What is Logistics Information System: Your Guide to Smart Logistics


What is Logistics Information System: Your Guide to Smart Logistics

The global logistics market valuation is projected to be USD 12975.64 BN by 2027. Also, the global logistics management software market is predicted to be USD 18.31 Billion by 2030. 

Still, IBM reports that 72% of Chief Supply Chain Officers expect at least 3 to 5 years for process and workflow automation, 77% are grappling with the increased cost of transportation and logistics, and 80% of them feel toyed by the demand volatility.

This is because of the lack of a centralized logistics information system that could help manage, monitor, track and control all the logistics processes via a single dashboard. Such an integrated system has the power to overcome operational silos, variance, and redundancies brought by multiple partners and ensure high efficiency via smart optimization across the entire ecosystem.

But then again, what is a logistics information system, and how does it work? What are the various components of a logistics information system, and what benefits does it offer to businesses?

Here, we explore the answers to these and many other questions.

What Is Logistics Information System and Why Is It Important

Logistics Information System or LIS is a set of highly advanced digital programs running on integrated software infrastructure that is implemented to facilitate smart management and data-driven decision-making in logistics. The LIS helps businesses to plan and strategize to optimize their logistics operations and empowers them to effortlessly manage the operations such as procurement, storage, order picking, shipment tracking, transportation, etc.

The Logistics Information Systems ensure a continuous and seamless flow of information between multiple parties involved in a supply chain, such as designers or manufacturers, 3PL partners, carrier partners, freight forwarders, Last Mile operators, etc. By aggregating all the logistics service providers (LSPs) and every stakeholder in the entire supply chain, LIS helps make all the operations better, smarter, more transparent, and more efficient.

Depending on the type of processes or operations that need to be automated or managed, the logistics information system can have different components, such as:

  • Transport Management System
  • Last Mile Delivery Management System
  • Shipment Tracking System 
  • Freight Procurement System
  • Container Tracking System
  • End-to-end Delivery Orchestration and Management System
  • Dispatch Management System
  • Courier and Parcel Management System
  • 3PL/Courier Aggregator Management System

Further, as the logistics and supply chains evolve, the roles and capabilities of all these systems also evolve. With the incorporation of advanced computing technologies such as AI, ML, Data Analytics, Big Data, Data Visualization, etc., these systems are offering cutting-edge functionalities to make the entire logistics and supply chain ecosystem more optimized, more cost-efficient, and highly integrated. 

Another important offering from these Logistics Information Systems is the ability to have a real-time grasp over all the operations, all the stakeholders, and all the orders down to the individual shipments. 

The Logistics Information System can effortlessly integrate with the existing system infrastructure, such as WMS, OMS, ERP, CMS, etc., to offer a highly comprehensive dashboard-like interface for centralized management, monitoring, communication, collaboration, and much more.

We discuss the core capabilities and functional benefits of Logistics Information Systems in the next sections. 

Role of Logistics Information System

Apart from the various functionalities shared above, the Logistics Information System (LIS) also helps in getting centralized records and reports to aggregate, analyze, validate and visualize data from all the supply chain components for strategic decision-making.

LIS empowers businesses to deliver highly optimized services and orchestrate highly resource-efficient deliveries that lead to delightful customer experiences at the lowest cost. It helps plan and control numerous activities, such as order fulfillment, shipment tracking, real-time shipment/rider/order status, compliance management, etc.

Advanced Logistics Information System also comes with the ability of dynamic optimization, route planning as per multiple optimization constraints, and on-the-go order clubbing. It helps businesses to share the dynamic ETAs with the end customers to offer a wholesome CX with detailed insights into the leg-to-leg order movement. 

In case of any delays or exigencies, the customers get automated alerts and notifications for the same, along with the reasons. Also, the automated LIS offers digited documentation with security for online document handling, processing, and automating the customs clearance process. 

The Logistics Information Systems with smart capabilities, such as Shipsy, also help businesses generate and print labels automatically for all their shipments, as per the specific requirements of carrier partners. Businesses can do highly efficient resource planning, reduce inventory requirements, absolve the optimization pockets left by manual planning and make better decisions.

Components of Logistics Information System

Transport Management System

TMS stands for transport management system (TMS), which helps businesses automate their transportation processes. TMS solutions offer a smart interface to plan, monitor, track, and manage multiple logistics operations via a unified dashboard. Enterprises can also leverage TMS for the management of logistics partners and to get a 360-degree view of all the operations related to logistics.

Last Mile Delivery Management System

The Last Mile delivery management system offers smart Last Mile orchestration and management, which means it focuses on the journey of a shipment from the destination warehouse to the end customer. 

The system works with existing infrastructure, such as ERP, and helps orchestrate faster deliveries via zone/geofence-based driver allocation, smart routing, and optimization. As businesses are able to manage delivery professionals, orders, and customer communications from a single dashboard, they are able to reduce the Last Mile delivery costs and errors and can unlock high CX standards.

Shipment Tracking System 

This system helps businesses to track and monitor shipments in real time with granular leg-to-leg movement updates. Shipment tracking helps reduce incidental costs, such as detention and demurrage, and also improves the operational visibility of businesses. 

This Logistics Information System offers automated alerts and notifications that are also predictive, analytical, and reporting-type. Thus, businesses can not only get real-time notifications of different kinds, but they can also get alerts for future risks or signs of impending delays automatically. 

Finally, all these alerts can be shared with the customers in real-time, automatically, and that too in a customizable manner.

Freight Procurement System

RFQ management, shipping lines management, queries, transactions, spot inquiries, and booking the most profitable shipping lines that delivery high-quality services at the best prices – an automated Freight Procurement System does all this and much more.

This LIS enables businesses to engage with unlimited vendors and get the best deals on cargo shipping rates every time. They can unlock transparent and efficient bidding and also find instant global freight pricing and market intelligence for rate management at the same place. 

All in all, this helps businesses reduce their freight costs, overcome invoicing and auditing challenges, reduce the manhours in shipment dispatch, freight management, etc.

Container Tracking System

This LIS works more or less like a shipment tracking system, except that it offers container tracking capabilities. Container tracking software gathers data from multiple sources to track the location of specific cargo in real time. 

This logistics information system comes with a customizable dashboard that provides a 360-degree view of all the container movements in real time. 

End-to-end Delivery Orchestration and Management System

This logistics information system comes as a wholesome solution with diverse capabilities and functionalities, such as route planning, order management, route optimization, shipment tracking, 3PL management, label generation, and much more.

This system helps businesses manage all three miles, namely – the First Mile, Middle Mile, and Last Mile operations in a supply chain. This integrated system helps businesses manage, control, monitor, and track all logistics activities with smart built-in AI routines. 

Dispatch Management System

Dispatch logistics refers to the transferring of a product from one place to another place and comprises services, as well as transportation assets, such as vans, riders, etc. Dispatching involves planning, managing, tracking, and controlling the entire set of logistics operations.

A LIS for dispatch management coordinates the movement of goods and materials within the entire supply chain and helps businesses ensure that shipments arrive correctly and timely at minimum delivery costs. It manages on-field performance and ensures that the day-to-day operations run smoothly.

Analytics and Reporting

This logistics information system allows businesses to gather, process, understand and leverage the organizational data for driving intelligent business decisions. The system helps businesses generate data-rich reports for multiple system components from multiple time frames as per different criteria. 

These reports can be shared, managed, exported, and visualized as and when required in multiple formats. This LIS drives agility, reliability, and data-driven growth in a business model.

3PL/Courier Aggregator Management System

This logistics system helps businesses manage all the carrier/3PL/logistics partners from a single dashboard. Businesses can get suggestive nudges for choosing the most profitable service providers, get the best contractual rates and enforce standardization across multiple partners, which instills efficiency.

They can compare the services provided by different vendors and have the upper hand in negotiations as well. This LIS enables businesses to widen their reach and serviceability as well by adding different 3PL providers for different types of deliveries.

Now that we have a comprehensive understanding of logistics information systems, let us move on to discuss the various benefits of implementing them.

How Logistics Information System Solves Supply Chain & Logistical Challenges: Benefits of Implementing LIS

Reduced Operational Costs

With an integrated dashboard for managing all the stakeholders, processes, operations, and shipments, smart LIS helps businesses overcome redundancies and uncover hidden optimization pockets. They can optimize the processes with smart in-built algorithms, plan and create highly efficient routes and opt for the most profitable combinations of vehicles and riders.

Businesses can also automate the billings, invoicing, documentation, etc., which reduces operational costs, such as vehicle lease costs, fuel costs, staffing costs, warehousing and distribution costs, delivery costs, etc.

The logistics information systems also come with AI-powered algorithms for the integrated management and smart customization across the entire ecosystem.

Visibility and Tracking

LIS offers 360-degree visibility over real-time order movements right from the origin to the destination in a single place. Thus, businesses no longer have to make calls or track every order individually. 

Also, the LIS enables businesses to send real-time customer communication across multiple channels, such as emails, texts, SMS, chats, etc., for real-time tracking of delivery, accurate ETAs, and transparent operations.

This boosts customer engagement and improves CX, helping businesses cut down the following costs at the same time:

  • Inefficient route planning 
  • Fake delivery attempts
  • Driver deviating from system-generated routes etc

Efficient Delivery Orchestration

With more than 2.14 bn people buying goods and services online, and 70% of them shopping from foreign websites, the supply chains are becoming costlier, more complex, and more vulnerable to business risks. LIS helps businesses orchestrate deliveries efficiently and smartly without any cost leakages across the entire journey. 

Lost shipments, mislabeled packages, and late deliveries – are some of the challenges for businesses with exponential consequences. Further, the majority of Last Mile operations are generally handled by the 3PLs or corporate LSPs, which makes it hard to control these challenges manually.

Logistics information system with smart capabilities helps businesses to unlock:

  • Multi-channel communication for tracking and monitoring the logistical movements
  • Maximum first-attempt delivery success 
  • Real-time communication, collaboration, and working with customers, and service providers
  • Apps and gamification for cost-efficient field operations
  • Validation and authentication modules for non-delivery reasons 
  • Work with multiple logistics partners to aggregate the delivery operations
  • Leverage geocoding, address conversions, and real-time data analysis for accurate deliveries
  • Utilize AI routines for route planning and optimization and make their deliveries timely and cost-efficient 

Smart Automation

Automating a single part or single process gives only partial results, thereby adding to the system overheads and devoiding businesses to unlock operational scalability. On the other hand, incorporating a full-fledged logistics information system that helps automate end-to-end delivery operations, solve complex logistical puzzles, and overcome the management of multiple parties works wonders.

Businesses can manage everything from a single unified dashboard, leverage data insights for optimizing the existing processes and drive profitability in their supply chains. 

Further, the LIS with smart AI routines is easy to integrate with multiple existing systems, such as WMS, OMS, ERP, CMS, etc. 

Thus, businesses can scale well and unlock huge returns on their investments.

Lack of NDR Standardization

Retailers working with multiple 3PLs often face difficulties in managing and addressing non-delivery reasons (NDRs) as every logistics provider has its own way of naming them. Also, poor communication with customers makes validating NDRs extremely challenging. 

This inability to arrest fake delivery attempts poses significant challenges with regard to validating NDRs. Inefficient ways of actualizing last-mile deliveries can cost up to 53% of logistics costs, and during the festive season, 1 out 5 deliveries are returned even before reaching the customer. 

Logistics information systems help businesses overcome these challenges by standardizing the status and information across the entire supply chain.

Improve Customer Experience

Irrespective of the own fleet or 3PL, the logistics information system sends unified communication in your own branding to customers via SMS and WhatsApp. Businesses can enhance first-attempt delivery volumes and reduce RTOs by arresting and validating fake delivery attempts.

They can boost customer engagement via branded tracking pages and position related products as ads to boost order volumes. They can also offer multiple payment options like COD, QR code-based, UPI-based, digital wallets, and more. Finally, businesses can also allow customers to reschedule deliveries/returns and accurately capture their feedback.

Improved Delivery Tracking & Management 

LIS, such as sophisticated driver apps, enable riders to see, manage and execute pickups and deliveries in a highly controlled and smart manner. The riders can get real-time and digitized PoD with customer signature and OTP-based delivery success validation.

The centralized tower offers real-time tracking of delivery progress and delays with predictive and dynamic ETAs. Automated COD reconciliation and petty cash management processes also make transactions more secure.

Shipsy: Logistics Information Systems for Smart Logistics Management & Orchestration

Shipsy is an AI-powered end-to-end supply chain and logistics management platform that helps businesses of all types and all scales to orchestrate highly efficient and optimized deliveries. 

Shipsy’s smart offerings help businesses manage their transportation, distribution, dispatch, riders, 3PL partners, shipping operations, courier operations, and quick delivery operations across domestic and international borders. 

We offer different platforms for catering to different types of industries, such as:

  • Freight Procurement
  • Shipment Tracking
  • Route Optimization and Planning
  • First Mile Pickups
  • Middle Mile
  • Last Mile 
  • Courier Aggregator
  • On-Demand Delivery Management

These smart offerings have helped businesses across the globe overcome orchestration and management challenges to unlock business value in multiple forms, such as:

  • 64% Increase in customer experience  
  • 30% Increase in order pickup within 24hrs
  • 24% Enhancement in on-time deliveries
  • 14% More deliveries per rider
  • 12% Reduction in last-mile delivery costs
  • Ensure 10 mins delivery adherence

For more information and to get started with the most comprehensive logistics information system with advanced capabilities, please schedule a customized demo with our experts today!


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