Integrating technology in logistics and supply chain has increased job hiring and efficiency

Logistics companies are extensively using big data analytics and IoT to gather and analyse data from various sources.

Consumer durable, electronics, global supply chain, supply chain disruption, China, China curbs, china covid curbs
The introduction of NLP (National Logistics Policy) is going to streamline all the logistics activities across countries, bringing down the current logistics cost as a percentage of GDP from 14% to 8%. (File photo: Reuters)

By Nayan Ratandhayara

India is ranked as the 7th largest global market, with a value of over $250 billion in FY 2021, for the logistics industry by World Bank. It is estimated that this industry would reach 380 billion dollars in 2025, with a growth trajectory of 10 to 12 percent CAGR .

Technology has had a significant impact in every industry, creating various job roles and radically changing the working function for numerous existing roles, and logistics as an industry is no exception to that. Indian logistics and supply chain industry has historically been unorganized. Manual intervention has been ingrained into our working style. This results in lesser efficiency and higher costs as compared to international standards. Compared to the BRICS average of 11 percent, India’s logistics cost as a percentage of GDP is higher at 14 percent. 

However, this is changing rapidly. Technology investments have given out huge ROI – Creating efficiency, reliability, transparency, and speed in the movement of goods from point A to point B, some daily examples include:

  • A long-used system of Delivery Run Sheet (DRS), maintained by delivery executives has been replaced with handheld scanner devices. This has made the process of monitoring goods delivered or picked up simple, keeping records easy, error-free, and way more efficient. 
  • Advanced GPS and wireless communication technologies have made it possible for logistics companies to track and monitor fleets and individual shipments in real-time, which allows them to respond more quickly to issues and improve customer service.

Logistics companies are extensively using big data analytics and IoT to gather and analyze data from various sources like real-time traffic, weather sensors to social media conversations to improve decision-making, optimize routes, and predict demand. With software like OMS (Order Management System) and WMS (Warehouse Management System) coming into the picture, the management, storage, and flow of goods have been automated and optimized, eliminating the traditional ways of data entry and recording- hence, making logistics human error-free, efficient and fast. 

Also read: Building the next-gen supply chain with blockchain technology

Several traditional roles that can easily be automated will lose their relevance, and their demand will keep going down. The sooner we accept this and embrace the changes, the better.

Growing market and its opportunities

Dark stores, cloud kitchens, hyperlocal deliveries, and quick commerce are words we hear a lot lately. When we evaluate them carefully, they are all result of highly optimized logistics management systems. These concepts caught up even faster due to the pandemic. 

These businesses have generated revenue for numerous related businesses, such as the two-wheeler vehicle industry. Also, ancillary jobs across support functions like back office and operations teams, marketing, technical support teams, finance, accounts, etc. This is in addition to thousands of delivery executives. 

According to the consulting firm RedSeer, the Indian market of quick commerce is set to reach $5.5 billion by 2025, growing 15 times its current size and surpassing other markets, including China. 

Tech-led start-ups in India have grown by 53% in the past decade, which comes to 12% of the entire startup ecosystem today. With 500 companies providing the patented solution, India’s tech ecosystem is coming to par with major developed economies like US, China, and Europe, accelerating India to become a global tech powerhouse. 

Current scenario and way ahead

The Indian IT industry is inching toward recovery. The “positive hiring sentiment” is reflected by IT body Nasscom in its recent report published in December 2022, which shows the Indian tech industry is hiring around 3,80,000 freshers by the end of this fiscal.

Roles in Artificial Intelligence (AI), Machine Learning (ML), Automation, Cybersecurity, Cloud Computing, Blockchain, and DevOps, are functions that are in huge demand, and this will only increase in the coming days. The reason for many big tech companies downsizing is not because technology has taken over jobs, instead, it is due to poor planning during hiring. Over-hiring due to demand from cyclical projects, and also inertia regarding upskilling the existing workforce. Several leading companies like Adobe, Amazon India, Bosch, Infosys, HCL Technologies, etc. are a few companies that are hiring for a variety of roles from developers to mainframe engineers. 

Also read: Explained: How digitisation is uncomplicating logistics for MSME exporters

Today social commerce is on a huge upsurge. Around 500 million Gen Z consumers in India spend over 10 hours a day online, consuming short-form content or engaging on popular social media platforms. Purchasing through social media is not just the new normal, it is the only normal for many youngsters. India’s social commerce industry is expected to grow at a 62.4% CAGR from 2022 to 2028. It is projected to increase from $8.3 billion in 2022 to $143.6 billion by 2028.

The introduction of NLP (National Logistics Policy) is going to streamline all the logistics activities across countries, bringing down the current logistics cost as a percentage of GDP from 14% to 8%. A consistent focus on building demand technology-led skills will ensure the future generation is ready to meet the demands of a growing India.

(The author is co-founder and CEO, Shipyaari. Views expressed are personal and not necessarily that of

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First published on: 21-03-2023 at 12:31 IST