Creating Efficiencies in Logistics

In India, which is now the 5th largest economy in the world, things are changing rapidly. The echo of Make in India and India becoming self-reliant is everywhere. Gatishakti and National Logistics Policy together are now taking the country towards a new work culture. From 13-14 percent logistics cost, the aim is to bring it to single digit. Unified Logistics Interface Platform- ULIP will bring all the digital services related with the transportation sector on a single portal.

These initiatives will facilitate the last mile connectivity of infrastructure and aid in creating a robust supply chain and logistics ecosystem thereby making India become more competitive in the global market. And, with improved infrastructure, technological solutions, and efficient processes, India can become a global business leader.Standardizationacross the Supply Chain is essential for reducing costs, improving efficiency, and ensuring global compatibility as well as competitiveness.

Standardization is the key to creating efficiencies in Logistics. Standardizing the Logistics Infrastructure and flow of material across the Supply Chain will help in deriving the benefits from standardization to the industry across multiple sectors.

It is well known that the Supply Chains for Raw Materials, Intermediaries, and Finished Goods differ from product to product and hence the diverse needs for storage and transportation of the same. The standards may vary from Industry Verticals keeping in mind the specific nature of the material and the specialized handling based on the nature of the product and the industry sector-related nuances.

Pallets are key efficiency drivers, used by manufacturers, retailers and service providers,. They impact transport, storage, handling, and packaging, which together, represent 12-15% of retail sales price.The same standard pallet used across the supply chain will bring in efficiencies and lead to reduction in the logistics cost. It will enable efficient handling leading to lesser damages and pilferages. It will enable collaborative logistics enabling a seamless flow within the eco system. The technology enablement will ensure real time visibility and decision making. The ‘Total Cost’ approach will lead to network optimization and reduction of lead times and inventory levels.

The logistics market will be all about Service rather than Freight. Freight will just be a commodity and will be on the digital platform; Services will swing customer preferences. 

In India, the demand for today and the future is Integrated End-to-End Logistics Solutions. This would encompass integrated infrastructure / assets platform, integrated services platform and integrated digital platform. The sector would continue to witness consolidation, process standardization, technological upgradation and digital transformation.

Internet of Things (IoT), Automation technology, Blockchain technology, Cloud Computing, Advanced / Big Data Analysis, Artificial Intelligence (AI) and Robotics will be leveraged to provide end-to-end lean and smart logistics solutions, enhance quality, reduce cost and minimize human intervention. The industry will continue to witness fast paced technology disruptions resulting in real time supply chain visibility.

In India, we have a country within a country scenario and have various complexities related to manufacturing, storage and distribution hence every solution given to the customer has to be customized. The customer needs to identify the Right Partner and not a vendor. Partnerships should be forged with openness and transparency. Progress should be monitored through clearly defined SLA’s and KPI’s. Efficiencies have to be created in the system to lower the “per unit cost” on a continuous basis. IT integration of the systems at both ends lead to maximum benefit and help in have achieving the maximum efficiencies.

We believe it will take a lot from both sides, the service users and service providers to collaborate and establish a world class logistics back bone. In the present situation there is a lack of continuous engagement at the strategical and tactical level between the customer and logistics service providers. Most of the engagement takes place at an operational level which doesn’t enable any major investments on a long term basis and thereby not adding value to the entire Supply Chain. Most of the discussions revolve around commercials and how to lower direct costs. There is a lack of understanding at both the service provider and the service users’ end on building long term efficient solutions. In most cases the service providers are not even aware of the expectations of their immediate customers while for a successful supply chain, service providers need to understand the needs and expectations of their customer’s customer. There is an immediate need to evolve from vendor-based relationships to Partnerships with Logistics Service Providers (LSP) to invest and create efficient solutions by investing into the logistics needs. LSP need to be aware of the expectations and deliverables and commitments that need to be adhered to achieve the goals set by the organization. From our experience we can say that we need to spend more in terms of investments to save more. 

Hence, the entire supply chain is interlinked and to drive maximum benefits, huge need for unitization, standardization andintelligent use of technology backed with engagement at strategic levels will lead to an ideal cost and service scenario. Reduction of human touch points will lead to more Efficient and Compliant Supply Chain.