Technology in (e-tail) Logistics
Industry in India is going through a tectonic shift driven by the changing economic environment and aspirations, compliance and regulations, infrastructure and technology. This change is more evident in the category of small and large parcel logistics due to the boom in ecommerce.
The e-tailing sector is predicted to grow at 52 percent CAGR to reach USD 37 Billion by 2020. Logistics will be the key driver of this growth helping the industry to scale and reach every pincode across India; cost efficiently without compromising on customer deliverables.
Technology will play the vital role in this journey. The long term technology vision is on track, being piloted by some of the major innovators like Amazon and Google in the US. These span across robotics in warehousing like Kiva Systems, drone deliveries, Internet of Things and block-chains, Augmented Reality systems for pick & pack, driverless cars/trucks, etc.
The immediate, that is the short to medium term disruptions in Technology are already happening with service providers trying to scale up the implementation rapidly. Some of the major technology changes can be broadly classified as below:-
Predictive Analytics: E-tail logistics and ecommerce as a whole are areas of immense potential for experts in Business Intelligence & Machine Learning. Predictive Analytics was already being used in Inventory Forecasting thereby smoothening the Demand - Supply Curve, improvising Warehouse Design and optimizing the Logistics and costs associated. We are now seeing a high implementation of similar technologies in Last Mile Logistics for Network Management, Route Optimization and Real Time Tracking. Such an ecosystem is enabling multiple start-ups in India to develop plethora of products and on-demand services. Some of these Start-ups have also been successful in acquiring overseas customers from Europe & North America thereby enabling a parallel ecosystem and opportunities for Indian developers and entrepreneurs.
Automation: With growing volumes and an ever increasing long tail of categories came larger warehouses and complexities. The only way out to ensure a smooth fulfilment was automation. Pick and Put to Light, miles of Conveyor Belts, Slides and Chutes, Multi-Tier Sorting are all being implemented on scale. As the shipments move to 3PL Service Providers, these are moved through Dimensional and Weight Scanning Machines which automatically measures the dimensions, weights and even takes and stores pictures of the shipments. The automated sorters are linked and can sort individual shipments to their destinations pincodes or network hubs and also demarcate if those needs to be bagged and further connected to Airlines, Surface Transporters or Railways. All these are leading to better quality control and efficiency.
On-Demand Services & Price Discovery: Trucking in India has been a traditional business - unorganized and cartelized leading to immense inefficiencies and price discrepancies. Surface movement of goods specifically for ecommerce shipments is on the rise due to the implementation of GST and cost factor. A lot of Start-ups are working to solve this problem by bringing in technologies which help in aggregation, multi modal truck driver rotations, GPS and dynamic tracking and higher usage of trucking infrastructures. Such start-ups are creating platforms for both long haul and last mile by mapping supply to demand at the micro level thereby increasing the visibility and creating tiered cost structure by dynamic pricing. This enables both the large and small ecommerce and 3PL players with easy access and better cost control. Such Services have the potential to develop into its own ecosystem and disrupt the traditional way of trucking in India. With maturing of such services, the future possibility of a dynamic freight exchange may not be far.
Technology has been an enabler to increase service geography and meet the demands of higher service levels. Innovations are being pursued thereby enabling entrepreneurship and Start-ups to rise and create services and products for the Logistics Industry. The Future is bright & calling!