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KEY BUSINESS ASPECT REQUIREMENTS FOR DIGITAL ADOPTION Logistics when planning to adopt emerging technology innovations

Jan 3, 2022

In the face of growing awareness of digital services and products, the rise of tech adoption & digitalisation in the logistics and supply chain industry has witnessed slower growth. With the global pandemic, the traditional supply chain and logistics activities had to change. Today’s logistics & supply chain is not just about bringing in a product or a service but also about exceptional consumer experience. The article talks about some of the key business aspects that need to be understood to truly drive wide scale digital adoption across logistics, warehousing and supply chain networks. - Aditya Vazirani, CEO, Robinsons Global Logistics Solutions

Although tech adoption and emerging tech innovations have been the buzz words for industries and businesses during the COVID-19 pandemic, it is still a long way from becoming widely adopted across sectors, especially in India. While consumer facing sectors like BFSI, retail, hospitality and corporate workplace functions, like HR and operations, are ahead of the curve when adopting AI and emerging technologies, key sectors like logistics and warehousing continue to be slower in adopting these innovations. Even as modern supply chains embrace the latest drone delivery model – which is still in the very nascent stages and is still being tested for efficacy & business sustainability – the technology is yet to make itself palatable for the Indian logistics and supply chain sector, especially warehouse management.

Listed here are some of the key challenges that need to be understood to truly drive wide scale digital adoption across logistics, warehousing and supply chain networks:

  1. What is the initial investment?

    In the backdrop of a global pandemic, costs play a major role in the decision-making process, especially when it comes to technology enablement. More so, limited knowledge or incomplete information can be another challenge when making a decision to invest in tech adoption. Factors like agility of the solution, possibility of scaling up or scaling down certain operations, future maintenance and upgradation costs and other ancillary costs that will be incurred when actually setting up and using the technology on a day-to-day basis, need to all be considered and objectively mapped to the long-term growth plans of the company. What’s also important is to weigh in the current vs future need of the solution, urgency and the long-term goal/vision of the technology. Gaining detailed knowledge about the various aspects of a technology solution, in relation to the expected results, can help tremendously when adopting a long-term tech-enabled solution.

  2. What will be the Return on Investment?

    ROI is the most important aspect of any investment, and more so, in the case of innovative technology solutions, like AI and ML. Apart from being well-informed and aligning the short and long-term business goals with the investment, it is also important to calculate the value and ROI of tech adoption. while AI and ML solutions are designed for business process automation, data collection & smart analytics, understanding the exact value it adds to the balance sheets is vital. From reducing overhead costs, faster deliveries and happier customers to costs of regular training, upgradation and maintenance costs, technology limitations or lack of agility, etc, could all be important factors when considering the ROI.

  3. How much business efficiency this will drive:

    After the cost and ROI calculations, the next most important step is to assess the business impact and the overall value proposition of the AI-enabled solution. One can choose to create either a customised solution that fits perfectly well with the existing system or to embark on an overall digital transformation that can help create an agile and effective value chain. The core focus, in terms of decision making beyond the monetary value, needs to also be on driving business efficiencies, streamlining operations, ease of managing/execution and remarkable improvement in business KPIs.

  4. Will it add value to customers?

    Lastly, all of the above need to eventually also translate into positive customer experience and enhanced brand value. When analysing digital adoption across supply chain networks, particularly in case of warehousing & logistics, which caters to a varied set of clients, it is important to evaluate unique customer needs and ensure the overall technology enablement benefits the entire spectrum of clients, instead of just a select few. From requirements around temperature-controlled storage, real-time tracking and updates, pharma supply chains and other value added service requirements of manufacturing, pharma, F&B etc, technology enablement at various points in the supply chain needs to be relevant & wholesome, such that it drives customer satisfaction & delight, translating into long-term business growth & opportunities for expansion.

While technology adoption across sectors has been on a rise, particularly in the post-COVID era, the above factors can help logistics and supply chain service providers to evaluate, understand and objectively analyse the need & value of adopting an emerging tech solution that is best suited to a business’s goals and growth plans.

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  • Aditya Vazirani

    CEO

    Robinsons Global Logistics Solutions

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