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ROADBLOCKS FOR DIGITAL ADOPTION IN INDIAN LOGISTICS SECTOR How can digitisation revolutionise logistics in the manufacturing industry post-COVID-19?

Mar 30, 2022

Globally and in India, the logistics sector is experiencing an unparalleled transformation, driven by innovations in digitisation. And, of course, the COVID-19 pandemic has posed challenges for manufacturing logistics as well. The article elaborates on the roadblocks faced by the Indian logistics sector and how digital adoption is revolutionising & shaping it in the post-COVID times. - Lalit Das, Founder & CEO, 3SC Analytics

The logistics sector is an ever-evolving market. It is considered to be the backbone of the Indian economy. Being a highly consumer-driven and unorganised sector, the segment experienced various disruptions with the pandemic outbreak. However, it was prompt enough to recover and attempt at regaining its prominence.

The roadblocks faced by the Indian logistics sector

In the present times, the sector faces various challenges, the primary one being that the segment comprises various production stages. Hence, any inefficiency in one phase would impact the entire supply chain. The segment’s operations are also spread across geographies and resolving any disruption would be challenging. The increase in e-commerce and sudden consumer transition towards online shopping are added barriers for the segment. Furthermore, the lack of transparency and visibility in the supply chain models are other added hurdles. Rising freight costs, demand-supply gaps and delayed deliveries further added to the woes. Even though technology has forayed into the market, the pace of digital adoption has been slow. As a result, the sector faces disruptions and glitches across levels due to the lack of the required technical assistance.

The pandemic paving way for digitisation of the sector

What is indeed noteworthy is that the market was resilient in its approach and has been leaving no stone unturned to cope with the turbulent times as well as thrive. The silver lining is that the coronavirus stepped in to be a blessing in disguise for the sector. The market has been able to undergo transformations due to pandemic-induced digitisation.

The coronavirus brought about a major transition in the segment. The players eventually had to bid goodbye to the conventional working model. There was a fundamental shift from traditional practices and they embraced tech advancements. As a result, the segment has become all the more innovative, digitised and data-driven. Mordor Intelligence highlights this trend in its recent report and states that the traditional logistics industry is undergoing a transformation towards digitisation and adopting a contactless approach due to COVID-19.

Presently, digitisation is no longer an option but has emerged to be the dire need of the hour and this trend has been accelerated by the pandemic. However, it is anticipated that digitisation will emerge to be a game-changer for the industry and will pave the way for creating new paradigms for the visualisation & capitalisation of data. This will help the industry build a robust infrastructure in the times to come.

Digital adoption revolutionising the logistics sector

Ensuring supply chain visibility within the network (eg, producers, carriers, warehouse operators) and to the customers became the dire need of the hour. Hence, the sector was keen to embrace technological advancements. Industry players are gradually understanding and accepting the fact that in order to cope with the turbulent times and to enjoy a competitive edge in the market, digitisation is the ideal solution.

Technology has helped upscale the logistics sector significantly. It has not only carved the path for enhanced visibility in the entire supply chain model but also enabled better planning of production and sourcing of materials. Tech advancements have revolutionised operations so that businesses can cater to the rising and diversifying demands of consumers.

It is due to digitisation that the logistics sector has become data-driven. As a result, supply chain analytics has become an essential element of supply chain management. The players are now able to gather insight and extract value from large amounts of data associated with procurement, processing & distribution of goods and ensure smooth operations & quick deliveries.

Digitisation shaping the logistics sector in the post-COVID times

As we are inching towards the fourth industrial revolution, digitisation is not just a buzzword. It has become an essential element for the survival and growth of the market. Even in the post-COVID times, digital disruption will usher in the era of transformation in manufacturing and supply chain segments. Re-evaluating processes and implementing collaborative technologies will help minimise manual errors, boost efficiency as well as reduce trading costs. It will empower the market to be data-driven and leverage insights to improve operations and make informed decisions.

Digital adoption will further give an impetus to the resiliency of the segment and will help players revamp their business models. Tech deployment will also help resolve various challenges that the segment presently faces and eventually tread on the path of digital transformation in the truest sense. It is due to digitisation that India has an opportunity to foray into the global market and occupy a significant position.

The future roadmap

According to Expert Market Research’s report, the global logistics market size was valued at $9,252.1 billion last year. It further states that the market is projected to grow at a CAGR of 5.7% between 2022 and 2027 to hit $13,326.3 billion by 2027. The Asia Pacific region is by far the leading market, with India being an emerging region. The growth is primarily driven by significant growth in the online retail sector at the global level. The study further shares that tech advancements are playing a major role in stimulating the growth of the market. As far as the Indian market is concerned, the study by Mordor Intelligence states that the freight and logistics market is expected to grow at a CAGR of more than 5% from 2022 to 2027. The rapid growth of the e-commerce sector and surge in the online retail sales market are pushing the growth of the sector. The study goes on to point out that the Indian logistics market is evolving solely due to technological advancements. These statistics are indicative of the fact that the logistics sector both at the global and Indian level is witnessing growth due to digitisation.

A progressive future

It is indeed an undeniable fact that it is due to digital adoption that logistics has become integrated and is able to work with an end-to-end holistic model. Customers, e-commerce and even logistics firms want to track the lifecycle of products, right from their origin & transportation to their delivery at the customer’s doorstep. This is where technology has emerged to be a blessing in disguise and has helped in a seamless supply chain management. Tech advancements are further helping in resolving the challenges impacting the supply chain security, transparency and traceability. This is the reason why tech-based solutions have started gaining prominence in the logistics sector and have been playing a vital role in upscaling the market. It is expected that digital transformation is happening gradually and will continue to pick up pace in the times ahead as well. Owing to this digitisation, the future of the Indian logistics sector indeed seems progressive.

Image Gallery

  • Technology has helped upscale the logistics sector significantly. It has not only carved the
    path for enhanced visibility in the entire supply chain model but also enabled better planning of production and sourcing of materials.

  • It is an undeniable fact that it is due to digital adoption that logistics has become integrated and is able to work with an end-to-end holistic model

  • Lalit Das

    Founder & CEO

    3SC Analytics

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