India’s logistics embraces digitisation to respond to business changes


By Kshitij Shah, AVP & Group Director, Infosys

With rising consumer and client expectations and technology altering the course of all enterprises, rapid digitization efforts are spurring industry-wide technical breakthroughs, the logistics industry is embracing digitisation at an unprecedented pace to amplify the underlying heritage capability.

Like most industries witnessing advances that increase productivity, product reliability, and service speed, a paradigm shift is under way in the logistics sector, earlier famed for intricate operations, bottlenecks, and near-absolute opacity. Today though, logistics is moving towards being a more technologically advanced, integrated, and streamlined industry that is a highly cohesive supply chain management ecosystem.

Consequently, India’s $250 billion logistics sector is growing rapidly – Smart gadgets and the Internet have fuelled the growth of Indian e-commerce logistics. According, to the industry numbers, between 2016 and 2021 e-commerce logistics market grew by 39%. This figure is not surprising given that between June and August 2020, e-commerce consumers made up more than 40% of Indian’s 700M urban active internet users.

Launched in 2014, Make in India is government’s another transformational campaign intended to foster the manufacturing industry and attract foreign investors to invest in the Indian economy. The aim is to raise the contribution of manufacturing sector to the national GDP from 15% to 25%. To achieve the ambitious goals of Make in India and raise the economic confidence level of the country, it is imperative to digitize the country’s logistics infrastructure. Improving the transport network, optimizing cost of logistics and offering efficient movement of goods is vital for the campaign’s wider reach. Therefore, leading to the launch of National Logistics Policy (NLP) in September 2022. The exponential value of both Make in India and NLP will transform India into a preferred manufacturing hub globally.

Despite these factors, however, the pandemic exposed the sector’s persistent flaws and inefficiencies, signalling that much work remains to be done. During the initial days of pandemic, the industry witnessed softness in demand, fewer transactions to process, and increasing pressure to move online. Owing to the lack of a reliable and current integrated logistics digital platform, which made it impossible for logistics leaders to assess time and cost-effectiveness, the sector made a tectonic shift in record time from traditional logistics to digitalization and contactless operations. E-commerce logistics players, for instance, adopted novel strategies to keep operations running smoothly while supply chain lockdowns in other nations hampered operations.

The pandemic has indeed made enterprises realise that building a strong digital core is key to stay relevant in this rapidly evolving technological landscape. Digitization will revolutionise the logistics industry and organisations must invest in technologies to assure efficiency. The emerging technology trends that have the potential to catapult the industry are as follows:

  • AI and Machine Learning: By identifying patterns in supply chain data, artificial intelligence and machine learning can assist businesses in improving their logistics operations and reduce cost to serve. 
  • Internet of Things (IoT): It is not possible to have digital sensors at every end points which eliminates the blind spots, this enables to avoid transportation delays, improves vehicle monitoring, reduces operator errors and even enable health and safety use cases by leveraging computer vision and edge compute. 
  • Cloud Computing: In a variety of ways, cloud computing can help reduce infrastructure costs and increase agility. For one, rather than having to buy and maintain expensive hardware and infrastructure, cloud computing allows one to pay only for the resources used. Cloud computing also enables quick and easy infrastructure scalability in response to changing demand, without the need for additional investments. Cloud computing facilitates rapid deployment of new applications and services in response to changing business needs and opportunities, allowing introduction of new solutions to market faster. 
  • New kid around the block – ChatGPT: Increasingly, chatbot or virtual assistant powered by technology such as ChatGPT is making its way through the logistics sector. With its ability to understand and respond to user input in a way that is similar to how a human would, making the interaction feel more natural and human-like, this cutting-edge technology is enhancing the overall experience by providing more natural and engaging interactions with users.
  • Supply chain collaboration: As businesses struggle to gain visibility and control over their supply chains, suppliers, carriers, and customers are leveraging technology to provide a platform for not only sharing information, but also for collaboratively planning and executing logistics operations. Such a platform is helping eliminate supply chain inefficiencies. 
  • Adoption of SaaS: As an end-to-end solution that helps brands manage inventory, place orders, and uncover sales performance insights to strengthen the health of the business, software-as-a-service has emerged as a disruptor in logistics tech, already.

Nonetheless, digitization is difficult. While many regard digitization as a goal, the truth is, it’s only a tool for business and logistical management. Choosing the right level of digitization is tricky and sizing digitization is also crucial. Next, security must be installed and integrated with government entities while numerous stakeholders rely and put their mission critical demands on the digitized ecosystem. 

Going forward, the industry plans to earn $380 billion by 2025, that’s compounded annual growth rate (CAGR) of 10 to 12 percent for which, logistics firms must adopt digitisation to compete, stay efficient, grow in new areas, and deliver value to customers. New technologies are critical for optimising capabilities, improving performance, and ensuring supply chain efficiency, and no doubt, digitisation is the only viable option for an enterprise to compete and survive.


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