For most logistics companies, everything starts with a spreadsheet. They are easy to use, flexible, and familiar. Spreadsheets are used to capture shipment details, quotations, customer information, vendor charges, invoices, and other operating reports for a growing freight forwarding company.
As the business expands, however, the same spreadsheets can get unwieldy.
A logistics enterprise dealing with numerous clients, deliveries, locations, agents, and financial accounts needs data to move easily between departments. That's why many logistics businesses are increasingly shifting away from the old, disjointed spreadsheet to ERP software.
The Limits of Spreadsheets in a Growing Logistics Business
Spreadsheets are great for data management, but aren't built for running an entire logistics operation.
Let's picture an international logistics company that operates with numerous shipments at the same time. The operations team can put shipping details in one spreadsheet, finance can keep a separate spreadsheet of invoices, and management can set up other reports to see the performance of the entire thing.
This is a common issue – the information might be entered more than once.
The risk of errors is greater as data is duplicated between files. Teams can also waste precious time looking for the latest copy of a document, or checking if it's been updated.
This can be more difficult for freight forwarder companies as their volumes of shipments and business activity rise.
Why an ERP System Can Make a Difference
The whole idea behind ERP is to bring together all the various components of a business under a single platform.
An ERP can help consolidate relevant activities, as opposed to having separate information for operations, customers, vendors, and finance. Shipment information can be integrated, for instance, with customer information, services, costs, invoices, and reports.
That doesn't imply that all spreadsheets must go. For certain analysis, spreadsheets can be helpful. The difference is that vital day to day business data can be handled by a more integrated solution.
Better Visibility Across Logistics Operations
The visibility of ERP software is one of the largest benefits.
For the logistics business, it is important to have various teams that act on correct and up to date information. Operations might require shipment data, finance might require cost and revenue data, management might need a summary of business performance.
ERP solutions enable information to be shared more effectively between these functions.
An ERP does more than just replace spreadsheets—it breaks down silos between departments so everyone works from the same live operational data.
Less Repetitive Work, Better Data Control
When running a logistics company, one of the common problems is manual data entry. Shipment data or customer information can be recorded in several different files, systems, and reports.
By linking business processes, an ERP system can cut down on this repetitive work.
For instance, data input during operation can be used in the related financial and reporting activities. This can help minimize repetition and facilitate traceability of data.
But when the process is well known, technology works best. Simply transferring disorganised data from a spreadsheet to an ERP will not resolve all the issues. Businesses should also consider the way that their teams work.
Why Popular ERP Systems Are Evolving
Many popular ERP systems focus on the core business functions like finance, purchasing, customer info and reporting.
But logistics companies have their specific needs. A freight forwarding company must manage shipments, transportation processes, various service providers, customer needs, operational expenses, and international paperwork.
That's why the most complete list of features doesn't always make the best ERP software for logistics. The best choice is a system that enables real logistics flows and is expandable to the business.
Moving Beyond Spreadsheets
Migrating from spreadsheets to ERP can be a slow process.
When a business begins, they typically begin in the area that is the most difficult for manual labor. With more connected operations, teams can have improved visibility and less time spent reconciling data from multiple sources.
With increasing operational complexities, the transition to ERP can offer a solid foundation for a growing international logistics firm.
It's not about using more software. The goal is simple: give your team the tools to manage shipments accurately, communicate faster, and scale without chaos.
Frequently Asked Questions
1. Why are logistics businesses moving from spreadsheets to ERP software?
Spreadsheets can become cumbersome and hard to manage when used by many people and departments as businesses expand. ERP software aids in integrating operational, monetary, client, and reporting info iin a far more centralized platform.
2. Can a freight forwarding business still use spreadsheets?
Yes. There are still uses for spreadsheets for specific analysis and calculations. As a freight forwarding business grows, however, having to keep track of core day to day operations on numerous different spreadsheets can become difficult.
3. What should freight forwarder companies look for in an ERP system?
Their attention should be focused on finding an ERP solution that aligns with their current processes, such as operations, customer management, vendor management, financial management, reporting, and industry specific needs.
4. Are popular ERP systems suitable for every logistics company?
Not always. Whilst popular ERP systems will offer a solid business solution, logistics companies can also ask themselves whether the system is capable of meeting the requirements of freight forwarding and logistics businesses.
5. What is the best ERP software for a logistics business?
The ideal ERP software would depend on the size of the company, the nature of the services provided, the workflows, integration requirements, and a company's plans. The system should be chosen not just because it's popular, but because it suits the practical needs of the business.