FMCG industry has taken a rapid pace among growing industries and transforming local markets. Weather it is eatable or housekeeping stuffs, customer demands are raising looking towards more comfort day by day and it is obvious in a swiftly developing country.

Especially metro cities and urban areas are turning outto be most welcoming new demands and satisfying them as a result small firms, SME can take place in the game promptly. New innovation bringing new opportunity, emerging manufacturing industries, workers are getting skilled on a huge market coverage, skilled are getting more skilled but unfortunately industrialist, distributors, wholesalers have not kept an eye towards distribution channel. When high demand is being focused distribution channels are just required to satisfy the needs but improve the process of distribution.

Current Challenges In Distribution :

There is the impossibility of offering a homogeneous level of services throughout the country. This problem is especially relevant in the case of customers belonging to the organized FMCG distributors, the elevated requirements from a logistics point of view of this type of distribution (urban last-mile, many small deliveries, perishable products, frequent problems in the billing process) and the great volume of resources that are involved, mean that few manufacturers can offer a uniform level of services in all geographical zones.

On the other hand, the other structural problem identified in this type of distribution is the elevated costs associated with the order-delivery-payment cycle. It is estimated that these costs in the distributors channel are four times greater than in large-scale retail. These high costs in comparison with other logistics systems are due to multiple factors (very small orders, very frequent deliveries).

Strategically oriented companies realize that the key element of long-term success is increasing interdependence. These proactive companies understand that strong long-term profitability can be achieved by creating and promoting positive relationships, mutual benefit between members of distribution channel.

1. Major trends that distributors must address :

Flourishing in augmented economy : Starting from e-trading and new retail business trend like multiple e-commerce websites, mobile applications, chatting applications, social media, customers want all of these in order to add the traditional- in – person, mobile and shipping services. E.G: A customer if wants to buy a product using internet in the evening, picks it up at the branch office next morning and can return it to the retail outlet. Distributors can introduce omni channel and van selling techniques, one that supports wide rage of supply channels and mobility devices to cater local areas and small enterprises.

Re-structuring the duty of the distributors : Highlighting themselves is an important strategy in such markets and distributors must have to implement some innovative and easy way to serve customers efficiently. Some distributors may diversify or expand their services like delivery at shop, online ordering , online pricing system, checking inventory in mobile phone to manage traditional break bulk system. For example, a food distributor might develop a mobile app that allows chefs to track inventory and automate the reordering of supplies to meet par levels.

Inspecting & Optimizing : Most distributors must have immediate access to more data than any other player in the value chain. With the right business intelligence, analytics, and reporting tools, distributors can quickly gain new insight into not only their operations but also the impact of customer interactions on business results. For example, distributors can use data to understand the true costs and profitability of each customer. With this insight, companies can adjust their processes to increase profitability.

Hold on to the new developed trends : Distributors must be prepared to quickly adopt effective new technologies. Some distributors want to use the technology to automate warehouse for instant out scan and delivery. Modern distributors are likely to implement augmented reality to have a knowledge of single inch information in the warehouse. Van selling- instant order taking, one hour delivery and instant invoicing is a great change in distribution industry.

2. Challenging factors :

Few visible challenging factors, customer relation system, awaking customers, being far from market, organizational culture, being more responsive for customers, achieving brand promise and also recognizing various life style, understanding customers needs, these information acquisition and local brands existing in the market also could be a good threat and wasting time.

3. Technology is driving the trends in the distribution market :

E-commerce is piling up : Distributors have growing interest in building a stronger e-commerce platform for their businesses. Almost 96 % of distributors have upgraded their website. E-commerce functionality is one of the top line up distributors want to step into. The interest is widespread among both small and large distributors.

Mobile is a game-changer : Mobile has changed how salespeople do their jobs and how they access information. Distributors are taking advantage of this trend not only to provide another channel for purchasing but also to grow mind share with customers. Mostly manufacturers are likely to deliver goods as early as possible and mobile has become revolutionary in this aspect.

Analytics is a step ahead : Advancing technology is allowing distributors to process data faster than ever before, resulting in the ability to track trends and be more strategic in applying sales resources. There’s a reality gap in what distributors want to do and what they are doing when it comes to the Big Data trend.

Logistics companies are always found to be un-organized and splintered slot of trading in the history of economy. Logistics industry require change in the services and operation like no other industries for which stability and growth of this industry become stagnant.

New age logistics technology enables inter-city as well as intra city freight and cargo management for which logistics connection and network become stronger and wide. Logistics network now seem easy to operate and stand on the line to offer better customer experience. Technology is successful to streamline the entire segment.

Logistics job require high security and responsibility to move shipment from one place to another and for its globalization it require highly robust technologically advanced platform.

Recently many logistics companies who run business using cloud technology have introduced commission based model in the market, online logistics management market place. This is a new revolution in logistics industry. Now whoever it is vendor or customer can enhance their service line and provide improved customer experience.

Again concept of out-door advertising has been successful to promote and explore the new ways of Logistics business like trading events, talks shows, inviting manufacturing industries to associate with.

New business model with an objective to address the issues like utilization, length turnaround time, driver shortage and pilferage.

Logistics start-ups have tremendously presented a light to today’s logistics industry. They are implementing innovative marketing strategies such as –

• Offering cashback and discounts deals.
• Offering gold and silver coins at festive season for business to business and business to consumer customers.
• Different discount for specific services like packers and movers as like certain amount of discounts, for courier or express certain percentage.
• Cash loyalty scheme – Increasing stickiness and high chance of earning customers.
• Offering bonus amount to drivers – Who complete more than certain hours of log-in in the particular month.

Choose the Best Cloud Logistics System and Mobility Solution to Boost Your Business.

Despite of being in uncertain economic positions and having lower oil prices than before government policies and investment to develop infrastructure and grow other sources are highly expected to economic breakthrough in UAE.

Logistics activities and GCC custom support together can lead to a good co-ordination and integrated regional logistics network across middle east Asia.

Airports and other coastal area of UAE have become one of the most important logistics hub in the world. Western and Eastern globe region connect through UAE ports mostly and resulting Euro- Asia trade take place in a greater scale across the region.

UAE government seem to be highly concerned about investing on EXPO 2020 and this should be worth investing which can be a key opportunity for the growth of logistics industry.

Since oil price has gone down relatively, government is reinforcing infrastructure and expecting revenue to be driven by expanding construction activities, modernizing the logistics system and other non-oil economic sectors.

Being a member of Gulf Cooperation Council (GCC), regional trade policy and transportation corridors in the region can benefit UAE. Apart from international logistics, domestic transportation is also expected to drive.

Few of the key drifts monitored across UAE logistics industry :

• Economic diversification
• Modern construction
• Increase export level
• Increased regional trading
• Multi model logistics
• Airport and railway network expansion
• Co-ordination of custom regulations
• Augmenting service sector

Other than oil UAE GDP has been composed by several sectors such as retails, logistics, tourism, real estate, and energy as 12%, 8%, 9%, 22%, 31% respectively.

As oil price has fallen down globally near around 60-70% at the end of 2014, oil companies across globe have felt the impact on trading and individual capita income, UAE remained one of these but UAE government enforced positive policies for country’s economic overview and helped to neutralize the impact of declined oil price thorough other sectors.

In recent few years, construction industry in UAE has rapidly grown to a certain state that small companies which started with tiles, marbles, building blocks now same companies have been engaged in manufacture and large construction operation. Gradually export level of construction materials has enhanced and all neighbouring countries are associated in the same regards for which tourism and corporate presence also tremendously climbed in the global vision.

Regional trade policy and government relations between UAE and KSA closely resulted an increasing economic rate and commercial bonding. Countries having membership of GCC are continuously showing interest to enhance domestic demands and strengthen bilateral trading policies.

UAE invested more than 25billion $ to build its railway infrastructure which has risen multiple sources of multiplies countries revenue and one among them is logistics. Logistics industry’s contribution is around 8% which is expected to grow around 23% by 2020.

Railways structure is designed in such a way that all the parts of emirates can be connected with each other and boost the internal communication. 11 billion $ already allocated to Etihad rail where as Abu Dhabi Department has sanctioned a budget of 8 billion $ for metro and DUBAI approved around 2billlion $ for its tram and metro communication project.

The planned regional trading position in DUBAI and increasing modern construction surely will capture a new picture of spontaneous growth of logistics business.

Growth of logistics carry out the growth of technology implementation, new formed logistics companies and government approach to modernize the technology in UAE towards multiple countries has been bringing a rapid successful growth.

In Shanghai 2010 international visitors were around 6% and in 2015 Italy it was projected to attract more than 30% and in 2020 it is clearly a challenge for UAE to meet at least 40%.

After government’s sincere contribution, greater range of preparation and huge multi billion investment by industries, it shows that UAE is an emerging spot for logistics in near future and for small to medium business it is like a golden opportunity to invest in logistics sector.

Cloud based platform integrated with augmented reality and world’s most advanced multi-model logistics system “LogixERP” and mobility platforms are highly requisite for upcoming UAE logistic industry.

Recommendation: LogixERP cloud logistics system for international logistics business.

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.