Today’s rising unpredictable demand fluctuations, along with the increasing need to maintain an excellent user experience, have birthed a new concept called Elastic Logistics, the adoption of which has become vital for organizations to stay relevant in the “now economy”. Exploring this interesting concept that can help businesses shrink and scale as per demand, we at Logistics Insider through this feature, try and better understand it, touch upon the importance of leveraging elastic logistics in the modern supply chain.
A scalable, consumption- based, and ahead of the curve supply chain is the need of the hour; the industry echoed in unison, after a series of unprecedented events resulted in a new economy that caused consumer expectations to rise. With the availability of products just a touch away, impulsive buying is easier for tech-savvy shoppers – building pressure on supply chains to get products delivered quickly. While tech delivery giants like Amazon, Flipkart, etc. are facing the game by delivering products swiftly and with efficiency, it is the mid and smaller businesses who are overwhelmed with logistics and physical infrastructure challenges as they struggle to scale, network, and innovate as and when needed.
Pulling businesses from overwhelming challenges posed by the unprecedented situations is the ‘elastic’ approach to logistics, which is adaptable and flexible as per consumer needs.
Exploring the elastic approach
A business’ ability to shrink and expand its logistics operations and capabilities quickly to align with a supply chain’s fluctuations is termed Elastic Logistics. Working hand-in-hand with supply chain forecasting, elastic logistics creates an agile infrastructure that can reduce costs and improve efficiency based on the current need of the supply chain.
In an upcoming term in the logistics industry, a company normally leverages elastic logistics to run supply chains more effectively in the event of seasonal activity, uncertainty, and dynamic demand.
Anil Kumar Mishra, National Logistics Head (South Asia), Pladis Global, citing COVID-19 as a example when forecasting was not working and elastic logistics played a key role, said, “The model works well for various components of the supply chain, be it manufacturing, last mile or value-added services. It’s vital to guarantee that firms can increase or reduce capacity to meet continuously fluctuating needs in a world where toilet paper may run out overnight, fidget spinners can sell out in two weeks, and people suddenly quit buying single-use plastic water bottles.”
We live in a fast-paced, rapidly changing world, and businesses must be able to adapt and keep up, he added. Adapting to and keeping up with the fast changing world is a leading global food company, Danone that joined hands with BluJay to address the increasing consumer demand and complexity.
As customer demand grew, Danone needed a way to deliver products to supermarkets as quickly and efficiently as possible. This meant that the company had to track hundreds of loads daily, across their manufacturing plants and distribution centres, and liaise with numerous trucks from third-party carriers.
The company optimized its supply chain that allowed tracking systems to update both businesses and customers alike. Rather than focusing on lean practices, it looked towards flexible systems to expand and reduce capabilities, accommodating changes in demand within the supply chain.
Without elastic logistics, an organization is often required to operate at a less than efficient capacity, to provide for higher volumes of demand as needed.
The modern-day solution
Elastic Logistics is gaining popularity by the hour, especially after the pandemic. The new modern supply chains need to become elastic and require flexibility to manage fluctuations in consumer demand and disruption.
Mr Mishra, while highlighting the reasons behind the gaining popularity of elastic logistics in past few years says, “Elastic logistics aims to achieve a different type of rapid reaction. It enables you to manage all incoming and outgoing deliveries from a single dashboard, increasing your efficiency by eliminating the need to switch between several platforms. This makes it much easier to keep track of unforeseen expenditures and delivery processes, regardless of the shipment method.”
This is an abridged version of the original story that was published in the July edition of the Logistics Insider magazine. To read the complete article, click here.