Logistics in the E-Commerce Era

The ever-changing e-commerce scene has resulted in major changes in the way logistics work. Certain processes that ensured success in the past years may not necessarily yield the same results today. Owing to the increasing demand from different e-commerce channels as well as new expectations from customers, businesses and logistics companies have started investing in advanced technologies and improved management systems. Implementation of new, advanced logistics and supply chain processes is the key to winning the game in this e-commerce era.

The pre e-commerce era merely involved transportation of goods from one place to another, without offering any order tracking option or transparency to customers. It was a simple process of suppliers passing on the raw materials to manufacturers, who further transported the products to customers via retailers/distributors. Contrary to the old supply chain system, the post e-commerce era has brought with it immense changes and an extraordinary fervour in the logistics sector. This has led to a change in the business landscape of the air express and parcel industry in that they are now focusing on Business-to-consumer (B2C)-related requirements in addition to the Business-to-business (B2B) system. Due to increased competitiveness in the industry, efficient logistics has become the need of the hour for every business. Transportation speed and parcel traceability have become the new standards in logistics today, which is why, only a business that is more customer-centric, transparent and fast can succeed well. Latest technologies like drones, advanced robotics, augmented reality and smart glasses (that help in hands-free picking, packing and shipping) aid in lowering costs, improving customer satisfaction and ensuring the business’ competitiveness. Companies will face the risk of losing customers and competitive advantage if they do not keep up with the latest logistics trends.

The rapid growth in the e-commerce market in turn demands the same kind of quick and innovative response from the logistics and transport business. The following 3 points come into picture in this regard:

  • Less Can Be More – Companies will be required to invest in predictive software on the basis of inventory sensing, done by tracking customer browsing data and their product interests. Doing so helps in streamlining and managing warehouse processes. Changes occurring from the implementation of software such as analytics, drones, AI and autonomous machines will reduce inefficiencies, enhance the order fulfilment speed and greatly accelerate productivity as well as effectiveness. Deep learning and analytics will help study customer browsing habits and purchase trends, and customise their experience, by recommending what they would like most. By working on the reorganisation of the fulfilment process, businesses can enhance their output, with higher efficiency and less labour.

 

  • Development in the Digital Front – Digital revolution and technology have brought about changes in almost every field, and organisations have no other option but to implement the digitisation of logistics. Customer expectations are increasing, and the competition is high. If customers want a global marketplace, companies will have to lower their fulfilment and shipment costs to stay in profit. Advanced inventory sensing, robotic warehouse ecosystems and autonomous delivery vehicles will enable quick delivery. The whole technological advancement will result in the usage of more agile solutions for warehouse management, purchasing and other operations in supply chain and logistics. Companies must analyse how the newer technologies/services will enhance their business and then carefully implement them, while working on improving their customer relationships, existing assets and partnerships.

 

  • Creating Sustainable Solutions – The supply chain today has become more circular and less linear. Suppliers have begun to find ways in which materials can be reused and reclaimed, so that the prices are in check; while simultaneously attracting people, who support/value brands that focus on ESG (environmental, social, and governance). Such changes will build resilience inside the supply chain, which will further help in creating much more reliable long-term value and growth for the business. It is also best for logistics and supply chain businesses to follow the strategy of agility in resource allocation. When you consider sectors that are geographically diverse, it shows that companies with flexibility in resource allocation stand a higher chance in seizing opportunities and securing market share. This smart strategy will help yield positive business impacts for a long term. Implementing the ERP (Enterprise Resource Planning) software is one of the best ways to transform and improve your supply chain strategy. Standardising this process and embracing new technologies will help in raising cost awareness, real time inventory management, learning customer preferences through purchase trends and increasing the overall efficiency.

The introduction of GST (Goods and Services Tax) and the soon-to-be-implemented e-way bill are also expected to impact logistics. With increase in number of compliances for the express industry and e-commerce operators, there are chances that the operational efficiency of the value chain as a whole will be impacted greatly.

With more and more companies adopting newer technologies to manage their warehouses and streamline the fulfilment process, it has become critical for businesses to stay shoulder to shoulder with the latest developments in the logistics industry. Companies will have to work on their customer acquisition expertise and ensure that their logistics as well as back office supply chains are up to date with the front office customer journey. This is the only way in which businesses can delight customers and stay competitive in the rapidly changing e-commerce market.

– Swathi Bhat

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