers an opportunity for economic and commercial growth for its industry. However, experts share in interviews and news articles their concern that Mexico may not be able to take full advantage of these opportunities.

Several factors have begun to affect nearshoring or the closure of some FDI projects in Mexico, among them: insecurity, infrastructure and lack of digitalization.

In the logistics sector, digitalization and the adoption of new technologies are the most important differentiator, as they allow us to reduce time, costs and increase security. 

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Technology in logistics

The issue of technology adoption in Mexican companies is lagging behind, and this is mostly due to lack of knowledge and lack of information on the scope that the implementation of systems such as ERP, TMS or WMS can have in their supply chains.

The resistance of workers to modify their usual processes to carry out daily tasks represents an obstacle in the implementation of new technologies, without knowing that the new operating systems can lead the company to reduce logistics response time by up to 50%.

Factors that lead to failure

Companies are aware that logistics directly reflects the image that the company projects to its market, and this is why they seek to implement some technological solutions. However less than 20% of these digitization projects in their supply chains achieve their goal.

Did you know that only 1 in 7 companies manages to successfully digitize their supply chain? In some cases, it is because companies seek to adopt basic solutions that are cheaper, and these end up exposing the company to security risks, in addition to increasing their operating costs and response times.

Key points to achieve a successful digitalization

A key factor for a successful digital transformation is precision at the beginning of the project. One recommendation for a successful implementation is to focus on improving the value proposition, analyzing the market segments in which you compete, since many times companies invest in systems that will not have a positive impact on their operations.

The second recommendation is to question what impact will have on your market, your customers and your financial results, in order to assess whether you really need this implementation or if you could benefit from another one.

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Technology and digitalization is crucial to the success and competitiveness of logistics, but it is not the only determining factor. Human capital and its proper training, security in logistics and public infrastructure are essential elements for Mexico to take full advantage of nearshoring and attracting FDI. 

Despite the challenges that the industry presents, our country has potential and an encouraging future in economic and commercial terms.