Indians must have thought once, in abroad domestic passenger air tickets are less costly, what would be the reason?

Well Indian aviation policy 2016 also recognized that domestic and international air freight or air cargo and express logistics would be helpful to reduce or subsidize the passenger air fare.

Following are the few facts of Huge Upcoming Air Cargo Scopes :

• Air cargo, particularly domestic has a high employment potential, especially for semi-skilled workers.
• Air cargo ecosystem, Express Delivery Services is becoming pivotal especially in the light of double digit growth in e-commerce.
• E-commerce companies are expected to invest close to $6-8 billion in logistics.
• The e-commerce sector has been witnessing consolidation, which in turn would open up opportunities for the express market.
• Around 10 per cent of the shipments carried by some of the express companies are B to C shipments. There are also companies who works only in carrying B to C shipments.
• Introduction of a product with cost and transit times between current air and surface products.
• Induction of multiple aircraft’s with 100 per cent capacity utilization, streamlining the last mile costs to B2C benchmark levels.
• The consolidation in the e-commerce sector and with internet penetration expected to nearly double in the next four years.

Innovations are very important in this sector, as the demand is always for more reach and faster shipping at lower costs. The companies will need to invest in automation, while utilizing existing resources well.

Some of the new initiatives should be taken by air express operators :

Currently, air cargo volumes in India are very low as compared to other leading countries due to high charges and high turnaround time.

• Parcel lockers
• On-the-Move (OTMs)
• Handheld devices
• Mobile point of sales (MPOS) solution
• Cash on Delivery (COD)
• Reverse logistics with various value-adds such as ‘open’ and ‘cash return’
• Preferred time of delivery
• Provision of track and trace
• Easy surface connectivity to the air-ports
• World-class cargo transit hubs

Presently, there is a very low level of air cargo penetration characterized by only a few airports equipped to handle large volumes of express delivery parcels. As the e-commerce gathers momentum and moves to the several less populated cities like tier 2 and tier 3, there will be increasing demand of expanding air cargo connectivity to smaller towns. The industry would invest in about $8 billion by 2025.

India set a benchmark in providing the lower cost services irrespective of any specific field still India has higher logistics cost due to various issues and challenges faced by the industry. India is involved in complex tax structure, the industry is also affected by poor rate of customs efficiency of clearance processes and procedures thus affecting the international export logistics stratum. however, insignificant comfort provided by the existing Indian infrastructure combined with lack of implementation of efficient IT-enabled tracking and tracing operation has saturated the efficiency of logistics and transportation.

The proposed goods and services tax (GST) will help companies reduce logistics cost by 1.5 to 2.5% as they reconfigure their supply chains and bring in three key structural changes to the logistics industry. First, as India becomes one big market, there will be fewer and larger warehouses. Second, it will lead to a larger number of bigger trucks on road as there is greater adoption of the hub-and-spoke model. Third, these changes will lead to greater economies of scale for transport operators and lead to more companies outsourcing their logistics operations.

Eliminating delays at check posts will yield an additional savings of 0.4-0.8% of sales. These cost savings are, however, more likely to be gradual and back ended, as corporate will have to realign their supply chain while ensuring minimum business disruption, it added. The impact of GST in logistics is going to be dramatic and revolutionary.

Interstate tax burden Currently, each of India’s 29 states taxes goods that move across their borders at different rates apart from that Corporate state tax of 2% is imposed for inter-state goods transfer. Not applicable. Uniform taxation and no varying tax structures would be allowed across states.

Currently, there are around 20-30 warehouses per company, one in every state, in addition to this 20-30 Carry & Forwarding agent per state making the supply chain longer and inefficient. GST tax will be imposed on transportation of goods and full credit will be available on interstate transactions.

Logistic costs are expected to be decreased by 1.5- 2.00% of sales on account of optimization of warehouses leading to lower inventory costs which are set up across states to avoid paying 2% corporate sales tax and phasing out of interstate sales tax. There is immense scope for optimization of costs.

How technology will play its role :

The planned GST system seeks to replace multiple taxes and tariffs for a single tax at the point of sale. GST will unleash a new era of developing logistics infrastructure and take investments to the next level. The regulatory reforms proposed in the GST presents an opportunity to re-engineer logistics and transportation networks. Current inefficient and longer supply chains with warehouses in almost every state will now change based on delivery and cost efficiency. GST, when implemented, will free the decisions on warehousing and distribution from tax considerations and here the technology will play its role in the following cases –

• East tracking of consignments.
• Managing complete Hub and spoke model.
• Centralized accounting.
• Outsource the logistics operations.

This will result in more efficient cross-state transportation with improvement in transit time. Reformation of paperwork for road transporters Cost efficiency to optimum use of assets. This will lead to changes in Logistics Network Redefinition. Logistics service providers to rethink their business operations.

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Omni literally means ‘all’ which would be told other way multiple. Multiple-channel logistics is highly related with the retailing. Its an experience of shopping focusing on customer’s comfort including analysis before purchase.

Traditional distribution process and line-up which were built around consumers of earlier time, people who used to shop almost exclusively at store and shopping malls and for them online delivery in 3-4 days would have been expected but new age shopping experience is being changed. People who will shop more online especially on mobile-phone and expect same day delivery or click and collect within an hour.

Below factors of supply chain, which can full-fill the promise of omni-channel logistics model profitably.

• Online ordering and in-store pickup
• Product availability in stores for online order fulfillment
• Integration of low-cost, last-mile delivery options
• Inventory positioning
• Retail store as a warehouse
• Returns processing
• Short-term inventory re balancing

1. Omni-channel logistics :

The Omni-channel consumer wants to use all channels simultaneously and retailers using an Omni-channel approach must track customer behavior across all these channels. In the Omni-channel retail model, customers demand a seamless shopping experience where they can order-from-anywhere, requiring retailers to adopt a ‘fulfill from-anywhere’ model.

2. Impact on Distribution :

But integrating the various points of purchase is only half the battle. To successfully execute omni-channel marketing, retailers need to integrate their distribution methods as well. With more consumers expecting a seamless experience, retail success today requires one system for offering online order processing and delivering customer orders, online pick-up location as well as tracking buying patterns.

In e-commerce-oriented distribution centers, products are picked from warehouse shelves at the direction of distribution workers. Those workers may also determine the best size of the box for shipping a multiple-item order and which packing materials are needed. If the customer has ordered gift-wrapping, distribution workers handle that, too.

Combining the two types of distribution strategies into one requires a new type of product and not only in terms of size.

The real core—and challenge—of Omni-channel is about the fulfilment. What happens behinds the scenes, the consequences of decisions and precision (or not) in execution become delightfully or painfully aware to the customer.

The end consumer is changing, too. Today, they are more interested in understanding the game of supply chain. They want fulfilment their way. They want to understand the source market—where it was made, the labour and other practices of the manufacturer, and so on.

3. Fulfillment/Logistics :

Shop online, pickup in store (click-and-collect)—  If the customer chooses pickup in store, that might be coming from the retailer’s own stock. But what if that is being shipped by the supplier? What if then the customer decides they don’t want the product? If it is not a standard stock item in the store, who owns that product now—the retailer or the supplier? Is this now a return and shipped back to the supplier? One system logistics technology can resolve everything in one click.

Customize and deliver—Consumers often visit a store to configure or design their personal version of a product. The level of these orders coming through e-commerce channels has significantly increased. Although the retailer may be the sales channel, the question becomes who executes the logistics and services associated with the order. This exposes a fundamental question of the supplier/retailer relationship and their traditional roles. Technology has been shaped in a mobile-device now to build such relationship between supplier and retailer. 

More frequent orders—Suppliers may have to ship from warehouse to the store more frequently and and frequent orders may be small in amount. Thus suppliers may need more stock in ‘sales ready’ inventory. This may change their pick/pack/shipping operations or warehouse design to support consumer-oriented orders. This sort of inventory projection, accounting should be automated and technological help is the best way to figure it out.

Then there’s a huge opportunity for having a much broader selection Omni-channel, speed of delivery, selection, those are the opportunities today. And unfortunately, retailers need to work on several of those. They can’t just do one of those well because there are different perspectives and they need to make sure they really do well on all of those.

CIO-review-magazine-2015-top-promising-company.

CIO- presented-June 2016 – focusing on Logistics & Transportation Technology.

Reference : http://goo.gl/3sI0k3 page no. 19

Logistics operations are finding way to get streamlined and drawing a path of giving advance service, mobility solutions which count on wireless devices has turned to be eventuated towards success in logistics business however all the mobile applications based on cloud at its best to provide the real time information.

But many logistics companies who are still expecting a solution which can be affordable with advance technical facilities. The truth is logistics companies whether it’s a courier based or transportation or any cargo, for competition they fail to see the profit at initial stage of business which pulls down the interest towards business and they find traditional system left for them to retain their existing business. Logistics business is more of partnering rather than providing services alone to cater wide area and their business partners who either don’t communicate appropriately or incompatible to meet the demands results lose opportunities.

Over last few years, technological approach has been drastically changed, last decade back logistics used to be a service of minimum 6-7 days domestically which has been phenomenally reduced to a single day. Realizing real-time supply chain management and shipment visibility which was a part of dream. Let’s take a look at the trends of developing logistics subsequently.

1. Mobility solution is advancing rapidly :

Real time visibility is primary factor in Logistics business, second comes cost of service if any company has a control on these factors then that company will commit success for sure. Mobility solution has made it possible. New day’s technology improvised the solution module into a shape of mobile phone which has become more efficient in terms of mobility. When mobile devices are enabled with GPS system and camera integrated, service frequency becomes much faster and safe.

According to survey, after implementing mobility solutions company’s security has been improved by using handle held devices such as capturing information, allocating pick up, dispatching, delivering, bar code scanning from anywhere, shipment and fleet tracking, online reporting and route optimization.

Today the proposition is very affordable. Reason defines device cost has come down across the globe where supply chain mobility has placed. Achievements in mobility solution integrated with logixERP is taking place in the supply chain right now which allow track back to demanding and hyper-informed customers.

2. Cloud enterprise resource planning system :

Cloud was considered to be a marketing hype and not much of companies were interested in it. However, lately companies have started realizing the benefits that cloud products will bring to them. Cloud based logixERP offer benefits like Cost Advantage, Visibility into Cash Outflow, Quick Turnaround, Internal IT Operations Effectiveness etc.

Cloud products are giving company competitive advantages with their capability to analyse large data, communicate with multiple systems. As per the Study conducted by IBM. Companies adopting cloud products reporting nearly double the revenues and profit growth of those that are more cautious about using cloud.

Cloud promise a lot of innovation to Logistics industry. The Biggest advantage cloud products brings to logistics is “Connectivity”. Cloud solutions could bring full Supply-Chain to a single platform and easily take-away the chaos; manual intervention of multi-vendor/multi-department coordination. With Cloud the benefits are substantial. Cloud technology can enable better networking throughout an organization, as well as across supply chains. It can provide a higher level of connectivity and visibility – essential qualities for complex global operations.

3. Internet of things Associated with Logistics :

IOT in supply chain is a revolutionary innovation which is going to enhance productivity by gathering every object associated with supply chain including process, data, devices, sensors, people. Intellectual level of working will arrive through many ways when it takes place in SCM. It starts working from one end to another. IOT integration with LogixERP allows to automate the process and enhance visibility starting from warehouse to end user.

This changing scenario has been applied to enrich data and depth of intelligence, IOT helps in many ways such as :

• Control in asset loss. Identify product issues and develop a solution.
• Save fuel costs. Optimize fleet routes.
• Ensure temperature stability.
• Warehouse management. Monitor inventory to reduce out-of-stock situations.
• Gain user insight. Embedded sensors provide visibility into customer behavior and product usage.
• Training and development.

4. Augmented reality applied in SCM :

AR is technology that alters what the wearer sees in his/her reality by integrating with logixERP. Wearable AR technology has seen slower development and adoption. In the future, we will be seeing more of this technology in the workplace – with many AR commercial solutions already in development.

Let’s discuss how companies can apply augmented reality in supply chain. Here are some examples :

Order Picking : Traditionally, pickers receive a list of stuffs they are supposed to pick for an order by using an RF unit display or paper-based task list. With AR, the employee can keep his/her hands free to pick items also, as each item is picked, the technology verifies the correct product using bar codes scanner, and instructs the employee to the next most logical item to be picked. The employee can move faster, more efficiently and with greater accuracy.

Equipment Repair : AR can enhance employee knowledge and skills. If an employee needs additional guidance with repairs and the problem is beyond their capability, a more experienced person is called to come and do the job or train the individual to repair the equipment.

Safety & Quality : For quality control, a supervisor can see when an employee is fatigued and may not be accurately pulling defective material. Observations can be performed remotely to better analyse, document and improve processes without having to follow the employee, which may prove difficult in some environments. An employee could transmit video to their supervisor if they encounter difficulty so the supervisor could instantly see what the employee sees. Finally, it could be used as a monitoring system to drive employee accountability and identify opportunities for training and improvement.

Logistics process is typical yet can’t be ignored to have a concern of economic growth, if there is no logistics in the market business will get stuck. Essential elements towards country’s revenue generation will be stopped if transportation process cannot take place appropriately. Consumer goods and domestic trading cannot be a reason for provision of better life. Importing the goods and globalization should be inexpensive for people to access.

Logistics is likely to become an emerging industry in Africa having huge remunerative opportunities for Supply chain service providers across substantial infrastructure problems in the countries. Kenya and Nigeria’s logistics market is inclining towards high growth for reasons like high local trading, expansion and diversification of international demands by domestic consumers.

Nowadays logistics market with multiple players has become much competitive and it is no longer facilitated to buy the right goods at the right cost. Retailers must also get them to the right place at the right cost, in the right amount with the right operational costs. Doing this it necessarily requires an understanding of logistics and cost reducing IT solution that will allow you to deliver the goods to your customers most cost effectively.

For the first time report regarding Nigerian supply chain and specific data accumulation of logistics and transportation has been released in early 2016. Report contains target areas, economic performance of the logistics services, competition within logistics industry, logistics and supply chain volume and growth in domestic and international market. Report stated about identification of gaps for the improvement of logistics infrastructure and in this regards, the efficiency of the clearance process, time estimation of transshipment, freight cost.

1. Why struggling to incipient better supply chain system?

These high costs create significant impact on the people living in the region. The World Bank estimates that logistics cost account for 40% of consumer prices in East Africa that is figuratively 250 million people, many of whom are already living in severe poverty, who are paying more for food, household goods and healthcare products. Added to this are the large numbers of small business owners unable to grow their companies because of the high overheads connected with distributing or sourcing their goods.

Any companies based on services or products, transportation is necessary to expand but in these countries transportation has become biggest restrain towards the growth of business. Business can not expand because of no technical resources and high operational cost which results no internal growth in the country. Time is the biggest factor in transportation and logistics, giving less taking time service raise the demand of the service, its not like there is no demand from the side of country’s citizens. In an average it takes more than 6 hours to travel 100 KMs. E-commerce business has been emerging indubitably but only in urban areas increasing e-commerce demand has shown where as 46% country’s population is still reside in rural areas.

The biggest challenge of an average Supply Chain manager in Nigeria is the absence of data to work with. This had created a situation where they are left to the mercy of circumstances. Logistics is more about numbers than stories which makes data the king that makes it possible for managers to take good decisions. Data driven logistic systems bring several unique benefits for companies supply chain process as it enables organizations to fully understand their supply chain thoroughly and stay ahead of their competitors.

Eg: If any delivery is to be done across 5 KMs then transporters charge premium cost from the customers. E-commerce business also limited for specific regions, now if someone orders something worth of 5$ then delivery charge comes along with extra 4-5 $ thus it takes away the interest of people towards e-commerce business or any other transportation which results no trading and revenue. Transport companies can not assign delivery person to distribute goods for wide area because of less resources available and poor infrastructure.

2. Progress of rising opportunities :

East Africa is one of the fastest growing regions in the world. Some estimate that there is up to $68 billion of projects under construction in the region, ranging from civil engineering and infrastructure to resource development.

A new pilot program clears much of the red tape for companies bringing cargo in through the Port of Mombasa in Kenya. The port can now clear incoming cargo seven days in advance. The new program was created to increase efficiency at the port, and to support integration of the East Africa Community initiative, which aims to reduce cost and transit times for freight, and promote trade in the region.

Manufacturers should benefit the most from the program because they can clear their raw materials in advance, and haul them off immediately once they arrive at the port. Even if cargo isn’t picked up right away, the program awards domestic cargo four free storage days, and transit cargo nine free days.

The market is open for first movers who can navigate risk and nurture African talent. The opportunity is for those seeking to build long-term, sustainable businesses that bring world-class practices and adapt to local conditions. Africa’s requirement for logistics services and supply chain expertise is huge and growing every day.

A particularly surprising statistic is that Kenya is the third-largest emerging market air export trade lane by tonnage, exceeding not just its continental competitors such as South Africa and Nigeria.

With increasing scopes countries should bring up new technological resources and improve infrastructure which should include improved route mapping, warehouse management, fleet management including tyre management, vehicle tracking, fuel management, documentation and auditing, monitor shipment movement, live tracking, digital signatory receiving and confirmation, accounting, client care, on field delivery person automation.

Ex: South Africa has been ahead of Kenya and Nigeria in logistics industry because of implementing new generation technological solution and maintain a good infrastructure which help them to provide cost effective services.

Summary :

Kenya is among the top-four countries in Africa with the biggest economic growth promise over the next five years, a new survey of global logistics executives shows. The highest growth will be seen in Nigeria, Kenya, Morocco, and Uganda followed by south Africa. Among all African countries largest and most breakthrough in logistics market at worth of 3 billion $, will reach compound growth annually at a rate of more than 4 percent.

Logistics solution to be called green for the prospective approaches towards increasing energy efficiency, productivity, safety society in terms of transportation or distribution of goods with lesser operational cost. More precisely attention held on to the process optimization by implementing technology begin from packaging, inventory, transshipment, warehousing, delivery of goods.

How many logistics service providers think about preparing an Eco-friendly environment of providing services that is undefined but they are yet to completely develop a proper green logistics work flow through which reduce cost of freight, fast delivery and client satisfaction would have maintained.

Despite spreading awareness about the environment friendly logistics services companies strive to maintain such work flow for competition and fast pace of business. While demand raises and business begin growing only thing need to necessarily meet is effective service, now issues turn up to follow the usual procedure to set up Eco-friendly environment when companies try to reduce environmental impacts in terms of its transportation’s infrastructure, modes, and traffic flows. Let’s discuss points of implementing strategies with an objective to reduce cost and improve service.

An unresolved issue seems to be reliability, if companies are likely to go for Eco-friendly transportation mode which would be least reliable in terms of providing last mile delivery services, lack of damages and safety.

Timing is a primary point of every logistics system, service count on time and reducing time and improving services having such environmental factors is a real challenge. Recently money for service value has been acknowledged and encouraged in mostly urban areas such as door-to-door services and just-in-time services are preferably implemented in the market which in return lead to an increase in environmental impacts. These sort of demands require heavy vehicle transportation or air transportation which burn fuel results pollution and high cost.

Logistics companies are putting effort to reduce cost by reducing inventories where warehouse charges and maintenance can be curbed. However, this strategy also yields more transit inventories and more use of vehicles on road, thus producing more pollution, traffic congestion, transition cost.

In courier/e-com company’s delivery boy transits by motor cycles generally to deliver multiple packages at different destination in minimal time now the challenges or risks that delivery person faces while delivery are invalid address, in availability, traffic congestion, shipment allocation, return goods or commodity exchange.

Companies are looking forward to come across challenges having breakthrough different strategies after every interval, Strategy implementations should commence at the origin point of transportation and through the entire transhipment process should be considered till delivery to the receiver.

Example: Now if companies hire third party suppliers for regional delivery and to reduce cost where suppliers will procure and load goods in the truck for delivery, here another issue raise that neither sender can co-ordinate to track live movement of the packages, trace about loss or damages of the packages nor receiver can get the status of expected delivery.

Distance to be covered shortly and for express delivery air transportation is requisite and now when co-loaders load goods in the bags or packages they load up as per locations but while doing that there is no trace of individual packages and even they also can’t provide any figurative data about that now if if a manufacturer dispatch multiple packages and receiver claim loss of goods then no body among them would figure out because there are no implications on the performance of co-loaders.

How the strategic implementation would give a fruitful result?

• Efficient packing with IC tag solution through movement of every packages can be monitored.
• Route optimization to alert about traffic congestion, mapping, automatic allocations and navigate an easy reach.
• Infographic demonstration and space estimation using technology and record of current and past inventory.
• Bar code scanning and record information of packages according to individual loaded or to be loaded vehicle.
• Tyre management, fuel rate management, tracking of vehicle and drive tracing for better fleet management.
• Mobility solution for delivery person and other field boys to co-ordinate, execute and update status from anywhere.
• Monitor physical item velocity within a warehouse and suggest optimal pick and put-away locations. ensuring incidents and replenishment are correctly and quickly resolved.

As mentioned earlier, maintaining green logistics can yield lower environmental impacts but it will require a substantial amount of research, planning. There are number of challenges which will appear and can affect service performance and logistics costs while implementing. However, a reduction in environmental impacts is beneficial to all consumers and green logistics should be at the basic level of developing logistics business.

The economy which has be-come more information rigorous, global, techno- logically sensitive is going through remarkable changes. Manufacturing in India is expected to grow at a healthy CAGR of 9.5 percent. But presently, India loses $65 billion every year due to losses incurred by supply chain systems. This is where the need for a reliable and quality logistics solution lies, Headquartered in Gurgaon, Haryana, LogixGRID has been bring-ing in the might of cloud computing and the mobility of mobile platform to the supply chain industry using its innovative solutions. With prime focus in real time results, connectivity and visibility, LogixGRID is setting a bench-mark.

LogixGRID comprises of individuals having exceptional insight into the logistics industry. It includes people who have earned their decade plus experiences from companies like Google, Cisco and Juniper. Putting together the combined experiences in various fields, the company provides cutting-edge ERP and mobility solutions to its clients. LogixERP is India’s first Cloud based logistics ERP which is a turnkey pro-solution designed keeping in mind the logistics requirement of road, rail and air logistics irrespective of the platform. Field employees can easily access the necessary shipment data since LogixERP comes with number of mobile applications. The mobile application runs on Mobile & Rugged hand-held devices.

When it comes to retail sales activities, the product, ClobzSales, provides sales force automation system that enables companies to track their sales representative’s (SR) daily activities. It takes care of complete end-to-end order management and prevents customers from getting into any kind of confusion.

To handle the second big concern of the clients, that is, field activity monitoring, LogixGRID has launched the product Orion. Orion is designed to empower manufacturers and distributors to manage sale and distribution. To be precise, Orion brings Big-Data Analytics to field jobs (Pickup, Delivery, Service, Payment Collection, Invoicing) that allows organizations to optimize field operations in such a way that they can better utilize equipment, manpower, cut costs and eventually improve customer service.

By leveraging their proficiency inlogistics, LogixGRID has acquired Clients amongst India are leading sites- pepperfry.com, amazon in, shopclucs. Corn, koovs.com -including other international clients namely- Acker wines, RaceTrac Petroleum Inc., and Karma Healthcare Ltd. “Our ERP distinguishes itself by being a cloud based SaaS product, Every client is having a separate virtual environment available to him where the reporting will customize as per his requirement. So he has a sort of personal software”, says Gurcharan Singh, Founder, LogixGRID.

LogixGrid has put the pedal-to-the-metal and are headed towards transforming the supply chain into a fully integrated logistics environment by providing top notch end-to-end logistics to the company right from the order collection —through the warehouse management (inventory)—to the final delivery of the product to the customers.

Reference