Introduction
As the world progressed, so did the e-commerce industry, and with the increase in the e-commerce industry, the demand for logistics also increased.
With the logistics industry becoming bigger, it faced the challenge of tracking huge amounts of packages and controlling its inventory to avoid both stockouts and overstocking.
To make the logistics process more efficient and easy, especially the activities involving package tracking and inventory control, it is important to introduce generative AI and machine learning into the logistics processes.
Therefore, to keep up with the advanced technology, organizations started using OCR in logistics, which helped them streamline logistics with OCR.
In this blog, we understand how OCR works in logistics, including how it helps in real-time package tracking and achieving efficient inventory control with OCR.
OCR in Logistics
To understand how OCR is helpful in changing the industry of logistics, it is important to understand the basic concept of OCR and why OCR in logistics is important.
What is OCR?
Optical character recognition, or OCR, is an AI technology that helps in the conversion of PDFs, images, and scanned documents into machine-readable data. Such data is both editable and searchable by the user of the organization.
In the field of logistics, OCR technology is used to help in package tracking automation and inventory control. This is done as the OCR technology scans and reads labels, barcodes, invoices, and other documents that help in the transportation and handling of goods of the organization.
With the help of OCR, organizations are able to save the valuable time of their human resources as well as reduce the likelihood of human errors, leading to better efficiency and accuracy.
Why is OCR in Logistics Important?
OCR in logistics is important because it makes sure that the data regarding the logistics of an organization, like the shipping details, delivery addresses, and product information, are captured, extracted, and processed in a quick and correct manner.
Every day, across the world, hundreds of thousands of packages are being dispatched to be delivered to the customer’s address using the services of the logistics company.
Now imagine a scenario where all the delivery addresses or product information are incorrectly mentioned on the shipping label. This would lead to worldwide chaos and dissatisfaction amongst customers, leading to the downfall of the e-commerce industry.
The likelihood of such errors is high in cases when the data entry is being done manually. The result of such errors often leads to delays, misplaced packages, and dissatisfied customers that negatively affect the business of the organization.
Therefore, by automating the process of data entry, organizations can eliminate such errors by accurately recording and processing documents, leading to faster and more efficient workflows.
Package Tracking with OCR
With the help of OCR in logistics, organizations are able to improve the tracking of their packages, resulting in real-time updates and better responses to customer queries.
Automating Package Identification
For organizations to have accurate and efficient package tracking, it is important that the package to be tracked is identified properly without any errors throughout the logistics network.
With the help of OCR in logistics, the task of identifying packages becomes easier as it helps to automate the process by using its ability to read and process important information, like shipping details and tracking numbers, directly from the shipping labels.
Before the introduction of OCR in logistics, this task was done by the human resources of the organization, who used to manually put up tracking numbers in order to identify the package. This often led to slower tracking and increased errors, leading to a lack of information for the organization to give to the customer in case they asked.
With the help of generative AI and OCR, the packages are automatically identified as and when they pass through the various checkpoints of the logistics network, which reduces the need for human intervention or oversight while improving accuracy.
Real-Time Updates and Tracking
A customer is always very excited to receive the package they have ordered and therefore wants to know where their package is at all times, which leads to their tracking the package every few minutes or hours.
With the help of OCR technology in logistics, the customer can get real-time updates about their package at every stage of the supply chain. This keeps the customer informed about the details of their package from dispatch, in transit, to out for delivery. The updates provided by the logistics companies to the customer by using OCR in logistics are accurate and result in timely updates being provided to the customers.
With the help of real-time tracking, organizations are able to improve transparency and help customers in planning for the arrival of their packages. For example, if the customer is not available on the date of delivery, they can request their neighbours in advance to receive the package on their behalf.
Inventory Control with OCR
Inventory control and inventory management are very important for every organization as they help the organizations reduce the likelihood of stockouts or overstocking.
Automating Inventory Data Entry
Data entry is considered to be the most time-consuming and repetitive task in every industry and often leads to taking up the majority of the time of human resources. As a result, they are unable to focus on high-value and strategic tasks of the organization.
By implementing OCR in logistics, organizations are able to automate the process of data entry by automatically reading product labels and updating the records of inventory.
As a result, the organizations are able to keep their inventory records updated in real-time without having to manually update them on a regular basis.
Improving Inventory Accuracy
If an organization does not keep its inventory records updated or if its inventory records are not correct and accurate, it can lead to increased instances of stockouts or overstocking.
Stockout is the scenario where a product becomes out of stock, and a customer is unable to buy it. It often happens when the demand for the product is high, and the organization is not aware of the quantity present with them, leading to a delay in restocking the product.
Overstocking is a scenario where even though the demand for the product is not high, it is being re-ordered time and again, leading to an excess quantity of the product in the organization, which often leads to increased costs and losses.
By using OCR in logistics, the organizations are able to improve the accuracy of their inventory and achieve efficient and effective inventory control as every inventory item that leaves, or enters the warehouse is scanned and recorded correctly in the database of the organization.
As a result, logistic companies are able to maintain accurate inventory levels and make sure that the physical inventory completely matches the recorded inventory levels.
Conclusion
OCR in logistics has completely changed the logistics industry for the better by helping in tracking packages efficiently and improving inventory control for organizations.
By implementing OCR in their operations, the companies working in the logistics industry are able to reduce their costs and improve their accuracy and operational efficiency.
As a result, the companies are able to effectively meet the growing demand of the e-commerce industry, leading to increased business sales and growth due to improved customer satisfaction.
We at CrossML help organizations working in the logistics industry to improve their efficiency, inventory management, package tracking, and productivity. This helps the organization to increase its sales and overall customer satisfaction, leading to a competitive advantage in the market.
FAQs
OCR helps to improve package tracking in logistics by automating the process of extraction of tracking numbers and shipping details from the shipping labels, providing customers and the organization with real-time tracking updates, and reducing manual data entry errors. This helps to quicken the process, and make sure that the package identification and routing are correct.
The challenges of using OCR for inventory control include the difficulty faced in reading labels that are damaged or are of low-quality, the challenges faced in integrating the OCR systems with existing systems and workflows of the organization, and the need to have high quality and high cost hardware for its implementation in the organization.
Yes, the OCR technology can be integrated with existing systems, like Warehouse Management Systems (WMS) or Enterprise Resource Planning (ERP) software. This helps to automate the processes of inventory control and package tracking as well as provide real-time data sharing capabilities to the organization.
The industries that benefit the most from OCR in logistics include the e-commerce industry, retail industry, manufacturing industry, and the transportation industry.
