6 Benefits of Document Processing in the Logistics and Supply Chain Industry

Posted by:
Jay Madheswaran
October 14, 2022


The supply chain and logistics industry is aggressively expanding. A Research and Markets report forecasts the global logistics market will grow at a CAGR of 5.7% by 2027. It predicts the market will reach USD 13,326.3 billion by 2027 from USD 9,525.1 billion in 2021. 

The expansion of the industry is driven by the rise of e-commerce, globalization, and changing consumer buying behavior. As the industry grows, the amount of documentation and data involved in each transaction also increases. 

Logistics companies face the challenge of managing the vast amount of data created daily. They rely on efficient data management to maintain their competitive edge. It has led to an increased demand for document processing solutions that can automate and streamline logistics.


Document processing in the supply chain industry is essential to maintain efficient operations and stay competitive. Logistics companies are already switching to electronic signature technology because of its cost-effectiveness. 

They are automating routine tasks that involve documents. They use technology instead of traditional techniques, from scanning to data extraction.

Automated document processing in supply chains and logistics is expanding because it improves the customer experience. It also makes document processing, information sharing, tracking, and data analysis faster. 

Automation of document processing gives logistics companies more control while lowering operating expenses.

This article will look at the various supply chain document processing methods, the need for OCR-based automation, and the benefits of document processing in logistics.

What is Document Processing in the Logistics Industry?

The conversion of handwritten or typed text and images is known as document processing. These documents can be paper-based or electronic. 

During document processing, data from these documents can be transformed into properly arranged electronic information for easy storage and analysis.

Traditionally, document processing is handled by a dedicated team that reviews documents and makes data entries into legacy systems. 

Manual document processing is error-prone and costly too. The large workforce and time required for manual document processing are some of the biggest problems for logistics companies.

Companies are shifting to automated logistics document processing for accurate data capture using Optical Character Recognition (OCR) technology

Legacy OCR methods struggle to handle the complexity of handwritten notes and variable document types. Over time, these OCR tools have become more powerful, but they frequently produce subpar results. Complex documentation may need technical specialists to set up templates for each document.

Intelligent Document Processing (IDP) solutions ensure complete automation of logistics document processing. These offer end-to-end automation powered by recent developments in AI and computer vision. 

It uses AI to scan structured and unstructured documents before assigning them to the appropriate category and format. The AI OCR document processing solutions are user-friendly as well. They offer an intuitive user interface that provides detailed insights. 

Logistics companies using AI-powered OCR document processing tools may import various document types into a business system. As a result, they do not have to perform any human administration tasks traditionally included in the process.

The general procedure followed by AI OCR document processing solutions involves the following steps:

  • Pre-processing: The solution enhances the quality of documents before processing by using methods like De-skewing, Noise Reduction, Binarization, and Cropping.

  • Categorization of data: The documents are categorized by their structure or type based on patterns and contents.

  • Extraction of data: The solution extracts data following user-defined rules using OCR, ICR, and other technologies.

  • Validation of data: The processed data is verified and checked by RPA bots. Unverified data is forwarded to a person for manual processing.

  • Keeping and integrating data: The solution stores validated data, and downstream applications are integrated with it.

Logistics document processing involves a wide variety of documents. Typical documents used in the logistics and supply chain industry are: 

  • Certificate of Origin: A document that certifies the country of origin of goods exported to another country. It is necessary for clearing customs in the destination country.

  • Packing List: It gives information about the contents of the cargo, including weights, quantities, marks, and descriptions.

  • Commercial Invoice: An invoice containing all the specifics of the cargo transaction, including the shipping conditions.

  • Shipper's Letter of Instruction (SLI): A document that provides regulatory confirmation regarding the sale of goods by the country of origin's regulatory bodies. It provides essential information about the shipment, like a description of the goods and any special instructions.

  • Bill of Lading: A legal document that serves as a shipping receipt and contains information about the kind, quantity, and destination of the products.

  • Air Waybill (AWB): Used for air cargo when it is shipped internationally by air courier. It contains comprehensive information about the shipment, the shipper, the consignee, and other relevant details essential for tracking it.

  • Sea Waybill (SWB): A maritime version of an AWB that is used for shipments by ocean carriers. It also has detailed information about the shipment, shipper, consignee, and other tracking data.

  • Certificate of Free Sale: It certifies that a product can be sold in the country of export. It is required for some types of food and beverage products.

  • Export License: A document that is required for some types of products before they can be exported. It is obtained from the country's government and typically considers factors such as the product's classification and destination.

  • Dangerous Good Declaration: The document gives essential details about any hazardous materials being shipped in the package. It includes information about the type and quantity of dangerous goods in the shipment.

  • Proof of Delivery (POD): It acts as a confirmation of delivery, and the recipient signs it upon delivery of the shipment. POD includes details such as the date and time of delivery and any special instructions for the delivery.

  • Insurance Certificate: A certificate that outlines the terms of insurance coverage for the shipment. The insurance company issues it and provides complete details of the shipment damage coverage.

In combination with other imaging and business management systems, OCR Tools are being used by 91% of organizations. They are significantly increasing productivity. 

The ROI of an AI OCR logistics document processing tool is well worth the investment, regardless of the kind of documents you need to handle. 

Let's look more closely at how supply chain document processing using AI-powered OCR tools will benefit your company.

6 Benefits of Document Processing in the Supply Chain and Logistics Industry

Document processing plays a pivotal role in the success of a logistics or supply chain company. 

It streamlines operations while increasing customer satisfaction through greater transparency. Besides reducing operational costs, it also ensures regulatory compliance as per industry norms.

OCR can drive value for your logistics company by enabling quicker and more accurate document processing. 

Improve your bottom line by reducing processing time and labor costs. In addition, OCR eliminates the chances of human error in document data entry and reduces storage costs while making it easier to track documents.

The benefits of OCR technology-driven document processing in supply chain and logistics businesses are:

  1. Reduce Data Entry Costs 

The logistics industry involves tons of documentation. Printing, storage, reproduction, mailing, and data retrieval from unstructured or semi-structured documents dramatically increase data entry costs. OCR-based document processing helps you reduce expenses by automating data entry.

A research report by Billentis on e-invoicing mentions that automated e-invoicing brings down costs by 60-80% compared to conventional paper-based processing.

Additionally, manual document management can result in losses through human errors such as misreading, wrongly noted details, duplication, and missing information. 

Minimizing human interaction reduces errors and facilitates better utilization of resources.

  1. Enhance Data Accuracy 

Manual data entering leads to mistakes like typos, duplicate data, and unit inconsistencies during data extraction. It leads to many disruptions and delays further down the supply chain.

OCR supply chain document processing begins with sorting and labeling the data extracted from contracts, packing slips, and customs documents. It ensures data accuracy and consistency, making it simple to guarantee regulatory compliance and contract control.

Using AI, the OCR tools convert data into high-quality, structured data ready for analysis and deriving business value. 

A benchmarking report by AIMultiple demonstrates an overall OCR Text Accuracy of around 90%.

  1. Improve Speed and Productivity: 

OCR-based automation technology speeds up supply chain document processing. 

For instance, DHL Supply Chain reported increased productivity by implementing IDP to automate invoice processing.

  1. Manage Fleet Better: 

One of the challenges most logistics managers encounter is maintaining and using their fleets optimally. OCR technology makes document processing more manageable and more accurate. 

The technology allows one to monitor each vehicle’s health and keep track of its location. As a result, it helps reduce fuel consumption, prevent late deliveries, and eliminate inefficiencies.

  1. Improved Customer Service: 

Enabling self-service for tracking consignments and expediting the resolution of logistics issues enhances the customer experience.

Paper-based document processing does not offer enough transparency. 

Automating data capture using OCR tools helps digitize information, while AI helps to derive actionable insights from it.

Providing real-time information boosts customer trust and adds confidence in long-term relationships.

  1. Encourages Strategic Planning: 

The inability to see and understand the shift in market demands and customer preferences is a challenge for logistics companies. 

Using data analytics, supply chain companies can forecast demand and plan their operations to meet fluctuations. 

OCR-powered logistics data processing ensures document availability for meeting regulatory requirements. In addition, it saves the logistics company from penalties due to missing or delayed documentation.

Final Thoughts

Documents related to the supply chain industry should be carefully organized and handled. They offer accountability, transparency, and crucial information about the stages involved in supply chain management.

OCR document processing tools ensure supply chain papers are appropriately handled. You can update them frequently, make them simply accessible for critical stakeholders, and establish a culture of transparency.

Avail the benefits of document processing in the logistics and supply chain industry with an industry-leading OCR tool from Butler Labs. Test the tool for free today.

Build document extraction into your product or workflow today!