Just for that brief period immediately following the pandemic; when logistic industry found itself not only overwhelmed by the disruptions but was left wide eyed at the rapid adoption of technologies by enterprises all around; the movers have taken to brisk reassessment of their business eco-system and are scouting and acquiring transformational technologies like never before.
It had to.
With Supply Chain and Logisitics (SCM) looking at a spend of about 14% of GDP on the industry, it is only natural it wouldn’t like to be caught bringing the tail of the country’s transformation stride.
Lalit Das, Founder and CEO, 3SC Solutions, puts it succinctly when he says, “The dangers of being very slow and cumbersome in a fast-paced and ever-evolving world has been recognised because business as usual is no more an option.”
Heads of supply chain and operations across industry verticals are grabbing the opportunity to re-write the way they source and distribute products to meet what one PWC report flagged as disruptive customer demand of faster, flexible and extremely low-cost deliveries of goods. A hard self-critical look at the industry and its challenges, quick realisation among the people-who-matter of the need for collaborative efforts and eager adoption of technologies to meet the challenges are framing the way forward for the logistic enterprises in their business continuity plan.
Technologies – building efficiency
Seized of this reality of the extremely demanding customers, there is a clear emergence of acceptance among industry leaders that this demand cannot be met without building operational excellence. Operational excellence, in turn calls for accelerating adoption of digital technology to flag off inefficiency in the supply chain. Further, to build this operational competence in a cost-effective way, collaboration is one of the buzz word going around in the industry. But collaboration across enterprises is not possible without enterprises establishing a digital core to communicate between them. Digital readiness in terms of automation and data analytics is therefore inevitable for building supply chain efficiency.
Mr. Sumit Sharma, Co-Founder, GoBOLT, says, “Enabling the swift and efficient distribution of goods and services, logistics is considered to be the backbone of the economy. Hence, it is important that the supply chain has to be robust, well -nit and enabled enough so as to ensure smooth distribution.” Sharma discerns a clear recognition of this in the industry and says “tech adoption has been happening gradually both on the vendor as well as the customer sides.”
“This trend will enable the segment to reduce operations’ inefficiencies, enhance its functioning as well as streamline the entire supply chain process.” GoBOLT a tech-enabled start-up working in the industry with ambition of transforming the entire logistic sector, would know.
Numerous examples are cited by industry experts to establish the inevitability of accepting digitisation in the dynamically developing industry. It just can’t be carried the old way. For example, in Retail with their network of thousands of store, just an error of 1% due to human mistake or wrong entry of data could result in losses worth of several million dollars. It only makes sense to go for an automated BOT driven approach that will do analysis using data much faster and with a much higher accuracy.
Such data driven solutions are available in the market that enables more effective management of supply chain. Zvolv, one of the provider of such solutions, is said to help its customers make automation all pervasive across their enterprises and tears down barriers to adoption with enormous speed and agility.
“Eliminating the instinct-based decision making at a distributor level is the need of the hour. Data driven decision making for planning your production as well as distribution of resources can help optimize supply chain and ware housing capacity,” says Hardik Gandhi, Founder-CEO, Zvolv.
Transformation – halts and spurts
Even as the industry is seen eagerly embracing technologies now, it cannot be denied that it lost the early initiative and continues to be dogged by laggards in some quarters. Many companies were seen struggling to seize the opportunity even when they strived hard to. “Coping with change is tough. Adopting to the ever-evolving environment is even tougher,” says Sharma.
This resulted in spurts and curbs and break-offs. “Advances in supply chain technologies trailed off following an intial phase of innovation,” observes 3SC Founder Das, who blames poor management choices for the gaps between prospective gains and real gains from supply-chain digitisation. “The most common error that happens is overlooking operational changes which would let a company leverage digital technologies to their fullest extent.”
Ishan Singh Bedi, CEO – Synchronized Supply Systems Ltd., a leading third-party logistics service provider has a different take on the subject. “Many companies have adopted western technologies but these technologies are not made for Indian infrastructure. Our industry does not have five large problems to solve with technology. Its consisting of a million small problems, and the industry has no way forward but to solve each one of them individually,” says Bedi who appears to be giving of an ear-to-the-ground perspective.
Irrespective of the varying viewpoints as to the exact level and pace of technology adoption and even while being cognizant of the challenges ahead, there is a marked shift towards broad acceptace of technology as a major transformational element in the industry.
“On the whole, we believe that digital transformation will contribute majorly in ensuring the extension of improved customer experiences as well as in driving the growth of the Indian logistics market in the years to come. Cutting-edge tech solutions will indeed revamp the overall supply chain process and logistics sector on the whole in the times ahead,” says the GoBOLT founder with 10,500 trucks at his beck-and-call spread in over a 100 cities.
Collaboration – the new mantra
Last-mile delivery has always been the biggest challenge before the supply chain industry. It also happens now to be the trend-setter in technology adoption that is bringing about a disruptive transformation of the industry.
The kind of technology platform adopted by some of the players, particularly in the e-commerce, that gives nearly real-time visibility of products, has been an eye-opener to the immense possibilities of transformation in the logistics eco-system. At the same time, new entrants nibbling away at the more lucrative elements of the value chain are making the complacents to sit up to the challenge.
Uber-style last mile deliveries and corporate joint ventures are bringing about a collaborative approach not seen before.
An industry stalwart points to the business model like that of Mahindra Logistics; which is a 4PL partner giving their technology platform to small players; and is able to draw large business from multiple partners without owning the fleet but just by leveraging the eco-system.
“The corporate partnerships and their collaborative approach have increased a positive approach to our industry. The industry has boomed. There has been a big change in the thought process in our industry. Now the mutual partnership has become easy, and mutual trust has increased among the people,” says Bedi, who has seen it all through his exciting journey starting with one truck and three employees to a Rs. 98 crore company with 200 trucks and 700 employees.
This realisation of the positive impact of collaboration is all pervasive. At the same time, this gets tempered by the realisation of industry-wide inconsistencies and lack of standardisation. A large part of the existing supply chain use systems that work in a linear way and cannot communicate with one another. Das shares a research figure from Accenture that states 80% of the supply chain data required to make decisions exist outside the organisations leaving just 20% in the control of enterprises.
Logistics in India is a fragmented sector. A very large number of players vie with each other for providing myriad service to a plethora of needs. “Since there is an absence of consolidation of big players, the sector faces inefficiencies and gaps with respect to the operations and skillset,” says Sharma whose GoBOLT is in the business of leveraging state of the art technology to provide integrated services for customers focussing on express services.
It is being felt that fragmented small players with gaps in skill sets and incommunicado with each other is a drag on the efforts towards collaboration. “To overcome this and make quick and better decisions, companies necessarily need to be visible across different partners. Instead of linear processes, companies need more of networks. And by digitizing the supply chain, it can become possible to integrate the existing systems and obtain full overview needed to be ahead of the game,” says the supply-chain tech company
Prospects – being resilient
Once bitten, twice shy. This time around, supply-chain isn’t getting caught off-guard. Companies are preparing for contigency plans and working on default responses in the event of any disruption. Clearly defined responsibilities assigned to specific personnel are being worked out. Keeping warehouses up and running is among the top elements of the Business Continuity Plan (BCP).
Being resilient is the key word.
Solution providers like 3SC are recommending performance of risk assessment within the company’s warehouses; identification of business-critical procedures, processes, technologies and personnel; and having an omnichannel approach to consumer-connect. As most of the data lives in the cloud, establishing a proper redundancy plan in both cloud-based storage and data centres is among the other suggested drives towards building resilience.
GoBOLT, additionally, would want enterprises to have a robust strategy for expansion and diversification in their supply-chain base while closely networking with existing suppliers. Immediate resolution of existing operational inefficiency, meticulous analysis and planning of all inbound and outbound routes along with last-mile deliveries, pre-emptives against technical glitches and upgradation of technical tools are among the critical components of any BCP that it would suggest.
Amidst all these talks around business plans and technology adoption, the common thread running through all the conversation is the importance ascribed to the human factor in laying out the Business Continuity Plan.
“An effective BCP requires two most important assets, one is employees, and the second is technology,” says Bedi. “Communicating the entire plan and sharing it with the teams, right from the managerial levels to the warehousing staff is important,” emphasises Sharma. “Once the plan is in place, communicate it at all levels of the business,” says Das and adds, “Keeping the safety of the employees, warehouse staff, and contract workers have to be at the forefront while preparing contingency plans for warehouses.”
Pursuit – reaching wide
While the industry grapples with the challenges ahead and chalks out its future course, Veerendra Jamdade, CEO, Vritti Solutions Ltd; wants some spotlight to be focused on authorities and industry bodies too.
“Industry bodies like Industry Chambers shall take a lead role in establishing this. In a manner similar to what they have done for TPM, Quality Circle, they should work on bringing understanding and best practices of digital technology,” he says. “Industry should bring standardization on document exchange, shareable material identification database to avoid printing Bar/QR code when material changes hands,” he adds.
Reaching there
With the advent of Industry 4.0, supply chain and logistics is undergoing radical changes. As per Expert Market Research’s report, the global logistics market is expected to hit the $6,656.3 billion mark by 2026. Within the leading market of the Asia Pacific region, it is India that is expected to emerge as the fastest-growing logistics tech market. Apparently, those times are not far when technology will be an indispensable part of the logistics market.
As Sharma puts it conclusively, “These new-age tech solutions combined with the surge in e-commerce adoption will collaboratively boost the growth of the sector in the times to come.”