Disruptive technologies reshaping the logistics industry

How has the supply chain and logistics industry responded to pandemic-related challenges?
The effect of the global pandemic led to the formation of a digitally connected market where the consumer was seated atop the supply chain. Stay-at-home orders and health concerns pushed people, even those avoiding the virtual world, towards online purchasing channels.

This drove retailers, e-commerce providers, logistics service providers and on-demand delivery providers to ensure rapid innovation, especially when it came to last-mile execution. To address this, businesses embraced smart logistics management tools to help them scale, ensure availability, provide delightful and safe deliveries, drive faster fulfillment operations, optimise costs and even identify new revenue streams.

Specifically, disruptive technologies such as artificial intelligence (AI), machine learning, automation, big data and predictive analytics and the internet of things became critical for logistics-powered businesses to ensure resiliency and navigate the ‘new normal’.

A critical development that occurred during the initial phase of the pandemic was the need to bring inventory closer to customers. Soon, businesses started converting physical stores with lesser footfalls into dark stores. It emerged as a vital aspect of on-demand deliveries. But this again triggered the need to revisit service-level agreements (SLAs) and rethink how to leverage logistics service providers to meet business objectives and customer expectations.

Why has quick commerce become key to e-commerce?
The emergence of the quick commerce (or q commerce) industry is taking customer expectations to a whole new level. While it started with consumers demanding groceries, food and medicines to be delivered in less than 45 minutes, the expectations are now are moving across retail and e-commerce. Hence, e-commerce and retailers will need to reimagine how they execute delivery operations.

Businesses will experience an urgent need to ensure high levels of customer transparency, make driver management processes highly efficient and intelligent and enhance real-time customer communications. Other areas that they will need to focus on are bringing inventory closer to customers by balancing physical and dark stores, driving real-time visibility of inventory and improving logistics service provider management to adhere to stringent SLAs.

How are AI and automation supporting the logistics industry?
AI and automation-powered smart logistics management platforms enable businesses to optimise delivery costs, improve resource utilisation, ensure fast and accurate decision-making and drive rapid scalability. AI-powered route planning tools can consider multiple factors while chalking out the most efficient and cost-effective delivery route, which otherwise is difficult for a human brain to analyse.

These factors include cost, fuel consumption, third-party logistics (3PL), performance, order volumes, delivery model and types, proximity from the store and more. This significantly reduces operational costs and boosts profitability per order.

Using a smart logistics management platform, businesses can reduce last-mile delivery costs by 14 per cent and increase deliveries per driver by more than 13 per cent. Also, these disruptive technologies enable companies and logistics service providers to further optimise costs and boost delivery productivity by intelligently planning routes to ensure multiple pickups and drops.

Businesses can significantly reduce investment in tedious and repetitive manual efforts by leveraging automation. It can enable them to automate core delivery operations like task allocation, scheduling, roster management, driver payouts, compliance, 3PL selection and more. Not just costs, automation empowers logistics-powered businesses to deliver efficiency at scale.

AI and automation-driven logistics management tools can reduce person-hours spent in shipment handling processes by 56 per cent. It curbs time invested in manual ERP data entry processes by 65 per cent and ensures 77 per cent reduction in steps needed to execute shipping operations.

Another critical area that automation influences is customer experience. By automating delivery operations, brands can automatically send out real-time notifications and alerts to customers on delivery progress and delays, if any. This fulfills a customer’s need for instant gratification and ensures delivery transparency. Advanced delivery management tools can improve customer experience by more than 28 per cent. Additionally, delivery flexibility is the key to raising customer satisfaction. Brands will leverage technology to allow customers to change the location or time of delivery as per their needs on the fly.

Returns are increasingly becoming a competitive sales point for businesses. According to Doodle, 68 per cent of consumers expect free returns. Just like ensuring cost-efficient last-mile operations, companies will need to embrace advanced logistics management tools to reduce investments in managing returns.

Tell us about green logistics and deliveries.
Faster order fulfillment is bound to influence trip volumes. As we move ahead, brands must leverage tools that minimise carbon footprint, especially now when environmentalism is rapidly going mainstream and regulations around carbon emissions are getting stricter. According to research conducted by IBM, 57 per cent of customers are willing to change their purchasing habits to reduce their carbon footprint. As much as 65 per cent of consumers in the Middle East – according to a PwC report – have become more eco-friendly during the pandemic.

So, it won’t be surprising to see customers buying into brands that focus on sustainability. To reduce carbon footprint and build sustainable supply chain operations, businesses must embrace smart logistics management tools. Such tools can help companies achieve sustainability goals by reducing miles travelled, increasing first attempt deliveries, eliminating empty miles, decreasing trip volumes, improving resource utilisation and curbing paper usage.