The global logistics market was valued at $7,641.20 billion in 2017 and is projected to reach $12,975.64 billion by 2027, registering a CAGR of 6.5 percent from 2020 to 2027. How do you see this market evolving in India? This market will expand in India too. It will register a bigger growth than 6.4 percent CAGR. Many MSMEs are yet to jump into the logistics automation bandwagon. Most of the growth will come from there. What are the major challenges impeding the growth of the logistic industry? Where do you see the packaging industry post pandemic from a technological standpoint adoption?
Some of the major challenges are seen in the following areas:
• Transportation issues and road blocks. Albeit GST implementation, the goods movement is not yet smooth.
• Rail tariffs are still a challenge.
• Port and shipping problem exist due to lack of clarity in policy.
• Warehousing and taxation discrepancies.
• Companies are making slow transition into newer technologies.
• Cost of accusation of supply chain solutions is still high.
The Packaging companies were coming up with innovative technologies that were friendly to the environment, reusable, and biodegradable. But concerns about the hygiene and safety of reusable packaging temporarily halted the packaging industry’s progress towards a sustainable and circular supply chain. The specific areas in the Packaging Industry that have been affected include: are an increase in digital printing, consumer preferences, e-Commerce, new or heightened hygiene & consumer-safety concerns, redefined sustainability, and an increase of single use plastics and lifted bans. Following the pandemic, packaging companies will need to rebalance sustainability goals that incorporate heightened hygiene, normalize e-Commerce, and take product cost into consideration. The impact of the pandemic will have a positive effect on performance, because these new trends will highlight customers’ needs across the industry.
1. The Internet of Things is a connection of physical devices that monitor and transfer data via the internet and without human intervention. How does IoT in logistics enhance visibility in every step of the supply chain and improve the efficiency of inventory management?
The implementation of IoT is relatively high in asset-intensive industries like manufacturing, transportation, and utilities. Let it be stationary or mobile, these assets are now becoming a part of a connected ecosystem, where they can interact and share vital information with each other. Shipment vehicles like trucks and ship vessels are movable assets that are becoming a crucial part of the IoT network and leaving a long-lasting dent on the logistics and transportation industry. Both of these industries along with warehousing were the primary movers to embed connected systems even before the term ‘Internet of Things’ was coined. This early adoption has enabled these sectors to flourish and further empower other industrial segments to revamp their supply chain management and other end-to-end processes. IoT is being extensively used for communication systems, vehicle tracking, supply chain monitoring systems, and IT security.
2. AI algorithms combined with Machine Learning support companies to be proactive in dealing with demand fluctuations. Please elaborate on how AI-based forecasting solutions allow managers to plan supply chain processes and find ways to reduce operating costs. Also, how are self-driving AI and smart road technologies are affecting a positive shift towards delivery service automation?
AI based forecasting tools are helping companies to pare demand with supply. The bottom-up and Top-down demand forecasting using AI tools help reduce operating cost by improving demand accuracy thus reducing inventory holding cost. In some industries AI based forecasting has helped companies to transition to ‘Just in Time’ (JIT) inventory models reducing operating costs and improving bottom-line. demand forecasting using AI tools help reduce operating cost by improving demand accuracy thus reducing inventory holding cost. In some industries AI based forecasting has helped companies to transition to ‘Just in Time’ (JIT) inventory models reducing operating costs and improving bottom-line.
3. Last-mile delivery is the most important part of logistics as it is directly related to customer satisfaction. Furthermore, as the last step of the supply chain, from the warehouse or distribution centre to the customer, it is often inefficient and also comprises a major portion of the total cost to move goods. Please elaborate on the various problems faced during this phase and how can companies overcome them?
Last mile delivery still remains the weakest link in the entire logistics chain. The proper route planning, availability of trucks and load factors increase the cost of transportation. Some of this cost is passed on to the consumer by the companies. This increases the overall cost of purchase. This can be overcome by implementing transportation optimization solutions. These solutions are robust and apply AI/ML to solve the transportation problems based on historical data. Operations Research model is built into the algorithm.
4. Please elaborate on how warehouse automation increases efficiency, speed, and productivity. Also tell us how does pick and place technologies such as automated guided vehicles (AGVs), robotic picking, automated storage, and retrieval (ASRS), and put-wall picking reduce error rates and increase warehouse productivity?
Warehouse automation tools improve productivity and increase efficiency by reducing human errors. At each stage of automation it is seen that error reduces by more than 70 percent. AGVs and Robotics allow precision pickings reducing error rates by more than 90 percent.
5. Logistics services are becoming extremely vital for price sensitive customers who require a wider choice of high quality products with timely delivery. Thus, an increase in trading activities due to globalization fuels the growth of the logistics market. Where do you see the market for the Logistics Industry in the near future?
The Logistics Industry is poised for high growth in the next 3-5 years. With more companies jumping into the logistics automation bandwagon, the CAGR is expected to be in double digits. With COVID-19 now at the endemic phase in India, more logistics automation will happen now. All this will happen provided the government takes cognizance of the issues faced currently and ease rules and regulations and allow free movement of goods as promised during implementation of GST.
