DIGITALISATION IS AT THE TOP OF THE AGENDA FOR SMES

Digital transformation is a key challenge. Companies, associations and politicians recognised years ago that digitalisation is necessary to secure the international competitiveness of individual companies and the entire German economy. Recent studies show that digitalisation has now also arrived in medium-sized companies - and not only in perspective as a strategy, but increasingly also in operational practice. For many German companies, digitisation offers considerable opportunities. It is a great potential to not only maintain but expand one's own market share - and thus to secure the long-term success of the company, also in international competition.

THE IUBH STUDY SHOWS: GERMAN LOGISTICS COMPANIES OFTEN STILL HAVE NO CLEAR DIRECTION

Erfurt, 16 March 2020 - A current study by the IUBH International University of Applied Sciences on the topic of "Transport & Logistics - Digital Transformation LSP 2019", led by Prof. Dr. Hubert Vogl, looks at the question of how digitalisation is going at logistics service providers (LSP). For this purpose, expert interviews were conducted and evaluated with 35 managers from the logistics and transport sector between October and December 2019. The qualitative study focused on two questions: Where do German small and medium-sized logistics service providers stand in the context of their digital transformation, and how do they approach this sensitive and at the same time highly dynamic development process? Is the approach primarily characterised by externally driven actionism, or is the development process guided and supported by systematic and strategy-oriented maturity development?

Digital transformation is now also at the top of the agenda for logistics service providers. Companies are working intensively to optimise their processes, products and services through the use of digital technologies. However, the majority of the logistics companies surveyed still have a need for action in the systematic, holistic and strategy-oriented approach. For example, less than half are pursuing a holistic digitalisation strategy, and only around one in three companies is actively approaching its customers to communicate the added value of its digital ideas and solutions. In terms of focus, significant differences between transport and logistics service providers can only be seen in a few exceptional cases; both face similar challenges.

The digital transformation is in full swing, the challenges are enormous

Digitalisation has not only arrived at German logistics providers, it is being actively driven forward, both in the transport sector and in the contract and supply chain sector.

Logistics service providers have recognised that they have to free themselves from the external control that has manifested itself over many years and decades and from a pure focus on the implementation of customer specifications. The paradigm of the zero error philosophy, which has prevailed in logistical value creation processes up to now also due to the requirements from quality management, makes it additionally difficult for LSP to undertake the cultural change that is necessary for a successful digital transformation and a positive handling of errors.

In addition, customers are often still uncertain about their strategic orientation. They first have to deal with the digital transformation and the associated challenges themselves. As a result, entire business models are put to the test and have to be readjusted. This also has an impact on their logistics service providers, because industry and trade are taking a back seat when it comes to formulating digital specifications and requirements. In addition, important industrial sectors such as the German automotive industry are facing large-scale structural change: output volumes are falling, and with them the capacity utilisation of logistics service providers. On the other hand, online trade, parcel deliveries and freight transport have been growing steadily for years and demand innovative and agile logistics and transport concepts.

Logistics service providers must differentiate themselves more strongly and act in a more self-determined manner

Both innovativeness and agility require a high degree of self-determination, proactivity and clear strategic orientation. But self-determination must be learned - also and especially by logistics companies in times of digitalisation. Both managers and employees must not only learn new cultural techniques for this, but also expand their professional skills and competences. Establishing a maturity-oriented change management can support and even accelerate the digital transformation process of small and medium-sized LSP. And moreover, this approach can help to successfully manage the next steps towards self-determination.

About the person

Hubert Vogl teaches at the IUBH as a professor for logistics management, in addition he is the study programme director in this subject area. His focus is on procurement and production logistics, logistics services and supply chain management. His research activities focus on digital transformation processes in SMES and innovative sustainability concepts in supply chains. During his former position as managing director at the Scherm Group, he completed his doctorate in the field of "start-up maturity management in contract logistics". Parallel to this, he developed customer-specific quality standards for logistics processes as head of the "Logistics Service Providers" working group at the German Association of the Automotive Industry (VDA).