How New-age Technologies Can Boost the Efficiency of Indian Supply Chains

For decades, the supply and logistics industry has formed the backbone of India’s economy. Even so, its dependence on other sectors, especially manufacturing, meant that it suffered huge losses during the pandemic. This also exposed a glaring need – to find and invest in the right technologies for better advancement and growth.

With several industries relying on new-age technologies to become more integrated in the global marketspace, India’s supply chain now has to be able to create better end-to-end visibility, better asset management, and overall find a way to become more efficient.

The logistics and supply chain contributes approximately 14.5% to India’s GDP but a largely fragmented structure and the lack of organization is still holding it back. The market is expected to grow to $380 billion by FY25, which is a CAGR of 10-12% but for this goal to be achieved, large scale changes need to be implemented.

In the sector, supply chain management is perhaps the most crucial part of the process, from the time the product leaves the factory floor to the moment it reaches the consumer or business it’s marked for. New-age technology like artificial intelligence (AI), Data Analytics, and the Internet-of-things (IoT) will help create a more robust system.

Even in situations like the pandemic, when manpower ceases to become the go-to solution for supply chain issues, technology that facilitates interconnectivity and helps with things like GPS tracking comes in handy.

For instance, IoT devices can collect and share sensor data which can then be analyzed. These devices and their functioning often require very minimal human intervention. If a cargo vehicle is compromised in any way, the presence of an IoT would help alert the manufacturers or the driver so that the issue can then be rectified.

This becomes even more important since India has a vast range of terrain and geographic territory so better tracking is the need of the hour. There is also the issue of multiple channels and middlemen – if the same data goes through multiple points of contact, the risk of losing data only becomes higher.

New-age technology like IoT and Data Analytics brings all the data under one metaphorical roof, giving everyone access to it through easily accessible dashboards. The country also requires a more cohesive structure in transportation to avoid loss of data or products and consequently avoid rising costs.

To better illustrate the point, the very introduction of technology like Radio Frequency Identification (RFID) or more simply put, tags and barcodes has improved the supply chain. It has enhanced inventory control and equipment tracking, thus increasing the accuracy of goods and their delivery. There have been fewer customer chargebacks and lesser stock outages.

Another phenomenon that deeply affects the supply chain is the rise of e-commerce. With several e-commerce platforms promising high supply and faster deliveries, the supply chain system in India has to adapt to the growing industry.

With the existence of e-commerce marketplaces (both from multinational corporations like Amazon and small businesses like those operating on social media) and traditional brick-and-mortar stores, the pressure on the supply chain industry to become more efficient increases.

It is not enough to only keep track of goods that are coming in and leaving the shipment floor – one needs to ensure that all the inventory is properly tracked and there is never a large or prolonged shortage in high-demand goods.

Shifting these operations online using new-age technology seems to be the most viable solution.

While the IoT is making its way to different sectors, there has been talk about blockchain technology being combined with IoT for even greater returns. For instance, when a consumer checks a product to see if it meets their requirements, they are placing their trust on the manufacturers, the vendors, and so on.

With blockchain technology entering the supply chain sphere, the data collection and entry will become more streamlined and more accurate. Supply chain companies can then document every update in production using a single shared leger which provides complete transparency and data visibility to all concerned parties.

This combination of blockchain and IoT will lead to better tracking, more efficient transportation, a lower chance of counterfeit products making it to consumers, and greater quality control. India’s existing supply chain industry has huge potential for growth and must harness new-age technology and embrace the need for digital transformation to actually realize that potential. A forward-thinking approach is crucial for India and companies opting to integrate technology into their supply chain are leading the charge.

This article has been authored by Rajesh Kapase, CEO, Trackon Logistics. All views are personal.

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