The indispensable role of technology in the logistics sector

Dr Scott McDonald and Ms Ngo Ngoc Anh Khue from The Business School at RMIT University Vietnam explain the implications in the following article.

In Vietnam’s National Digital Transformation Program for 2025 with a vision to 2030, logistics is one of the eight prioritised industries.

The rush of new technology, especially the use of artificial intelligence (AI), means logistics companies need to quickly change how they work. If they do not, they might lose business to other companies that have already changed.

However, making these changes is not simple. After the year 2019 and the pandemic, logistics companies are dealing with not having enough resources, financial challenges, and the complicated problem of spreading out new technology. To overcome these difficulties, they need to carefully combine new ideas with strong abilities to keep things going. Finding the right balance and making changes in this situation requires smart leadership and flexible adjustments.

A report from 2020 showed that more than 80% of the people who work in logistics get their training while actually doing the work. Another study outlined that a lack of skilled workforce is a barrier to IT application in Vietnam’s logistics firms. This affects about 37.1% of the companies asked. Also, not having enough money stops them from using these computer systems, and this is a problem for 50.5% of the companies in the study.

About 95% of Vietnam's logistics companies are considered small to medium-sized businesses. They typically have limited capital at their disposal and are still in the early stages of IT adoption. This makes it hard for them to improve by means of using technology. Also, these businesses often use different types of software that don't work together well, making it difficult to connect with important parts of the logistics process like Customs and ports.

Because technology and automation are spreading quickly in the global logistics world, companies in Vietnam might end up being left behind and at a disadvantage compared to others. How can they deal with these problems?

One good way to do this is by teaming up with companies from other countries. This helps share ideas and skills. It might mean that local businesses get important help with technology and money. It also helps make better trade connections and opens doors to the global market. For instance, smaller businesses working together with big industry leaders like Maersk can get access to special tools to assist efficient operation.

Dealing with the problem of technology being all over the place in the logistics field, a good solution is to use a single system that brings different software together, making things work better and saving money for companies. Such a system also provides companies with instant information and helps them figure out how to make supply chains more efficient.

Using software that is based on cloud technology is another option, as is looking into AI and machine learning software. These tools can automate many processes, further improving logistics operations and giving accurate results.

Furthermore, companies can try using blockchain. This technology enables information sharing among many people without a main control and resembles a permanent record that everyone can see. This makes things clearer and stops mistakes in the information. Additionally, there are smart contracts that can do many jobs in the supply chain on their own. They can help with orders, payments, and checking if everything follows the rules.

At the same time, it is really important to have a well-thought-out plan to make customers happier. To keep customers more satisfied, companies need to focus on making things like moving vehicles, using technology, and handling storage a smoother process.

Technology is driving Vietnam's economy and how things are moved around the country. With technologies like smart computers (AI), the Internet of Things (IoT), and robots, the way we do global logistics is changing. Can Vietnamese companies keep up with these changes and do well? We will have to wait and see.

Story:

Dr Scott McDonald – Lecturer, Logistics and Supply Chain Management, The Business School, RMIT University Vietnam

Ms Ngo Ngoc Anh Khue – Bachelor of Business student, The Business School, RMIT University Vietnam

Masthead image: Gorodenkoff – stock.adobe.com