Logistics Next With New Digital Age Technologies

Sandeep Kulkarni, Head – IT at Panasonic India Pvt Ltd | Monday, 14 October 2019, 06:44 IST

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Sandeep Kulkarni, Head – IT at Panasonic India Pvt LtdIn the changing world where technology has reshaped everyone’s life, all the businesses have to stay on their toes to embrace the digital wave and make the difference in the marketplace. The transportation industry, in particular, seems to be in the difficult spot. Confronted with digital transformation, changing business models (Brick and mortar, online and bricks & clicks), raising customer expectations, severe competitive landscape, logistics providers have their work cut out if they want to stay ahead of the curve.

As per the industry reports, transportation and logistics industry has been one of the laggards to the cognitive era in adapting to the pressures of the fast-paced world of technological innovations, where everything should be performed at the click of a button, better and cheaper.

Managing Customer expectations: The topmost challenge continues to remain “cutting logistical cost” while investing in innovaI tive technology solutions to catch up with the rest of the world. There is an increasing customer demand for personalized orders at a specified place and time. Also, they demand the higher flexibility of choice (changes in place and time at any point) at low or practically no delivery cost. Coupled with these challenges there is no brand loyalty in logistics. Consumers are not interested in who is delivering their parcel as long as it is delivered quickly and undamaged and traceable at all time. While COD orders can expand customer reach, it adds to risk and added the cost of handling cash for last mile agent.

“The future clearly would belong to smart and embedded supply chain logistics which will offer a competitive advantage and the industry is ripe for transformation and the early-mover advantage is up right there”

Next generation of logistics will be leaner, smarter, faster and self-orchestrated. The unprecedented pace of change will be driven by a few radical technologies highlighted below that will be adopted in the coming decade in a big way.

Real-time monitoring from beginning to End – With the use of IoT platforms, organizations can monitor, track the goods movement right from factories to end consumers which will also help optimizing routes, truckloads, minimize revenue loss from empty miles and more importantly monitor goods that require special refrigeration and storage conditions throughout the delivery journey. Big data analytics and advanced visualization dashboards will allow transportation professionals to act on real-time data in order to optimize inventory management and capacity, increase safety, reduce environmental impact and optimize transit schedules by predicting the impact of maintenance, congestion, and accidents.

So IoT platforms coupled with autonomous fleets would bring greater efficiency which will benefit end consumer.

Digital freight marketplace (Uber of trucks) – Growth in online (eretailing) along with penetration of smart phones in emerging markets will usher in new solutions for freight and logistics firms and shift their business model towards mobile-based solutions also known as “uberization of trucking”. Imagine a scenario, where the system allows you to put orders up for delivery and then matches these to the nearest of hundreds of logistics providers. The system calculates the best-optimized route for delivery (based on consumer confirmations) to take and pick up most packages and deliver them quickly while providing rating algorithms and consumer feedback to weed out poor performers and also incentives for best performers. These systems can also help customers to monitor and track individual load within the container. Such business models will help in drastically reducing operating cost by improving asset utilization and fuel efficiency. That’s why we see the rise of a new breed of logistics providers that own no assets but are able to provide logistics services by aggregating information and providing customers better options that never existed before. The market will evolve to more consulting-driven approach than actual movers of cargo leading to new models that are beyond our imagination.

Blockchain: With the evolution of blockchain, the logistics industry will benefit by avoiding paperwork and driving quicker compliance. Just as an internet era changed the technology industry from client-server to web-based and cloud solutions, peer to peer/distributed secure blockchain has the potential to generate new models. In that sense, blockchain technology could emerge as a new operating system for supply chain networks that combine B2C & B2B connectivity with software application platforms. Such platforms can significantly reduce processing costs due to a distributed ledger that helps paper-less transactions endorsed by all stakeholders. They also reduce the risk of disputes, enable the creation of smart contracts along with real-time monitoring and tracking using IoT platforms and uniform view for all stakeholders.

Given these technology trends and huge investments venture capitalists are making in transportation and logistics startups, the future clearly would belong to smart and embedded supply chain logistics which will offer a competitive advantage and the industry is ripe for transformation and the early-mover advantage is up right there.

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