Why automating logistics, supply chain is must for SMEs to cut cost, boost efficiency

Published: October 22, 2019 3:17:00 PM

Logistics for MSMEs: Automation offers the advantage of improving productivity and gaining the competitive edge to SMEs if implemented across different streams and wings.

The supply chain is a complex network with several interconnected parts working together.
  • By R Narayan

Logistics for MSMEs: As warehouses in India enter an era of consolidation, they are integrating advanced technologies such as robotics, artificial intelligence (AI) and machine learning. E-commerce and omnichannel retail demand new solutions that meet consumer expectations as well as deliver economies of scale. The supply chain industry appreciates that one of the critical ways of achieving this is by reducing workforce dependency and making tasks simpler and more efficient.

However, in labour-intensive countries like India, implementing full-scale robotics is not feasible. There will always be tasks that will be cheaper if undertaken by humans. But supply chain and logistics providers are finding ways to integrate robotics, AI and machine learning into the back-end to improve operations and save costs. Reports estimate that the Indian supply chain industry will see its valuation double in the next two years with such implementations.

Automation offers the advantage of improving productivity and gaining the competitive edge to SMEs if implemented across different streams and wings. The global consumer wants better service and seamless experiences. Catering to this demand and market volatilities is motivating supply chains to employ automation and robotics. When coupled with skilled manpower and a clear operational vision, the results can be transformative.

Also read: Freshworks shifting focus to achieve $1 billion revenue target

Modernizing the Traditional Supply Chain

The supply chain is a complex network with several interconnected parts working together. Minor errors can lead to significant rises in costs. The visibility and insights offered by AI, machine learning and predictive analytics can thus improve business decisions considerably. These are providing supply chain players with agility, effectiveness and precision on an end-to-end basis.

Some of the best implementations of such solutions in the supply chain include:

  • Business intelligence, which is transforming warehouse management through real-time tracking of operations and shipping. The process comprises robotic sorting, AI-powered inspections, packaging and more.
  • Automation of labour-intensive activities such as self-managing inventory systems, self-driving forklifts, autonomous ground vehicles and other tasks that reduce manual dependency.
  • Forecasting through software solutions that aid in supplier selection, audits and evaluations, safety protocols, fraud detection, preventive maintenance and employee training.

Components of supply chain and logistics such as third-party logistics, trucking, packaging and e-commerce order fulfilment are deriving clear benefits from AI integrations. Industry funding is reaching these channels, and the collective aim of the industry is to attract similar interest in other supply chain sub-segments as well.

(R Narayan is the Senior Vice President at FICCI-CMSME and Founder & CEO at Power2SME. Views expressed are the author’s own.)

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