Expert Speak

Technology, a significant enabler for the logistics industry


Technology, like any other arena, is a crucial decider in logistics industry as well. However, the industry which is primarily dominated by unorganized sector can transform into a more efficient one id appropriate technologies are out to use, believes G. S. Ravi Kumar, chief information officer, Gati. Role of technology in making a logistics company become competitive in the growing markets is hereby explained by him.

With the entry of multi-nationals, doubled with phenomenal growth noticed across various industries in India – there has been an ever growing demand for smart logistics and efficient supply chain managementLogistics industry in India is mainly dominated by the unorganized sector and expecting quality service from these players was a distant dream for customers. However, with the advent of technology-led solutions in this sector and emergence of organized players, companies in this sector are striving hard to deliver quality services to their customers.

In this ever changing and rapidly growing business environment, every enterprise is looking for ways and means to put forward their competitive advantages and capture a larger market share. It is a proven fact that adoption of technology is the most important tool for any enterprise to keep its competitive advantage intact. The survival of an enterprise in the age of knowledge-based competitive economy depends on how the company improves their technological capabilities and offers better and innovative services using them.

Even in the logistics sector, it is mandatory for every firm to adopt new technologies and integrate the same into their operations to gain maximum benefits. Every firm in the modern day is under pressure from their partners and customers to change their traditional styles, operationally and organizationally and integrate them with modern systems and technologies to help speedy delivery and perform better. It is noted that even logistics companies are investing hugely on new information and communication technologies to perform better.

Problem areas with older systems
Logistics industry till date is dominated by unorganized sector and penetration of technology is very minimal. Most of the processes are paper based which are highly redundant, wastes lot of time and is seen has a roadblock to expand operations beyond certain regional limits.

On one side though technology is making rapid strides towards advancement; lack of proper infrastructure like roads, electricity and basic communication facilities is also seen as a major hindrance for growth of this sector.

Due to lack of proper technology and support infrastructure, Indian logistics sector lost US$ 30bn in 2010, which is a three-fold increase from US$ 10bn loss that the industry suffered in the year 2003. Though it is highly difficult to pin-point the exact loss that occurred due to inadequate technologies, it is seen as a considerable amount which can be reduced with the implementation of right technologies.

In addition, there is a need for change in the people’s mindset. While, Western markets are highly evolved and organized, using latest technologies to reduce costs; in India people tend to reduce the ‘fixed cost’ which most times leads to increase in operational costs.

Solutions available for logistics sector
With information technology sector evolving in India, many IT companies have developed products and solutions which are helping logistics companies reap benefits from. In order achieve high levels of efficiency, a logistics company needs a standardized express distribution instruction, that helps make the distribution process more efficient and also reduce unwarranted operational costs.

Any logistics company needs to adopt efficient identification technologies, like barcoding and radio frequency identification (RFID); proper data acquisition technologies like optical scanning, electronic notepads, voice recognition and robotics for information management and control. These available technologies save a lot of time and money in foot printing and tracing of products or shipments.

The technologies noted above are simple to implement and easy to integrate. Most of these devices can be used as plug and play if an enterprise system already exists in the logistics company. These technologies which are being evolved further on a continuous basis are widely available even in India. Currently, logistics companies are either importing these systems from abroad or are sourcing them locally.

Among the upcoming and futuristic applications are, Warehouse Management and Distribution System and Automated package movement system. The latter which runs on RFID, is the most advanced version which indicates origin of the shipment, current location, its destination and even the route information. These are the kind of technologies which will play a prominent role in development/growth of logistics sector in India.

Benefits of these technologies
The available technologies like barcoding; RFID; optical scanning; electronic notepads; robotics and voice recognition equipments play an important role in the modern day logistics or supply chain management. Among all, RFID is the most popular technology in logistics and retail sectors, used for a wide array of applications.

With right technologies in place, a logistics company can aim to reduce operational expenses by over 30 percent. These systems also help in reducing the lead time and facilitate express distribution, reduce manual errors, and enables enterprises set-up lean structure for efficient working models.

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