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Why Supply Chain Digitalisation Is the Need of the Hour The technological advancements being made in the logistics can cause further disruptions, which would push the efficiency of the sector

By Anjani Mandal

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The Indian Supply chain and logistics sector is one of the largest globally and is growing from $250 billion in FY2021 at a CAGR of 10.5 percent. However, the disruptions such as the pandemic and the Russia-Ukraine conflict have tested the resiliency of supply chains. Organizations are scrambling to maintain the flow of products, funds and information along the supply chain, and supply chain interruptions can no longer be considered isolated incidents.

The logistics industry operated entirely on paper not too long ago. Not only was it slow, but it also led to several errors. The Indian supply chain industry is moving on from the traditional processes and is looking forward to a tech-enabled logistics future.

Companies that were not too keen on investing in technology are now seeing the advantages and its necessity. The technological advancements being made in the logistics can cause further disruptions, which would push the efficiency of the sector. The logistics sector is undergoing a transformation and consolidation, organizing the highly fragmented industry. Resilience and agility are the need of the hour and companies are adopting digital technologies to remain competitive in the face of disruptions.

Collaborative execution: The future of supply chain digitalization

Ever since the pandemic hit the country, businesses have been facing unpredictable out-of-stock situations, stranded trucks, and a lack of visibility into their supply chains. The modern supply chain poses a host of new challenges for leaders to grapple with increasing costs, a slew of disruptions, and the complexities posed by new distribution and sales channels add to the complexity of managing operations efficiently. There is an urgent need for improved demand and distribution visibility, integrating new channels, and improving control over quality and speed of delivery in both the first and last miles of the supply chain.

The next stage of productivity improvement is expected to be delivered by the deployment of technologies to facilitate collaborative execution by integrating processes across the shipper and vendor organization to provide end-to-end visibility and get better control through the transaction execution. With a tech-enabled supply chain, organizations can better allocate critical resources and organizations have protocols and SoPs for their manufacturing facilities as well as field and office staff to continue operations to steer through the disruptions.

Revamping supply chains to bring down costs

Large organizations need to promote the move towards digitization as they realize the benefits of higher efficiencies and shorter cash cycles through quick information sharing and digital payments and on the other, the startups need to facilitate new business for small companies and the unorganized sector of the supply chain through cloud-based applications. This two-pronged approach will accelerate the speed of digitization and lay the foundation for collaborative-execution between all the stakeholders in the supply chain resulting in cost reduction.

The ready availability of data on each leg of the supply chain on inventory levels at each point of the distribution chain - on the product sales side as well as on the sourcing side - inventory on the move and its availability as well as off-take / consumption rate at the sales and consumption point makes it possible to optimize the entire chain while ensuring product availability matches up with off-take rate.

Tackling disruptions in the future

An offshoot of the disruptions, though, has been the increased awareness of the need for automation and digitalization in the logistics sector. These disruptions have on one side, affected the demand patterns due to the rapidly changing consumer preferences and on the other side, supply positions because of substantial reduction in the vendor pool of a largely unorganized Transportation sector.

Digitalization of the Supply Chain has shown it can reduce cost and idle inventories while ensuring better product availability and thereby resulting in higher revenue. The visibility on the sourcing as well as the distribution side facilitates a synchronization of production and inventory with consumption of the finished product by providing visibility of off-take rates at each leg of the chain.

The ideal supply chain digitalization strategy for SME's/MSME's

Considered to be the backbone of the Indian economy, MSMEs contribute a total of 30 per cent to the country's GDP. As the pandemic wreaked havoc on supply chains, logistics in MSMEs took a major hit. MSMEs are somewhat limited in their ability to digitise since the state-of-the-art enterprise products are out of their financial reach. But the adoption of cloud-based technologies and working with start-ups could be one way to overcome this problem.

Technology adoption is no longer an option for MSMEs as it is being demanded by the market. The companies who adopt technology quicker than their competitors will see newer and better opportunities opening within their market context.

Organizations are increasingly favouring technology-enabled organized players to entrust their transportation with. Through collaborative execution, organizations can get better control over their operations. An ecosystem platform helps them provide end to end visibility right from placing the order to executing and invoicing.

Anjani Mandal

CEO & Co-Founder, Fortigo Network Logistics Pvt Ltd


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