Role of digitalization in reforming the Indian logistics industry

Digitalization – the creation of a parallel world for better performance in the real one. At the very primary level, the parallel world has the ability to create an interconnected, cross-global, two-way communication network. This in turn can lead to realistic expectation setting, pre-emptive disruption communication and situation management, and automated and on-time escalations. Technology has the ability to enable growth and cost efficiencies for logistics. Yet, the adoption in the Indian logistics industry remains slow.  And there’s a pressing need for this to change.

First the bottlenecks

Logistics as an industry faces many unprecedented challenges and changes. The primary challenges in logistics include the authentication and verification of products, accuracy in documentation, and most importantly unpredictable change in norms of the documentation owing to external factors like taxations, governments, inter-state and inter-country relations. However, there are ways to navigate into the primary implementation of digitalization that ensures reaping the benefits of digital twins easier and quicker.

The Need of the hour

No, we’re not talking about digitalization here – we’re talking about skilled resources with expertise in digital migration specific to the logistics sector. The current gap in digitization comes from the fact that skilled digitization resources within logistics are beyond affordability for SME players, while digitization skills in the affordable segment do not have a deep-rooted understanding of logistics and its related challenges.

This stems from the fact that creating a digital twin will largely depend on the ability of the digitization expert to understand the nuances of the industry and create IoT solutions or IIoT solutions to map the same in the parallel universe. This would mean anticipating bottlenecks – identifying the scope of unprecedented changes in norms and the ability to scale or adapt documentation on the go, ability to automate changes within tax structures on the go, and create true value verification mechanisms.

Other elements of priority include the ability of logistics as an industry to collaborate cohesively to offset the results of global geopolitics. With uncertainty being the calling at the moment, routes getting redefined, channels of communication and transparency becoming opaque, the need is to focus on technology that “brings to par” the navigational opportunities for the sector as a whole.

The role that digitization will play

The unpredictable set the tone for the next role of digital upscaling. These come with significant advantages like:

Holistic Visibility – This facilitates more effective, on-time decisions and reduces delays through efficient, timely and quicker detection of issues as well as route analytics and risk assessment

Warehouse and Yard Management – IoT - enabled mobile devices designed to track inventory, data, equipment, and vehicles, translate digital voice to a physical asset for enterprises, better time management, and more productive workforce management

Fleet Management – Mobile scanners, computers, and RFID systems alone help gain visibility into their assets, pre-empt management issues, escalate breakdown and route management issues, thus streamlining operations to keep their fleet moving

All these key aspects lead to interoperability which is a critical source of value in IoT-based systems. The other benefit of structured IoT-based data management is the ability to assess RRR (Route Risk Rates). These focus on several parameters like route efficiency, manpower availability for a route, time cost compared to deliver ROI and more. Digitization enables organizations to deep dive into historic data to make such decisions in a timely manner.

Interoperability – backed by robust digitization structures

Availability of digitization tools is no longer the same challenge that it was 10 years ago – though cost continues to be for skilled technology upgrades. The start-up culture has led to an escalation in the rates of technology upgrades and most upgrades out-time the implementation rate.

The scope for the country with in-house digitalized talent is the ability to identify the CIP – Critical Impact Parameters and their evolution over a period of time, ensuring that the information is accessible to everyone in the industry for quick upscaling and servicing. As times change, dependency on technology increases. And as social distancing has shown everyone, digitization is the only way to stay connected even when physical barriers may be high. The logistics industry is no different – digitization will be the next industrial revolution and Logistics 4.0 will be driven through the adoption of digitization in the years to come.

The article has been written by Vivek Anand Oberoi, Chief Strategy Advisor, East West Holdings Ltd