Digitalising logistics and supply chain

By OEM Update Editorial July 1, 2024 12:38 pm IST

The digitalisation of e-commerce has made fast and reliable delivery a basic expectation of customers. A structured logistics system with an efficient supply chain and efficacious warehousing makes or breaks the company as it is said that in many cases, the real work of a company occurs in its supply chain and not in its marketing or sales departments.

Logistics aims to meet customer needs at the right place, at the right time, and at the right price. Indian logistics companies are adapting to the pressure for efficient delivery in the current e-commerce era by leveraging automation, data analytics, and innovative solutions. The digitalisation of e-commerce prompts logistics companies to streamline their operations with technology-driven solutions. This rise in demand has enabled logistics companies to address challenges such as the ‘last mile’ by setting up pick-up points in local stores and partnering with hyperlocal delivery services.

Bar/QR code scanning at various checkpoints enhances visibility and tracking accuracy, ensuring better inventory management and timely deliveries. Furthermore, logistics providers rely on third-party logistics (3PL) services to manage inventory, packaging, warehousing, and delivery to meet growing customer demands. With a focus on ensuring swift and reliable deliveries, these 3PL providers have integrated technological advancements to enhance order processing efficiency and optimise delivery routes.

Nikhil Agarwal, President of CJ Darcl Logistics Ltd, shares how the surge in e-commerce has additionally fuelled the demand for air cargo services due to its speed and global reach, necessitating changes in logistics and air cargo operations. Expanding e-commerce into tier 2 and tier 3 cities has led to developing regional distribution centres using the ‘hub and spoke’ model. This model brings goods closer to customers, improving nationwide connectivity. This synergy between e-commerce growth and logistics efficiency drives economic development and enables the seamless flow of goods across India.

Logistics

Improvements in logistics and distribution networks support manufacturing production in India. Timely delivery of raw materials and production downtime are ensured with improved logistics. Technological advancements further refine these processes and streamlined logistics can lower transportation and warehousing costs, contributing to overall cost efficiency.

Sandeep Chadha, Founder and CEO of Warehouster shares how efficient logistics and distribution networks are essential for supporting increased production volume. Distribution networks provide various means for transporting large materials, including roads, railways, and sea routes. This redundancy ensures timely delivery even if disruptions occur in one channel.

Improved logistics often employs larger transportation units like 40-foot containers. This allows for bulk material movement, leading to cost savings through economies of scale. Efficient infrastructure ensures seamless “last-mile” delivery, meaning finished products reach vendors and end-users promptly. This is crucial for maintaining customer satisfaction and efficient order fulfilment when production increases.

Just-In-Time (JIT) inventory systems

Just-In-Time (JIT) inventory systems are an effective approach to amplify supply chains. Synchronised production schedules with customer demands reduce waste and storage costs while ensuring the materials are available when needed. It eliminates the need for excessive inventory, which cuts down on storage space and handling expenses, also reducing waste due to spoilage or obsolescence. This approach reduces the need for dedicated storage space at your facility, potentially leading to cost savings. Successful implementation of JIT requires accurate demand forecasting and dependable suppliers to avoid production delays.

JIT’s inventory system relies on suppliers located nearby to deliver materials frequently, often within just a few hours. This frees up valuable space in your facility. With JIT, you are constantly receiving and using materials, leading to a higher inventory turnover rate. This means your money is kept from excess inventory.

JIT often involves outsourcing some inventory management to Original Equipment Manufacturers (OEM) vendors. These vendors may store the materials and deliver them directly to your production line as needed.

Supplier relation

Strong supplier relationships are crucial for an efficient supply chain. Akshay Hegde, Co-Founder of ShakeDeal, shares, “At ShakeDeal, we understand and go beyond just transactions, building partnerships based on open communication and trust. Collaborative platforms make real-time information sharing possible for quick adjustments to demand or supply changes and risk prediction and management, ensuring timely deliveries. These relationships result in cost savings through bulk purchases or preferential pricing. As a result, fostering strong supplier relationships that enhance the overall supply chain performance.”

Building strong relationships with suppliers and utilising collaborative platforms are crucial for enhancing supply chain transparency and responsiveness. Strong supplier relationships create a partnership where you share the same values and commitment to customer satisfaction, fostering a more collaborative environment.

When you support your suppliers’ success, they’re more likely to prioritise your needs. This two-way street ensures a reliable supply chain and increases business for both parties. A collaborative approach, often enabled by dedicated platforms, allows real-time information sharing about inventory levels, production schedules, and potential disruptions. This transparency empowers you and your suppliers to react quickly to changes and maintain a responsive supply chain.

Only seamless technology can streamline logistics and supply chains. With e-commerce making rapid strides, reliable delivery is essential. Automation, data analytics, and innovative distribution models will help logistics companies overcome ‘last mile’ challenges. Tech connectivity from the manufacturer to the last person to use the product is expected to witness drone delivery very soon.

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Quotes-

Sandeep Chadha, Founder and CEO of Warehouster

“JIT inventory systems reduce waste and storage costs by ensuring materials are delivered exactly when needed and users can avoid keeping stockpiled.”

Akshay Hegde, Co-Founder of ShakeDeal

“Strong supplier relationships lead to timely delivery of raw materials, reduction in production time and costs, ultimately boosting market competitiveness.”

Nikhil Agarwal, President of CJ Darcl Logistics Ltd

“The logistics industry supports carbon-neutral goals and positions itself as a leader in eco-friendly practices with the transition to EVs, promoting a sustainable future.”