A pesky little virus coming out of nowhere to lock people in their homes and keep them away from work for almost two years is the kind of far-fetched scenario which was once restricted to on-screen sci-fi horror till Covid-19 made it terrifyingly real. The ongoing pandemic has brought plenty of problems for people across the globe, but it has also triggered a digital revolution.
Digitization in logistics is based on six characteristics: cooperation, connectivity, adaptiveness, integration, autonomous control, and cognitive improvement. A logistics network designed with these six characteristics in mind, and the application of industry 4.0 technologies like cloud, mobile, blockchain, data analytics, and sensors, leads to increased vertical integration from supplier to customer, and horizontal integration among competitors and business partners.
During coronavirus-triggered lockdowns, demand for India’s online grocery-shopping portals shot up to 80% even as their operational capacity fell by half. While automation allowed many businesses to carry on virtually, moving operations from offline to online, they had to rely on transport companies for last-mile deliveries. And even though truck drivers made frequent and long-haul trips to ferry essential commodities, bringing stores to our doorstep, the crisis underlined the need for a digital shift in this largely unstructured sector to manage operations on a larger scale and reduce cost overruns.
Data analytics streamlines operations
Here’s where data analytics comes into play. Gathering and analyzing all kinds of data, from GPS and weather details to fleet information and delivery schedules, the most optimum route in terms of time and cost effectiveness can be charted.
AI (Artificial Intelligence) then enables suppliers and transporters to continuously monitor drivers, vehicles and their cargo. It’s like putting a tracker on a container. If anything goes wrong along the route, the Electronic Data Interchange (EDI) software solutions flag it off immediately and the logistics partners can try and fix it asap.
In case of traffic congestion, drivers are quickly alerted and advised to take a detour. If it’s a bridge collapse, they may need to reroute. This not only cuts down on delays but also prevents damage to vehicles and the goods carried. An alert fleet manager can even reduce road accidents which have been the cause of several deaths among truck drivers.
End-to-end visibility along the supply chain reinforces reliability and builds trust amongst customers. Real-time status updates help them live-track even a single or the smallest of purchases from the time it leaves the warehouse/shop till it arrives at its destination.
Paperless technology saves fuel, costs, and trees
Talking of warehouse agreements, with almost everyone working from home during the pandemic and increased demand on supply chains, paperless location-based technology has become the new normal. For transporters digitizing paperwork means swifter border clearances, FasTags for toll payment, online reminders for licenses, PUC and vehicle insurance. Electronic logs also help drivers plan their schedules better by consolidating shipments.
For suppliers, digitizing paperwork reduces the risk of human error while for customers, it increases end-to-end transparency.
In today’s world sustainability is no longer a bonus, it’s a necessity. And paperless transactions can save not just fuel and operational costs, but also trees from being cut down. That’s important because along with economic efficiency, environmental responsibility is also one of the ‘E’ pillars of sustainability.
National Master Plan
The government’s efforts are seen to be now going in one direction to ensure coordinated and collaborative efforts. On one side while there are constant efforts in increasing digitalization and on the other side there is a thrust on improving the infrastructure. Understanding that Artificial Intelligence (AI), automation and machine learning can improve productivity and result in better utilization of resources, the ‘PM Gati Shakti—National Master Plan’ was launched in 2021 by Narendra Modi. It brings together 16 ministries and their concerned departments on a centralized Geographic Information System (GIS) digital platform.
They can now visualize, review and monitor the progress of cross-sectoral projects comprehensively. This helps them prioritize projects, plan them better and select the most optimum route for transportation.
Integrated planning and coordinated implementation will give both gati (speed) and shakti (power or strength) to the infrastructural connectivity projects for industrial clusters and economic zones.
According to the World Economic Forum, digitalization in logistics can unlock $1.5 trillion of value for logistics players, and a further $2.4 trillion worth of societal benefits between 2016 and 2025, primarily from three initiatives: crowdsourcing, digitally enhanced cross-border platforms, and shared warehouse agreements.
‘Green Logistics’ and environmental responsibility
The UN World Commission on Environment and Development defines sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
The Earth Charter in 2000 broadened the definition to include the idea of a global society “founded on respect for nature, universal human rights, economic justice, and a culture of peace”.
With transport responsible for 21% of global emissions, with 73% coming from short journeys, there is a growing trend towards ‘Green Logistics’.
A Doodle Pulse Survey has revealed that 50% of consumers today, with 60% in the age group of 18-24 years, are demanding environmentally friendly fulfillment options. That is why retail giant Amazon is no longer only focused on faster same-day delivery. ‘Amazon Day Delivery’ allows Prime members to place orders throughout the week, then choose one day for free delivery of all purchases. This is not just convenient for customers, but while reducing repeated and wasted trips to a particular location throughout the week, reduces carbon footprints.
An independent study conducted by the Council on Energy, Environment and Water (CEEW) has predicted that India’s Electric Vehicles (EVs) market could be worth US$206 bn by 2030.
Along with electric cars, trucks, two-wheelers and three-wheelers, the transition from oil and natural gas to 100% renewable diesel can also bring about cleaner logistics and is a step in the right direction.