What role technologies such as IoT, AI Play in the logistics sector?
Logistics industry has always been quite human resource intensive industry requiring manpower for handling most of the operations; but with the advent of AI the tasks have started shifting to machines now. AI, with the help of its two workhorses Augmentation and Automation, has started re-shaping this industry.
Augmented reality (AR) is being used efficiently in warehouses for various operations, AR enables to locate products easily and pack them. AR enabled cameras can easily scan a product for damage, check its weight and adhere to package shipping instructions. And when we talk about automation it’s not just about automating some processes; the possibility is to create a system that would be in an ever listening mode to automatically execute the entire end-to-end operations with just one raise of a finger.
IoT is one of the first high-end technologies adopted by the logistics and supply chain management. With IoT logistics, tracking and tracing goods became faster, more accurate, predictive and secure; while analytics from a connected fleet can predict asset failure and schedule maintenance checks automatically. Today, trucks are becoming a mobile convergence in the Internet of Things. There is a two ways, connection between the driver and the dispatcher that reduces the costs and delivers greater visibility to the trucking companies.
Blockchain technology has definitely found its way into the logistics industry, solving a lot of issues around administrative efficiency and order tracking, in a way that it is being seen as a promising game changer for logistics and SCM. Although the decentralised digital ledger may be mainly commonly associated with crypto-currency, but its applications look very aptly fitting in the logistics.
What advantages these technologies bring?
These technologies play a significant role to save time, reduce costs and increase productivity and accuracy with cognitive automation. AI affects warehousing operations such as collecting and analysing information or inventory processing. As a result, AI helps in increasing efficiency and getting profit. Artificial intelligence is profitable for transportation. Due to IoT and AI, Self-driving vehicles bring changes to the supply chain and help reduce expenses in logistics. The capabilities of AI are seriously ramping up company efficiencies in the areas of predictive demand and network planning. Having a technology for accurate demand forecasting and capacity planning allows companies to be more proactive.
The impact of Big Data is allowing logistics companies to forecast highly accurate outlooks and optimize future performance better than ever before. Providing clean data has become an important step for AI in logistics companies as many simply do not have usable figures to implement. It is very difficult to measure efficiency gains as some companies generate their data from multiple points and multiple people. These data and figures cannot be easily improved at the source, so algorithms are being used to analyse historical data, identify issues and improve data quality to the level where significant transparency on the business is gain
How is the Indian logistics industry faring?
In today’s growing Indian market Indian logistics sector is on a big growth tide. According to the domestic rating agency ICRA, Indian logistics sector is expected to grow at the rate of 8-10%. This is an improvement over the compound annual growth rate (CAGR) of 7.8 per cent at which the industry grew during the last five years.
The logistics industry of India is estimated to be around US$ 160 billion. With the implementation of GST, the sector is expected to benefit and touch US$ 215 billion over the next two years. Even the government of India has established a separate logistics division in the department of commerce to work for the integrated development of the industry both in the domestic and the international domain.
The Ministry of Commerce and Industry (MoCI) has proposed framing of a dedicated online portal to accentuate logistics services in the country and bringing together different buyers, logistics service providers, and the related government agencies. The existing customers and new customers are approaching us to redesign their logistics network in India and set up from a tax point of view, to a proper logistics network because there is one GST. The growth of the Internet, e-commerce is becoming increasingly important across the world.
The business-to-business (B2B) sector of the e-commerce industry in India is set to grow by 2.5 times to touch 45 lakh crore by 2020. This will put pressure on the logistics support. In order to enhance access to e-commerce markets logistics players are strengthening their capacities and networks. Even online retail giants are expanding their logistics reach to cut costs for their business and provide third-party logistics services to other industries.
Which manufacturing sectors are driving the growth of GoBolt?
Sectors such as FMCG, FMCD, Liquor, Furniture, Heavy Machinery, etc. are driving the growth of GoBOLT.
How has been the year 2019 and how do you look at 2020?
The logistics sector in India is changing dramatically over the past few years, but it has gained a major share of attention only in 2019. In 2019 logistics industry evolved due to the improvement in retail, e-commerce, manufacturing and various other sectors. The rise in e-commerce consumption, as well as domestic logistics, added to the improvement in the Indian logistics market 2019. Especially for GoBOLT, the year was very productive and fruitful year. The market was very good for logistics companies. This growth is expected to continue in 2020 and to reach US$ 215 billion.
In this uncertain market conditions, what challenges do you face?
We have an innovative model of engaging with the small freight operators and leveraging the marketplace for transportation. Initially, getting transporters on board was the biggest challenge, as this is a very fragmented market with heavy broker reliance. Also, technology adaptation posed as a big challenge, both on the vendor and customer side, as since inception we wanted to adopt new and cutting edge technology such as Artificial Intelligence, Data Analytics & Machine Learning etc. to gain competitive advantage. We had rolled out the Customer mobile application as well as Transporter/Vendor mobile application. Getting the transporters/drivers to start using technology was a difficult task, but slowly and steadily we have achieved deep technology penetration in the Industry and the benefit of data flow has started to be reaped.