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Digital transformation of logistics industry

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This pandemic has forced the world to move towards an essential bouquet of digitally enabled, dependable and scalable services at a much faster pace than what could have been expected.

Digital transformation of the logistics industry

As a result of being forced to spend time at home, people have turned towards different kinds of organized services to cater to their day to day needs. An increased usage of last mile services for meeting various delivery needs has also come true. It has subsequently resulted in greater customer expectations in terms of shorter lead times, better delivery experience and increased safety. The only way in which the last mile delivery companies can meet these elevated expectations efficiently is by having a high level of predictability of their demand and supply along with quick determinant decision making. Certain organized players in the last mile delivery space, who can offer faster traversing of information digitally, definitely have an edge now.

A number of small and traditional businesses are striving to build an online presence and set up logistics for direct-to-home deliveries of their products. They are now using digital technologies to influence their scalability, with delivery being a critical part of it. Due to the pandemic, the demand for local logistics has grown so rapidly that the organized sector has almost skipped the adoption stage, and is well on its way to maturity. The logistics players that are attracting these businesses are not aggregators or platform based services but those who can provide a consistent quality of service. Businesses today want a faster delivery speed along with an increased level of transparency in operations. They also desire autonomy in their operational decisions. As their demand has increased, so have their expectations.

Digital As The Only Way To Scale

Businesses are also looking for highly technological tools to make certain fortifying changes to their operation models. For instance, tools like Shopify are gaining popularity as they allow businesses to easily set up as well as manage their online store with features like multiple order fulfillment and integration with several payment gateways. It also facilitates seamless and automated transfer of information such as size of package, time of pickup and distance to be covered in a quick manner.  Less manual intervention in the order taking process is usually preferred for improved efficiency. Accordingly, the need for a front facing system with increased autonomy in making decisions is gaining momentum among business owners. Hence, the local logistics players need to come up with increasingly scalable and stable systems that can provide the desired level of visibility and control to their business and individual customers alike.

As the demand increases, the need for local logistics players to keep a strict eye on the time and distance calculations also increases. In order to provide a better consumer experience, these companies require sufficient data along with adequate provision to cater to the demand, both at the levels of supply and technology. Maintaining unit contributions is also extremely important. In an attempt to scale without having sufficient digital means, businesses often overlook efficiency and quality of service. Things like real time order clubbing and expectation management from different customer segments are useful for maintaining efficiency, but are only adopted by a few companies who are driven by a zeal to provide a first-class experience to their customers.

Consumer-driven companies focus on rapid recalculation and quick decision making for reaching their optimal level. Such players are always looking to utilise different kinds of demand to find the most efficient way of serving in very dense and large networks. Some other complications such as containment or no-delivery zones or navigating through water logged roads due to excessive rains are also included in their planning, to avoid unnecessary setbacks while making deliveries. A prompt outlook towards operational decision making sets some last mile delivery companies apart from their counterparts. Conclusively, a movement towards digitized decision making is critical to provide a premium and unique offering in the logistics industry.

The Technovation Craze

A number of innovations can add to the increasing stack of these digital tools. These innovative trends can be categorized into two; consumer adopted and business led. LiDAR (or Light Detection and Ranging) scanner, expected to be available in the iPhone 12 Pro versions, is one such technology. It works like a radar but uses lasers to judge distances and depth. It can be used by people to accurately map package sizes with their phone cameras. Confusions in deciding the accurate size of packaging for the item to be sent by the customer can be easily solved with this. However, it is a type of consumer adopted technology which needs to be adopted at a decentralized level. For it to yield benefits to businesses, it needs to be stable, affordable and accessible to all. As it is later adopted by a large share of the population, logistics players can witness a much higher level of efficiency in clubbing and managing orders. A case in point can be the increased popularity of real time location capturing in the last five years.

Certain digital tools can also be seen to be adopted by logistics players to increase their efficiencies. For instance, better satellite image driven technology can be employed for better predictability. We can already see some companies trying to democratize space data, as it is commonly called. Using weather patterns to proactively manage orders can be a good use of it. Logistics players can also look at collecting and utilizing demographics and income data of an area to oversee the number of riders to be reserved for it during the day. Eventually, we can predict that tangential data sources will become substantially relevant to primary business operations. Some unique security mechanisms, such as using biometrics as a reliable and contactless proof of delivery, can also be launched as an in-app feature by some digitally forward logistics companies. Surely, any logistics company that is trying to scale cannot do so without a high level of technology adoption, dependence and innovation.