As mistrust thickens on Europe’s eastern front, and as India remains at the 44th rank on the latest global logistics performance index, several truths come to light.
Foremost is the issue of trust itself.
With several logistical disruptions predicted due to the Russia-Ukraine conflict[1] and uncertainty still very much the language of the system, can the Indian side of the logistics industry pull itself out of infighting to make ground on the more developed nations?
As one of the fastest economies, we know that we need to streamline our supply chains and optimize revenue spent on our logistics system. We still lag far behind China and the U.S. in these matters and a major contributor to the problem is the lack of trust between manufacturers, distributors, logistics service providers (LSPs), and customers.
Given the pandemic slowdown, what can we do to solve this overarching issue that spans companies, transport ecosystems, and state borders? The answer, for the last 5 years, has been found in digital transformation.
4 Ways Technology Can Improve Trust Between Logistics Players
Business leaders are always looking for ways to gain efficiencies and cut down costs. Manufacturers have a set of LSPs they trust, but in case they are looking to expand distribution and cater to a new audience, they find it hard to trust new LSPs.
They also can be skeptical about how the supply chain is run—its poor transparency muddies professional relationships. But with the advent of the following technology, their trust can now be rewarded.
1) Shipment Tracking Tools:
As goods and supplies move around India, the stakeholders at each node are always on the lookout for discrepancies in the delivery, storage, and payment of the services involved. And due to the complexity of the system, it used to be hard to trust in one’s business partners.
One company will be involved in manufacturing the goods, another may be involved in transporting the goods from the factories to the warehouse, while a third company would be involved in last-mile delivery to the end user. In the case of cold chain management, where frozen foods have a smaller window in which they have to be distributed to consumers, the tracking of goods has an even greater importance.
With the advent of geofencing, GPS, and other locating technologies, this part of the logistical cycle has become a breeze. From player to player, and even to the consumer, geographical information on the consignment can be gleaned at any point in time.
Transparency has created more trust!
2) Warehouse and Inventory Management Systems:
A major part of the logistical supply chain lies in the world of warehouses, silos, and godowns.
As goods move away from the manufacturer, the transporters need to promptly send and receive goods from these locations, which act as convenient in-betweens. Previously, the complex process of documentation—invoices, receipts, applications—were slowed down with hard copies, mounting the paper trail.
In the current context of tech-based solutions, the process weighs lightly on its human managers and overseers via warehouse management systems, inventory management systems, cloud services, Internet of Things (IoT), and other robotics.
Warehouse personnel can store all of the inventories received at the warehouse and dispatched to the final destination using the various software available in the market today. Because all of the information will be stored in a database, it is easier to locate inventory and dispense with it. As the transparency increases across the board on account of robotics and automation, so does the trust within human-to-human interaction.
3) Mobile App Solutions for Logistics Players:
As anything that migrates to the digital realm, logistics management processes have also found impetus in mobile apps.
This naturally supports online interaction between the manufacturers, warehouse personnel, and transporters to ensure a greater level of trust pertaining to journey duration, terms, rates, etc.
Fleet operators can understand where and when their vehicles will arrive and/or depart, trimming delivery schedules, lead times, truck dwell times, and operational costs. Other transporters can also, over time, understand how to reduce fuel expenses by identifying nodes of traffic congestion. With data-informed interaction between all the people involved in this process, they find trusting each other a logical process.
4) Ending Data Redundancy:
When there were no mobile apps for logistics and supply chain, the data redundancy rate was higher because manual entries were inconvenient for department heads. The data discrepancies caused by human error rendered the entire supply chain system unreliable to the point where only back-office systems could be relied on.
The data entered into a mobile app and its implementation in the logistics sector is immediately reflected. This reduces the possibility of human error and provides the entire process with the highest level of data reliability.
Current Adoption of Technology in Indian Logistics
The Indian logistics industry had been priming itself for an explosion in recent years. While the pandemic naturally slowed down the progress, things are still set to boom as digitization catches fire across the board.[2]
During the last 24 months of the pandemic, American consulting firm Gartner had urged several chief supply chain officers (CSCOs) that the digital transformation of the supply chain would be the next logical step in the optimization of business, no matter the industry, especially on the back of pandemic uncertainty.
Indian companies now create supply chain management tools with proprietary algorithms, artificial intelligence, and machine learning to simplify decisions for CSCOs, managers, and other stakeholders. The ease at which SaaS disseminate relevant information on routes, consignments, and invoices is why logistics companies are now finding it easier to trust each other.
Other players in the Indian logistics industry simplify the data collection process by doing away with paper in a largely digital freight forwarding business. With rising concerns over carbon footprints and resource wastage, logistics companies are finding paper-free processes more responsible, trustworthy, and accurate.
The way forward is clearly on the path of digital transformation, where the citizens of this country slowly learn to trust each other through the power of data and avante garde technology. As a nation, we should take advantage of the gifts bestowed upon us, and bring the economy forward as the post-pandemic era comes.
[1] Supply Chain Pressures Will Dominate 2022, But Equilibrium Is Coming, Stan Aronow, Gartner, Inc., https://www.gartner.com/en/articles/supply-chain-pressures-will-dominate-2022-but-equilibrium-is-coming
[2] India’s Logistics Sector Poised For Growth And Innovation Amidst Pandemic, Avishek Banerjee, BW Businessworld, July 2021.
[3] Make a Compelling Case for Your Digital Supply Chain Transformation, Rama Ramaswami, Gartner, Inc., February 2021, https://www.gartner.com/smarterwithgartner/make-a-compelling-case-for-your-digital-supply-chain-transformation
