As the world moves towards stability, businesses worldwide have started analysing this new landscape to apply the lessons learned from the pandemic.
In the last two years, the global supply chain has been disrupted in a way that has never happened before. The way we shop, the way goods are manufactured, the way we work, and the way our economy functions has been redefined by new dynamics that have brought significant changes in our lives.
A major shift has occurred in the logistics and supply chain industry in recent decades due to technological advancements, the growth of e-commerce, globalization, sustainability concerns, and increased competition which have all played a role in shaping the industry.
A wide range of technology, such as GPS, RFID, Artificial Intelligence, and Internet of Things and automation have made it possible to monitor and improve operations in real-time, while the growth of e-commerce has created new demands for faster and more flexible delivery methods with last mile delivery.
Globalization has led to the development of more complex logistics systems to manage cross-border shipments, and a growing focus on sustainability has pushed companies to adopt environmentally friendly and socially responsible supply chain practices.
For the logistics industry, it’s not just about adapting. It’s also about innovating and pivoting to stay ahead of the curve. With e-commerce gaining maximum significance in this new normal, adapting to a dramatically altered supply chain is imperative for survival as they are always vulnerable to disruption.
A research found that on average, companies experience a disruption of one to two months in duration approximately once every 3.7 years. In order to avoid the losses associated with disruption, companies are building flexibility into their supply chains and investing in new technologies that will help them react quickly to disruptions.
In the last two decades, we have seen the Indian logistics and supply chain sector evolve from a support sector to a high-impact sector. According to a report, the size of the Indian logistics industry was around $100 billion in 2020, up from around $40 billion in 2010 and around $15 billion in 2000.
It is estimated that the size of the Indian logistics market will grow to about $380 billion by 2025.
The logistics and supply chain landscape has changed dramatically in the past decade, with advancements in warehouse management systems (WMS), the use of Robotic Process Automation (RPA), AI, ML, and IoT for inventory management, tracking, and order placements to routing schedules, all having drastically altered the way we do business.
Gartner predicts that by 2026, more than 75% of commercial supply chain management application vendors will deliver embedded advanced analytics (AA), artificial intelligence (AI), and data science. Supply chain application vendors are using AI and Augmented Reality (AR) to make decisions faster and more accurately.
Moreover, e-commerce and online grocery shopping with contactless deliveries and cashless payments are redefining consumer-facing business. Retailers are facing more pressure than ever before to provide a seamless and personalized experience for their customers, as well as provide value in ways that go beyond traditional retail models. With the rise of drones, retailers can now offer lightweight goods delivery, making it easier for them to reduce fulfilment costs and capital expenditures associated with physical stores.
The other big change is the rapid proliferation of 3PL and 4PL providers as the manufacturing sector grows. The Indian 3PL market is expected to register a growth rate of over 11.5% during the period of 2020-2025, according to Mordor Intelligence.
While the manufacturing sector set the trend for outsourcing their supply chain management, other sectors also see benefits. It helps that the service providers have evolved into key partners, offering expert, end-to-end solutions ranging from documentation, tracking, warehousing, and legal compliance.
Moreover, many logistics players in the sector are also turning to eco-friendly and sustainable operations that are smarter, technology-driven, and cost-effective. Some of the advantages of this shift include reduced emissions, lower fuel costs, lower maintenance costs, and an increase in productivity. Companies are going green with their warehouses and operations, including using electric vehicles and building smarter warehouses with energy-efficient systems.
Sectors such as automobiles, e-commerce retail, farm and agriculture, and healthcare are also fuelling the demand for multi-modal logistics. With over 70% of the world’s population living in urban areas, there is a greater need for local delivery options such as same-day delivery to reduce transportation costs and boost efficiency. India’s Prime Minister Narendra Modi had announced investing Rs 100 lakh crore in Gati Shakti Master Plan, which will offer multimodal connectivity to over 1,200 industrial clusters, resulting in reduced logistics costs and better connectivity. The Prime Minister said that ‘Gati Shakti’ was a grand programme aimed at creating a world-class logistics industry in India.
Lastly, the Indian container manufacturing industry has seen tremendous growth in the last two decades. The Indian container market is one of the strongest in the world, with production levels doubling every 6-8 years. India has a large manufacturing base and an export economy that has been steadily growing for two decades. It is also important to note that India is one of the fastest-growing container manufacturing countries globally. This is an exciting time for the Indian logistics industry as container manufacturers are stepping up to fill the demand-supply gap in the global supply chain network.
The transportation and logistics industry is currently undergoing immense change. This change brings both risk and opportunity, with new technology, new market entrants, new customer expectations, and new business models. We have been at the forefront of these changes for decades because we know how to manage the disruption that change brings—how to maintain our customers’ operational efficiency, profitability, and competitive advantage.
Overall, the last two decades have seen a significant evolution in the supply chain and logistics industry, driven by a combination of technological advances, changing customer demands, and increased competition. As a result of these changes, supply chain and logistics operations have become more efficient, agile, and sustainable.
Views expressed above are the author’s own.
END OF ARTICLE
Add a Comment