Due to the overwhelming growth of the ecommerce sector and the market, there has been a twist in the logistics and supply chain processes.
By Dr. Ambrish Kumar,
This is the era of technological advancement and digital transformation. Every enterprise, sector and industry are optimising the processes and workflows with the help of technology and progressive automation. This does not mean that it takes away the workforce or reduces employment opportunities, but it turns the table in terms of efficiency of work and brings in cost-effectiveness.
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The logistics and supply chain sector has not accelerated enough in terms of digital transformation over the years as much as other industries. However, we have seen gradual technology transformations since the past 3-4 years. Due to the overwhelming growth of the ecommerce sector and the market, there has been a twist in the logistics and supply chain processes. Also the consumer expectation has grown sky high with the logistics convenience that ecommerce has brought about with the help of technology and automation. The traditional logistics sector is still poised with the orthodox working models, they are finding it hard to meet the benchmarks set by the e-commerce players to cater to the fast-paced demands of the end consumers. In view of this, many technology-based start-ups and IT companies have capitalised on the situation and implemented automation solutions for the pain areas like first and last mile connectivity, warehousing, express pick-ups and deliveries, online freight booking platforms for air and ocean freight, etc.
Indian Government is also keenly implementing several measures with technology as the bottom-line. Also there have been several economic reforms and infrastructural developments to complement the automation so that there is a seamless supply chain in the future to consecutively bring down the logistics costs. This will make India a ripe hub for global investments for manufacturing, warehousing, and other supply chain requisites. We can see rigorous digitization efforts by the Government for the customs processes for import and export shipments, with faceless, contactless, paperless flagship programmes like ‘Turant Customs’, e-Sanchit, SWIFT (Single Window Interface for Facilitating Trade and Direct Port Delivery), ICEDASH, ATITHI and so on. These initiatives have been exemplary and most awaited transformations by the Indian Government which has assisted in simplifying and centralising the prolonged processes that were prevalent earlier.
The Government is also planning and also working on developing centralised platforms and single window gateways that integrate the logistics players, exporters, importers with the ports, CFS, cargo terminals, customs, trade bodies, etc so that the whole network of supply chain is accessible and visible from a single window. One such model is the Port Community System (PCS) that will be a central grid for real time tracking container movements, vessel schedules, across the network of most Government owned ports. The integration will be linking the ports, CFS, shipping lines, multi-modal transportation facilities, first and last mile service providers, banks, etc. The National Logistics Policy on which the Government is working has a significant emphasis on bringing in more centralised platforms and single window solutions for easing the supply chain processes and bringing the logistics cost down from the current 14% of GDP.
Another matter of concern is that, while there is automation taking place in the supply chain sector, and there have been investments, acquisitions, mergers over the past few years but digitization is occurring on enterprise or entity level. It is a boon that there have been several start-ups that have come up and excelled in resolving the first and last mile connectivity and some have grown into unicorns. There are others who have come up with technology-based warehousing and storage solutions. There are a few others who are offering online freight booking platforms. However, there is a lack of integration between these players. Hence, still it can be stated that while there is automation taking place, the bigger purpose will be accomplished only when there is technological integration between the various stakeholders of the supply chain.
It is high time that the immense logistics sector and its players start investing largely in machine learning, artificial intelligence, IOT, analytics. There is a huge amount of data generated in the supply chain sector that can be optimized and used for improvement of the lagging processes and leveraging customer experience. The players need to sprint to the advanced data mining processes to rightly make use of the voluminous data that cannot be analysed using the conventional data processing techniques that are currently followed. This will help in predictive analysis assisting the enterprises and organisations to take precise decisions, thereby enhancing operational efficiencies, and reducing risks. AI will help in forecasting customer demands based on product characteristics, mitigating imminent risks, assessing prospective potential markets, rationalizing supply, balancing the demand and supply trends based on real-time inventory data, reducing wastage of supply and resources, improving timelines and schedules, precise anticipation and contemplation of the future possibilities, and improving the supply chain efficiency through optimized reaction and turn-around times. The ultimate aim in the logistics sector has to be the implementation of blockchain technology that will lead to complete transparency and visibility of the whole supply chain ecosystem.
The logistics sector requires more web and mobile applications from where the manufacturers, exporters, importers can sit back at their ease and avail the logistics services in the domestic and global front with reduced interference of the mediators. The largely fragmented and disintegrated logistics sector has made the situation all the more worse during the pandemic when the operation of various stakeholders came to a standstill owing to lockdowns and other quarantine measures as they were not technologically equipped to handle such an uninvited chaotic scenario.
The pandemic has highlighted the need for sheer automation of the logistics and supply chain workflows. It has shown how technology helps in business continuity in such hours of despair. A transparent logistics system and supply chain without loopholes and with sheer visibility is the need of the hour. India can rise further up on the global EoDB index much faster if the logistics sector gets a technological impetus.
(The author is Founder of Zipaworld and Group CEO, AAA 2 Innovate Private Ltd. Views expressed are personal and do not reflect the official position or policy of the Financial Express Online.)