Technology has rapidly changed the world as we know it – from creating the first steam engine in 1765, to using AI and VR in the present day – all of it seems untrue when you first look at it. And matching the rhythm of the drums, supply chains have evolved at an equal pace. An industry that used to present the picture of men carrying back breaking weight into warehouses, now proudly exhibits automated guided vehicles navigating their way through modern warehouses. All thanks to technology and the human skill of being able to wield it. In our cover story this month, we try to understand a much talked about aspect of technology in supply chains – Digitization – and why it has become the need of the hour.
The Fourth Industrial Revolution which took upon automated production as its base, essentially involves an amalgamation of various technologies to blur the lines between physical spheres through the world, and the speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential, rather than a linear pace, disrupting almost every industry across the globe.
The supply chain industry has shown no signs of shying away from this transgression. In fact, the 4th Industrial Revolution has rather forced the digitization of global supply chains and logistics in general.
The global supply chain and logistics industry is estimated to reach a value of USD 16.445 billion by 2026. Being one of the fastest-growing industries worldwide, it needs to adjust more than ever from longestablished practices, to face the challenges of international trade and uncertainties looming globally. Digitisation is the only way forward. Although such continuous changes require strict organization and great efforts on human level, it becomes worthwhile, considering the openness to a global business where the possibilities grow exponentially.
Sharing his views on how digitization of supply chain improves process efficiency and makes them resilient, Ayush Lodhi, Co-Founder & Chief Technology Officer, GoComet says, “The absence of this digitization is felt tremendously when a link breaks in the highly interconnected supply chain due to a supply chain crisis – be it due to a pandemic outbreak, geopolitical tension, weather, or other reasons.”
“In the world that is moving towards digitisation and sustainability, businesses are looking for enhanced value and new growth in post COVID economies. Everything from lower costs to higher revenues to better customer experience and retention can be realized from more modest tech interventions.” says Vineet Malhotra, Co-founder & Director, Kale Logistics Solutions.
GAME CHANGER TECHNOLOGIES
Now that I’ve mentioned the supporting arguments for digitization of supply chains, let us take a look at some lesser known or upcoming technologies that will be a game changer for the digitization efforts of the industry.
Giving the perspective of an airline, Abdulla Alkhallafi, Cargo Manager – India & Nepal, Emirates SkyCargo says, “The air cargo industry has been consistently innovating to cater to the emerging dynamic demands. For example, Emirates SkyCargo’s SkyChain system, an end-to-end cargo management system, is connected to the CargoWise platform.”
Toby Mills, Founder & CEO, Entopy tells us about a new aspect of technology. He says, “New ‘Data Mesh’ technology is starting to make inroads and unlock value from even the most challenging supply chains through the use of intelligent data orchestration.”
COUNTING OUR BLESSINGS
There are various ways in which digitization induces speed in the entire supply chain. New approaches to product distribution reduce delivery time. Predictive analysis is now done on a weekly basis – even daily for fast moving goods – as compared to earlier practice of generating half yearly/monthly reports. From the point of view of a freight forwarder, Satish Lakkaraju, Senior VP, Wiz Freight adds, “In today’s world, everything is required at a much quicker rate. When speaking about the freight forwarding industry, there are multiple external factors affecting the day-to-day operations.
While on one hand autonomous and smart vehicles lead to significant operating cost reduction in transportation & product handling, and at the same time they provide benefits regarding lead times and lower environmental costs. A study suggests that driven by transportation and warehousing, overall operating costs can be reduced by 30%. Rajesh Ramchandani, Senior Director – Sea (Indian Subcontinent), DSV says, “Given a completely integrated ecosystem, a rapid exchange of information boosts the agility & costs of the entire chain between the supply side covering areas of vendor managed inventory, visibility of inventory integrating with real time planning at production with end to end logistics visibility on the last mile to the customer side.
“The ability to process more cargo, faster and with the same staff levels is the other side of how digitalisation could help the operation make more money. As to savings, the areas that would get immediate benefit are where tasks are currently manual, and possibly being done twice because of disconnected systems, and which could be replaced by digital solutions.” adds Yuval Baruch, CEO, Hermes Logistics Technologies, highlighting that savings are only one side of the entire equation.
Digitization in supply chain management empowers your planning, sourcing, and logistics teams to collaborate, automate and effectively leverage analytics. It has also proven to drive growth, mitigate risk, and optimize costs by increasing organizational flexibility, enhancing decision making, accelerating innovation, increasing automation and facilitating higher visibility for end to end global value chains.
This is an abridged version of the cover story that was published in the July edition of the Logistics Insider magazine. To read the complete story, get your copy of the magazine.