Addressing the Challenges in Logistics Automation

Janifha Evangeline | Sunday, 30 April 2023, 16:43 IST

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Excerpts from a conversation with Mani Bhushan, Chief Business Officer, Ekart in which he walks us through the challenges faced by Indian logistics automation market and how to address them and more.

The Indian logistics automation market is expected to reach INR 145.10 billion by the end of 2027, expanding at a CAGR of 13.28 per cent during the 2022 – 2026 period. How do you see this market evolving in India? What are the major factors driving the growth of this market?

E-commerce has been a big driver as people in cities and even tier-2 and beyond have gone digital and are ordering online. Make-in-India too is influencing the growth of the logistics sector as more companies set up their manufacturing bases in the country and look to cater to both the domestic and the export markets. The supply chain is thus being forced to respond with faster response time, real time information of movement, lesser handshakes and timely deliveries.

The National Logistics Policy rolled out last year, has clearly indicated its intent to bring India’s logistics spend to comparable single-digit global benchmarks by 2030. Currently, it is 14%-16% of India’s GDP. Logistics is ancillary to just about every industry, and the cost pressures will always be there. Automation will be key to reducing costs and cutting turnaround time.

Automation of mundane and repetitive jobs and   introduction of robots and machine learning can help cut back lead times for shipments, by bringing new efficiencies to the supply chain.

Modern-day consumers expect visibility of their orders. However, a lack of visibility throughout your supply chain can cause issues that can seriously hamper your goods' flow. Unnecessary delays become the norm without end-to-end transparency, as do warehouse operational inefficiencies. How can the industry players address these issues?

Logistics companies can address issues related to a lack of visibility throughout their supply chain by utilizing the right technologies that enable real-time tracking and tracing of goods, improve transparency, reduce delays and enhance overall efficiency. Enhancing end-to-end visibility and addressing concerns may both be accomplished by putting an emphasis on communication and collaboration among all supply chain stakeholders.

In today’s environment where Ecommerce is scaling across the country, giving top notch experience to customers is not an option but a must. At Ekart we have complete transparency right from the time order is placed to the predicted date and time of delivery. There are enough checks and balances leveraging the technology to ensure process and tracking are adhered to at all the stages of the shipment flow.

Companies across different sectors are focusing much more on sustainability than they were just a few years ago, logistics included. Reducing emissions is central to tackling sustainability in logistics, but maximizing time and cost savings through supply chain management is also crucial. How can logistics companies achieve this?

By employing different techniques such as optimizing transportation routes, embracing new technologies such as IoT, and enhancing inventory management, logistics organizations may achieve both sustainability and cost savings. Implementing these measures can assist businesses in lowering emissions and increasing efficiency, resulting in a more sustainable and lucrative supply chain.

The lack of adequate infrastructure is a major challenge faced by the Indian logistics industry. The current infrastructure is not able to meet the increasing demand for logistics services. This results in higher costs and longer delivery times. How can logistic companies address these challenges?

Logistics traditionally has been an unorganized sector, and there is huge potential to grow the market and offer solutions that help take the sector forward as an organized market. Logistics companies in India can address the infrastructure challenges by investing in their own infrastructure, such as warehouses, transportation vehicles, and technology systems. Additionally, they can optimize their operations through route planning and scheduling, inventory management, and adopting new technologies like GPS tracking and automated warehouse systems that can help them reduce costs and delivery times, enhance efficiency, and provide better services.

How is the rise of logistics automation positively influencing retail, ecommerce and manufacturing industries among others?

With the advent of digitization, customers now have much higher expectations for the timely, efficient, and secure delivery of their products. As a result, it is now vital for logistics providers in all sectors, including manufacturing, retail, and e-commerce, to satisfy the customer's delivery expectations.

Through automation technologies we gain significant advantages like faster processing, saving labor costs, data precision, elimination of significant errors and efficiency, which ultimately leads to an improved customer service. One of the most significant benefits of automation is that it enables comprehensive tracking of the flow of products from one location to another and has greatly improved control of the shipment throughout the process of supply chain management by primarily reducing the number of touch points. It assists you in making crucial business decisions for potential business possibilities. Through automation businesses not only improve their productivity but also achieve cost-effective and speedy delivery of shipments.

With Ekart, as one of the leading supply chains in the country, we have been able to solve the supply chain concerns for the ecosystem - especially the retail ecosystem in the country - through our end-to-end supply chain management solutions and automation is a significant part of it. Automation has a significant impact on speed of delivery which in turn reduces inventory turnaround times and positively impacts working capital requirements for retailers, and ecommerce players. It brings in a lot of capital efficiency to the system and improves the return on capital employed. The capacities which we have built, we are in the right place where we can handle not only the ecommerce supply chain but also the B2B logistics requirements such as warehousing, which aligns with our vision of becoming a 4 PL logistics player in the country.

How do you see the logistics market evolving in the future?

The future of the logistics industry depends upon how we can develop processes that promote the ease of doing business through faster onboarding, providing speed and service quality while reducing the cost of doing business by reducing losses, having an integrated supply chain with integrated cost structures and bringing in economies of scale. The customers today are looking for end to end solution providers that take away significant pain of handling multiple service providers at every leg of the supply chain. Companies that do not have supply chain expertise as their core strength are happy to work with integrated players and this in turn allows them to focus on what they do best. Taking a customer first view and building an agile and nimble supply chain that cuts across requirements of multiple clients and industry types is the need of the hour.

It is a very interesting space, there is no doubt that logistics is reshaping businesses today and it plays a significant role especially for the e-commerce industry. Businesses today understand the importance of logistics and building capacities, infrastructure, development and automation. Logistics as an industry has paved the way for new age companies who wish to penetrate the market.

What the industry really is moving towards is an integrated supply chain ecosystem wherein the entire ecosystem works in tandem, right from manufacturing logistics, to procurement logistics, warehousing services, storage, distribution and finally the delivery to the end consumer.

Logistics will definitely witness a growth story, and there is a need to make investments and think differently to bring more innovation into the sector and enable the retail growth story in India.

 

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