The pandemic drove the logistics sector to embrace digitisation

The quest for cost-cutting by optimising processes and increasing efficiencies is not exactly new. What are the factors that are helping further optimisation now?
The most significant factor is the ever-increasing customer expectations. The new-age customer is highly demanding while their patience is short-lived. You have to meet their expectations to be successful in a cost-effective way to ensure profitability. Amazon has shown the world how deploying trailblazing technologies such as robotics, ML, etc., can help them improve efficiencies and scale operations worldwide to meet one-hour/same-day deliveries. They are rapidly outperforming, setting new industry benchmarks. The volume of orders they handle makes the use of advanced technologies inevitable. To reap similar benefits, others must follow suit, which humans cannot accomplish alone.

The new challenge is how to balance customer experience and operational costs. We can tackle this by deploying new-age technologies that can help improve operational efficiencies and optimise processes. According to a survey, over 40% of the workers spend at least a quarter of their workweek on repetitive tasks. Technologies such as automation and Machine Learning curb this by taking up redundant tasks saving critical productive hours for resources. Route planning and optimisation solutions can also facilitate faster and profitable deliveries. It can figure out efficient routes to save time and money spent on travel and helps to utilise available resources (drivers or vehicles) at their full potential and capacity, amongst other benefits. It quickly does all the permutation and combination to assign the resource best-suited to accomplish the job automatically. Data and analytics can help unearth new revenue opportunities, understand customer behaviour, formulate strategies accordingly, etc.

Logistics was one of the badly affected sectors when the pandemic hit the world in early 2020. How did the sector weather that storm?
The pandemic drove the logistics sector to embrace digitisation, innovate and find new avenues to deliver on growing customer expectations. AI-powered logistics management platforms were able to eliminate the backlogs in order fulfilment via automation. Route planning and optimisation helped logistics companies to automate their routing process by choosing the best resources for the task and avoiding red zones for faster and hassle-free deliveries.

Digitisation enabled the CEP industry to make order handling and last-mile processes transparent, reduce human intervention, helped in rapid scalability of operations leveraging cloud infrastructure, and significantly boost customer experience. Easy integrations allowed the industry to manage 3PL for handling heavy orders and serving in remote locations, which may have been unserviceable for some players.

Moreover, the Covid outbreak called for multiple adjustments vis-a-vis delivery flexibility. As the world turned to online modes to meet their essential and non-essential needs, it created the urge to introduce more features to ensure safety and hygiene during order handling. Real-time tracking links showing ETA sent to customers via different modes and geo-tracking brought visibility to the process and increased first attempt delivery success. Well-informed, accurate, and timely deliveries reduce the chances of returns due to the customer’s unavailability. En route order clubbing also came in handy for that purpose. One could also reconfirm the reasons behind a failed delivery with customers. Online payment integration and electronic proof of deliveries ensured contactless deliveries in the wake of the Covid. Later, the logistics sector became the lifeblood in facilitating the distribution of Covid-critical supplies and helping countries combat the contagion globally.

What are the lessons from the pandemic, and how can supply chains be made more resilient?
The pandemic taught us multiple lessons. Let’s go over some of them.

Take a proactive approach: A survey found the pandemic disrupted 78% of supply chains. It is because companies relied on traditional/manual processes and had a reactive approach that does not work in a constantly changing environment. This means that a service provider responds to customer requests on a piecemeal basis. The need of the hour is a proactive supply chain that focuses on strategic logistics rather than a transactional one. Establishing a collaborative relationship means continuous engagement with service providers to uncover innovative methods to improve processes. Having seamless collaboration with external service partners is also essential to ensure better preparedness and resilience for the future.

Bring inventory closer to the customer: Dark stores are proving to be a game-changer in this regard for the FMCG sector. It fares better when compared to the omnichannel approach in terms of cost optimisation and offers the best of both worlds.

Digitisation is a must: One thing is for sure. The more flexible you are, the easier it is to pivot. The answer lies in digitisation and the adoption of new-age technologies. A Gartner survey says, only 21% of organisations currently have a resilient network, translating to good visibility and the agility of sourcing, manufacturing, and distributing quickly. At the same time, it’s important to break down the silos and implement highly available and scalable solutions that communicate to show a clear picture of the events. There are multiple benefits of digitisation, which include collecting data and getting access to actionable insights. Digitisation reduces human intervention wherever possible and automates tasks to reduce biases and errors. The biggest strength is that it brings transparency to the processes, which has been missing from the supply chain largely.

Hyperlocal is a global trend: With stay-at-home restrictions, getting medicines, groceries and food delivered at the doorstep became critical. Result?

Growing demand for hyperlocal deliveries. Other reasons for the growing popularity of hyperlocal models include superfast order fulfilment, low delivery costs, customisable delivery time slots, and more.

Logistics is decisive: Logistics is increasingly becoming the only physical touchpoint that can bridge the brand-customer gap. It is a significant link in boosting customer experience.

The ability to scale deliveries is critical: Deliveries are more important than ever. Online orders hit the roof after the pandemic struck. Old, legacy systems alone cannot deliver on skyrocketing online delivery volumes. SaaS infrastructure is a must-have to develop agile and scalable logistics operations. Smart logistics management tools give the flexibility to quickly onboard freelance/ad-hoc drivers to accommodate sudden spikes in demand.

Growing need to focus on transportation risks: As cross-border trade began, multiple shipments fell prey to the port disruptions. These shipments also included Covid-critical goods. The absence of real-time visibility on cargo movement and operations insights made navigating the challenges complicated.

Environmental sustainability: According to a report by Orange Business Services, as much as 85% of enterprises believe sustainability and cost-saving are linked to each other. Further, in order to save costs, more than 75% of respondents see sustainability as a fuel for product and service innovation to drive customer preferences and business growth.

What kind of savings can a company expect by opting for the Shipsy platform?
Our smart logistics management platform performs exceedingly well for different industries extends two types of savings — business savings and operational efficiency. Let’s take the Retail industry, for instance. Leveraging our platform, the companies have seen a 4% reduction in shipment returns, 11% reduction in last-mile delivery costs, which translates into business savings. 100% reduction in 3PL invoicing errors, 28% increase in on-time dispatch, 12% reduction in order to ship time, etc., bring about operational efficiency. The benefits of using our platform are multi-faceted.

What differentiates Shipsy from other logistics management platforms available so far?
Our biggest differentiator is the value realised after deploying our solutions. Another is the platform itself. We optimise global trade and handle hyperlocal deliveries with equal ease. Moreover, we are not vendors but partners to our customers in their digital transformation and growth journey. Our role doesn’t end once we sell our product; it begins instead. We are deeply involved in their operations and enhancing our technology capabilities to help customers achieve their goals.

We are a highly customisable platform that integrates easily with other systems to ensure better operability and transparency. We also have one of the industry’s best go-live times, that is less than 45-days, and provide use case-specific modules to help customers address their immediate challenges first.

How has been the experience of nurturing a startup, and where do you see Shipsy in the next five years in this domain?
Being the co-founder, I’d say Shipsy is an extension of myself. The journey has been thoroughly exciting. Each day comes with a fresh opportunity to look at things from a different perspective, connect the dots between challenges and causes, and extend resolutions.

Shipsy is on a mission to become the most preferred supply chain and logistics management platform globally. We are working towards integrating technologies such as blockchain, drones, automated vehicles and more with our platform. We look forward to further reducing logistics’ impact on the environment by making eco-friendly deliveries a reality.

Soham Chokshi is the Co-Founder and CEO at Shipsy, building a connected platform to make global trade more efficient. After graduating from IIT Madras and working at Deutsche Bank, Soham started off Shipsy in mid-2015. Soham is leading the brand by helping the largest of companies answer the question “How can you reduce logistics costs” and “What can you do to improve customer retention through a better delivery experience”. Growing team of 100+ with offices in Gurgaon and Mumbai, always looking to onboard talented individuals to grow with us in this journey.