Vanderlande

In today’s rapidly evolving technological landscape, the concept of Industry 4.0 has emerged as a game-changer across various sectors. The parcel industry is no exception as Courier, Express, and Parcel (CEP) companies strive to stay ahead of the curve in a hyper-competitive environment where customers’ expectations for faster and free deliveries are on the rise. Coupled with a shortage of skilled labor and fluctuating e-commerce trends, these factors have brought parcel operators to turn towards increased automation and digitalisation to optimize their sorting and delivery processes. 

 While the parcel industry has made use of data for many years to improve their customer’s experience and streamline operations, one critical area is often overlooked: parcel sortation centers. As the purpose of these hubs is to get parcels in and out of the door as quickly as possible, investments in robust hardware tend to take precedence. However, despite occasionally being sidelined, establishing a solid digital foundation is crucial for optimizing parcel-handling operations.

CEP companies generally recognize the importance of a healthy digital ecosystem. Nevertheless, transforming operations into a parcel hub is not as straightforward as it might be in other industries. Drawing from our experience as logistics and service partners, we have witnessed first-hand some of the challenges parcel carriers face when it comes to integrating new technologies. 

Firstly, many facilities still use legacy equipment that lacks the capabilities for seamless digital integration. Retrofitting these systems to meet modern standards can be costly and intricate. Such changes to a well-established system can pose significant risks to their operations, especially when time is of the essence.

Furthermore, these older systems often coexist with newer, more advanced technologies supplied by various vendors. This results in a large volume of data being scattered across multiple systems and platforms. This fragmentation impedes data-driven decision-making and, consequently, overall operational efficiency. Additionally, smaller hubs and providers often struggle with limited access to skilled IT personnel, making it challenging to facilitate digital integration on-site.

"The ongoing digital transformation described in the Industry 4.0 concept is undoubtedly making its way to the parcel industry"

So, where to start? Based on our experience with hubs of all sizes, both domestic and international, we’ve identified three core priorities for CEP companies:

Streamline Operational Technology (OT)

As both software and hardware technologies evolve rapidly, CEP companies must prioritize simplifying their equipment and processes. In terms of OT, this entails favouring leaner, more standardized solutions that facilitate installation and maintenance activities. The right OT systems can also bridge the gap between legacy equipment and new digital solutions, helping CEP companies future-proof their sortation facilities and ensure end-to-end process integration. As IT and OT converge and connected machinery becomes more prevalent in the parcel industry, a streamlined control architecture with built-in diagnostic, troubleshooting, and system health monitoring capabilities is poised to become the norm for optimal efficiency.

Transform siloed data into a digital ecosystem

Once the right OT systems are in place, parcel operators still need to collect and normalise equipment and process data. Connectivity solutions, sensors, APIs, and other solutions, now all well-known in the digital world, can be used to facilitate this process. CEP companies do, however, require particularly robust and secure data management systems given the sheer volume of data generated within sortation facilities and the sensitive nature of some of this data.

Leverage data 

A fully integrated dataset across the parcel sortation network and the operator's network can be a potent tool. The right data not only provides a better understanding of the sorting process and its performance but also enables the prediction of various scenarios and the prescription of the best course of action.

Looking ahead, we anticipate that parcel-handling operations will become increasingly automated, sustainable, and efficient through the continued evolution of digital technologies. The ongoing digital transformation described in the Industry 4.0 concept is undoubtedly making its way to the parcel industry. CEP companies must develop a sound digital strategy to future-proof their operations and remain competitive in this evolving landscape.