Digital solutions offer agility and flexibility to manage intricate supply chains
Published on : Friday 04-08-2023
Sunil David, Digital Technology Consultant.
The logistics and warehousing sector are greatly influenced by digital transformation. What are the factors driving this change?
Logistics Industries continues to play a significant role in the industrial innovation of India and we continue to be open to technological advancements. The seamless flow of goods from manufacturers/producers, merchants, or wholesalers finally to the consumers has gone through a significant shift due to the technological advancements. The logistics industry has been significantly impacted by the switch from manual to automated technologies.
The demand for warehousing space in India increased significantly in 2022 as well as in the first two quarters of Calendar Year 2023 on the back of the growing e-commerce sector and organised retail. The notable aspect being investments made even in Tier 2 and Tier 3 cities in India. There is clearly a rising demand for organised warehousing facilities in India which can be attributed to some of the major initiatives like the Digital India, Production Linked Incentive (PLI) schemes initiated by the Govt of India over the last few years. With the launch of the National Logistics Policy last year, this is bound to give a huge fillip to the warehousing sector and we are likely to see creation of world class warehousing spaces going forward. India's strategic location at the crossroads of major trade routes between Asia, Europe, and the Middle East presents an opportunity for the development of logistics and warehousing hubs. India's increasing focus on multi-modal transportation, such as road, rail, air, and waterways, presents an opportunity for warehousing companies to develop integrated logistics solutions. India has made significant improvement in the logistics ranking of the World Bank by moving up 6 places to Rank 38 out of 139 countries in the 7th edition of Logistics Performance Index (LPI 2023). India has been taking numerous initiatives to improve its logistics efficiency over the last few years. The World Bank has thus acknowledged India’s remarkable efforts towards increasing logistics efficiency. As per Statista the size of the Indian logistics market was over $274 billion during the year 2022.
The logistics and warehousing sector was indeed experiencing significant transformation due to digitalisation. Several factors were driving this change:
Advancements in Technology: The rapid advancement of technologies like the Internet of Things (IoT), Analytics and Artificial Intelligence (AI) and Cloud computing have played a crucial role in transforming the logistics and warehousing industry. These technologies enable real-time tracking, predictive analytics, automation, and better decision-making driven by Data.
E-commerce Growth: The boom in e-commerce and online shopping in India has led to a surge in demand for efficient logistics and warehousing solutions. Consumers expect faster deliveries and streamlined processes, which necessitates Digital transformation in the sector.
Customer Expectations: As mentioned above, customer expectations have evolved significantly. They demand transparency, visibility, and convenience throughout the supply chain. Digital transformation allows companies to meet these demands by offering real-time tracking, efficient order management, and personalised experiences.
Supply Chain Complexity: Globalisation and complex supply chain networks have made it challenging for traditional logistics and warehousing methods to cope. Digital solutions offer the required agility and flexibility to manage intricate supply chains effectively.
Last-Mile Delivery Optimisation: Last-mile delivery is a critical and often expensive part of the logistics process. Digital transformation has enabled route optimisation, delivery tracking, and even experimentation with alternative delivery methods like drones and autonomous vehicles.
Sustainability and Green Initiatives: Environmental concerns have pushed the logistics industry to adopt greener practices. Digitalisation facilitates more efficient route planning, which reduces fuel consumption and emissions, as well as better inventory management to reduce waste.
As technology continues to evolve, we can expect further advancements and innovations in this sector.
What are the technology trends that are revolutionising modern distribution and fulfillment centres?
Several technology trends are revolutionising modern distribution and fulfilment centres. Some of the prominent ones include:
IoT and Real-time Tracking: The Internet of Things (IoT) played a crucial role in providing real-time visibility and tracking of inventory and assets within the warehouse. IoT sensors and RFID tags enabled precise location tracking, helping optimise workflows and monitor inventory levels.
Artificial Intelligence (AI) in Order Fulfilment: AI-powered systems were being used to optimise order fulfilment processes. AI could intelligently route orders to the nearest fulfilment centre, calculate the most efficient picking paths, and dynamically adjust order priorities based on changing conditions.
Drones for Inventory Management: Some companies were experimenting with drones for conducting inventory counts in large warehouses. Drones could fly through the aisles, scan barcodes, and quickly gather data, reducing the time and labour required for manual counts.
How is robotics in general, AMRs/AGVs in particular, supporting these endeavors?
Safety and Reliability: AMRs and AGVs are designed with safety features and obstacle detection capabilities. They can navigate through crowded spaces, avoiding collisions with workers and other objects. Their reliability and precision in performing tasks contribute to smoother warehouse operations.
Collaborative Work with Humans: Collaborative robots (cobots) can work alongside human workers, assisting them with tasks like order picking or packing. This human-robot collaboration improves overall productivity while ensuring that robots handle heavy lifting and repetitive tasks, reducing the risk of worker injuries.
Scalability and Cost-effectiveness: AMRs and AGVs come in various sizes and configurations, allowing distribution centres to choose the right type of robot for their specific needs. They offer cost-effective solutions, particularly when compared to the ongoing costs of human labor.
Flexible and Scalable Operations: AMRs and AGVs are highly flexible and scalable solutions. They can be easily deployed or redeployed to adapt to changing warehouse layouts or varying demand levels.
Digital transformation of Intralogistics is incomplete without corresponding change in Warehousing as well as Shipping & Distribution. How are these segments performing together?
Digital transformation has been reshaping various industries, and intralogistics, warehousing, shipping, and distribution are no exceptions. These segments are interconnected and heavily reliant on each other for the smooth functioning of the supply chain.
Intralogistics segment has experienced significant advancements in automation and digitisation. The integration of technologies like Internet of Things (IoT), Artificial Intelligence (AI), robotics, and warehouse management systems (WMS) was improving efficiency, accuracy, and speed in material movement within warehouses and distribution centres.
The success of digital transformation in one segment often depended on the seamless integration with the others. For instance, a modern warehouse with automated intralogistics systems would be most effective when connected to an efficient shipping and distribution network. Timely and accurate information flow between these segments was crucial for optimising the entire supply chain. It's important to note that the pace and success of digital transformation vary among companies and industries. While some companies like Amazon, Flipkart which are in the e-commerce business are at the forefront of adopting new technologies, others have been slower in their implementation due to factors such as budget constraints, infrastructure limitations, or organisational readiness.
What are the software platforms available that facilitate this transformation?
There are several software platforms that are available to facilitate digital transformation in the fields of intralogistics, warehousing, shipping, and distribution. These platforms are aimed to optimise operations, improve efficiency, and enhance visibility across the supply chain. Here are some prominent software platforms that can be considered.
Warehouse Management Systems (WMS): WMS software helps manage day-to-day warehouse operations, including inventory tracking, order fulfilment, picking, packing, and shipping. Some popular WMS providers include:
• Oracle Warehouse Management
• SAP Extended Warehouse Management
• Infor Cloud Suite WMS
• Blue Yonder Warehouse Management, and
• Fishbowl Warehouse.
Transportation Management Systems (TMS): TMS platforms focus on optimising transportation operations, such as route planning, carrier selection, freight auditing, and tracking. Leading TMS providers include:
• Oracle Transportation Management
• SAP Transportation Management
• MercuryGate TMS
• C.H. Robinson TMS, and
• BluJay Solutions' Transportation Management (part of eOpen).
Supply Chain Visibility Platforms: These platforms offer real-time tracking and visibility into supply chain activities, allowing stakeholders to monitor shipments, inventory levels, and performance metrics. Examples include, Shippeo, FourKites, Transporeon, Mercurygate, etc.
Apart from these WMS, TMS platforms and Supply Chain Visibility platforms, the need for seamless integration with ERP systems like SAP, Oracle, Microsoft Dynamics as well as with IoT platforms like AWS IoT Core, Microsoft Azure IoT Hub and other platforms becomes extremely important.
How is 5G impacting the logistics and warehousing scenario given the importance of connectivity in IIoT based automation?
Given its inherent characteristics of extremely low latency, very fast speeds, massive capacity, and extremely high reliability, 5G technology has tremendous potential to significantly improve supply chain management and logistics in Indian warehouses. Here are some of the ways in which 5G can play a role:
Faster speeds and highly reliable connectivity: With speeds of 400 Mbps and higher and with a potential reliability of 99.99999% uptime being possible with 5G technology, warehouses can enjoy faster and more reliable connectivity, enabling real-time data exchange and communication between different stakeholders in the supply chain.
Better visibility of Inventory: 5G technology can ensure advanced tracking and monitoring of systems, enabling near and accurate real-time tracking of inventory levels, location, and status. This can help Warehouses to manage their inventory more efficiently, reducing the risk of stockouts, overstocks, and other inventory-related issues which are very common .
Video analytics: 5G will also enable new video analytics capabilities, which includes real-time full video capture of the various products being shipped, the truck being loaded , how many containers and pallets are being used and real time inventory visibility .
Predictive maintenance: 5G technology can enable the use of IOT based sensors and Data analytics to predict equipment failures and maintenance needs, enabling proactive maintenance and reducing downtime. This can help warehouses to maintain their equipment and infrastructure more effectively, reducing maintenance costs and improving overall productivity.
Potential cost savings and efficiency gains that Indian warehouses can achieve by adopting 5G technology: Since warehouses are expanding in size and scale, 5G offers lower total cost of ownership (TCO) than Wi-Fi and other alternate wireless technologies that have been tried in warehouses. As per certain studies the connectivity cost for a connected warehouse with Wi-Fi incur 22% higher per sq.ft than cellular technologies Capex will be higher and opex will be lower for 5G and the other way around for Wi-Fi.
(The views expressed in interviews are personal, not necessarily of the organisations represented)
Sunil David has 28 years of experience in the IT and Telecom industry of which close to 20 years was with AT&T, one of the top Communication Service Providers of the World and a Global Fortune 100 Firm. Until recently, Sunil was the Regional Director (IoT) India and ASEAN for AT&T India where he was responsible for building the IoT strategy, Sales, Business Development and also worked on building a robust IoT partner ecosystem; and was also actively involved in a number of marketing initiatives to help enhance the AT&T brand in the IoT space.
In his new phase of life, Sunil is Advising and Consulting AI and IoT Startups that are aspiring for the next level of growth.
Sunil has been a recipient of a number of Awards and Recognitions including 6 awards in 2021 and 3 this year from various Industry bodies and media conglomerates in recognition for his work in Digital Technology advocacy, Digital Skilling initiatives, contributing inputs towards IoT policy creation for India and for contribution to National Institute of Electronics and Info Tech, an Autonomous Scientific Society of MeITY, Ministry of Electronics and IT, Govt of India for contributing inputs on the syllabus and specific courses in the Emerging tech space (IoT, Cloud, AI ) that needs to be incorporated into the Curriculum of State and Central Govt Universities. NASSCOM Foundation and IBM India have also planted tree saplings in Sunil’s name for his contribution to the Tech Industry.
In August 2021, Sunil was awarded as ‘India’s Fastest Growing Digital Evangelist’ for FY 20-21 by a large media conglomerate Asia One Magazine at the 14th Asia Africa Business and Social Forum. The same month he was also conferred with the ‘CXO Excellence Award 2021’ by CXOTV part of TechPlus Media Group and joining the league of League of Outstanding Technology Leaders of India. This award was given on the basis of peer recommendations from the Industry.