Technology and Talent: Dissecting the heart of the Logistics Sector
The booming marketplace after Covid has worsened supply and demand problems for businesses. Manufacturing and marketing a product is hard enough, but the logistics of getting the product to its marketplace and consumer has been the ultimate challenge for enterprises.
In India, the logistics sector was valued at Rs 15.1 Lakh Crore (US$190 Billion) in 2019 and is forecasted to reach US$350 Bn potential by 2025. According to our research, the sector engaged around 12 Lakh people till June 2022. 3.5 Lakh are direct employees and the other 8.5 Lakh are working as an indirect workforce that includes warehouse operators, truckers, and delivery agents. This shouldn’t be a surprise since e-commerce and D2C brands have heightened customers’ expectations for affordable and quickly available products. Hence, logistics-related challenges of shipping, inventory management, operations, and customer service are on the priority list for enterprises to ensure customer satisfaction.
Quick commerce businesses setting up Dark Stores and Micro Fulfillment Centers demand technology that is location-optimized and time-sensitive. AI, ML, and IoT technologies are helping to expand the capabilities of these enterprises in terms of serviceability and sustainability.
Hence, digitally-evolving logistics startups are actively recruiting talent to build software systems and interfaces and implement better operations to improve supply chain logistics through better resource utilization and territory optimization.
In this post, I’m going to share how enterprises are investing in technology and talent to unlock the power of Logistics tech.
- Technologies transforming the logistics sector
- Warehousing and Technology
- Transportation and Technology
- Tech and Non-Tech talent driving the change
Technologies Transforming the Logistics Sector
We all know that the pandemic brought problems with production, sourcing, and other areas of the supply chain, and companies had to pace up digital transformation. Since logistics enterprises carry out coordination and management of supply chains of varied organizations, technology is the enabler to solve the big challenges for the enterprises. In the transformed market, new-age logistics companies offer agility and transparency across the supply chain using AI, ML and IoT technologies.
Therefore, the sector which was heavily ridden with costs due to the long-held pen-and-paper approach is undergoing tech transformation and techies are highly in demand. Let’s discuss the 2 key segments of logistics being transformed through technology.
Manufacturers and companies that lease space inside warehouses have been creating an ever-increasing demand for the warehouse industry in India. However, as global producers shift their focus from China to India and other Asian countries, the demand for warehousing is expected to grow sustainably for the next 5 years.
Artificial intelligence is helping in keeping up with the demand. AI can forecast demands and re-route shipments on the move. If a supply chain contains numerous warehouses, AI can predict the most efficient method of moving the inventory. Moreover, AI predicts the increase in demand for products, making it easy to stock in-demand products in nearby warehouses on time. Hence, the logistics get planned well in advance which leads to reduced warehousing costs and better customer service.
During the pandemic, regional warehouses proved to be a better choice than one giant warehouse as they brought agility to the disrupted supply chains. Distribution centers also proved to be better at maintaining service levels and deploying technologies. Now quick commerce enterprises have dark stores and Micro Fulfillment Centers (MFCs) spread across metro cities.
These fulfillment centers have redefined urban logistics and last-mile delivery by taking up warehousing spaces inside the cityscape. Moreover, the demand for dark stores and MFCs is on a steep rise in the FMCG, Food, and Grocery space where consumers are loving the convenience of 30-minute delivery. These centers are being strategically set up in highly populated zones by tracking the road dynamics and traffic data.
The industry focus is also on bringing automation to reduce human contact in handling materials. It won’t be a stretch to anticipate autonomous vehicles and multi-functional robots to grace the Indian warehouse ecosystem soon enough to make processes faster and more efficient.
Likewise, Covid also gave a chance to the Indian logistics sector to try out multi-modal shipment, as the demand for transportation rose for a variety of products. However, for supply chains with consumer goods, it was especially important to make milk runs effective. As last-mile delivery grew exponentially with the increase in online delivery, companies started to invest in technology that is location-optimized and time-sensitive.
IoT companies are helping in that by providing high-value data and tech services for the supply chain industry. IoT sensors and GPS technology allow real-time delivery tracking for customers. Further, IoT-powered management gives the best routes and practices through real-time monitoring of vehicles and warehouses to accelerate delivery and improve fuel efficiency.
In transportation, excessive carbon emissions involved are a big concern and a challenge for logi-tech companies, especially in last-mile delivery. A recent report by Stand.earth and Clean Mobility revealed that the last mile emissions of the 5 Indian metro cities: Delhi, Mumbai, Kolkata, Bangalore, and Chennai are significantly higher than that from entire countries like Canada and France. Enters EV.
Electric vehicle adoption is reducing carbon emissions to reach the environmental health and sustainability targets globally. Deploying EVs with IoT devices that provide data-driven intelligence is a huge leap to make last-mile delivery efficient and sustainable. Consequently, last-mile delivery is going to be a chief contributor to establishing the EV ecosystem in India.
At the same time, we are also in the process of recovering and amplifying other modes of freight shipment such as railways and air shipment. Railways, being the comparatively faster and cheaper mode of FTL freight, have especially played a major role to bounce back from restricted movements during the pandemic and reduce the pressure on our road networks. Deploying the aforementioned technologies would play a huge role in the comeback of freight shipment.
Autonomous vehicles are still in the trial stage in India. However, machine-learning sensors and technologies can make driverless trucks and drones a reality in the future of Indian logistics.
Investing in skilled Talent
Technology enablement is paramount to power up supply chain logistics functions for enterprises. Hence, logistics tech service providers are on the lookout for tech talent. In order to build efficient and scalable hardware and software solutions for businesses, enterprises need skilled engineering and IT talent. The most in-demand IT roles in Logistics-tech include IT Operations, IT Support, Cybersecurity, experts in cloud technologies, Data Scientists, Data Engineers, Data Analysts, and other functional and technical roles like Backend developers, Full Stack developers, SDET, and ERP.
Moreover, AI, ML, IoT technologies and data integration are the basis of most innovations happening. Therefore, AI and ML Specialists and experts in business intelligence are mainstays for the tech teams of Logi-tech ventures.
From monitoring vehicles to accelerating delivery and fuel efficiency as well as setting up dark stores and MFCs across tier-1 and tier-2 cities, skilled tech talent is the engine to enable a fast-paced logistics ecosystem. With the existing talent crunch for these future skills, the competition to hire skilled technology talent is fierce.
Moreover, as logistics tech enterprises replace conventional cargo with commercial EVs, it sends out a huge opportunity for skilled talent in manufacturing, automobile, and EV mobility. Mechanical engineers, automotive engineers, EV engineers, and chemical engineers have heavy demand in the EV manufacturing industry powering the logistics sector.
Investing in the semi-skilled workforce
At the same time, enterprises with e-commerce and retail channels as key clients must tackle the growing consumer expectations for quick and cheap delivery. Hence, delivery agents and customer support professionals are some of the most important pillars of a successful logistics business.
Quickly assembling a sales battalion with regional language ability is a huge competitive advantage for e-commerce and logistics-tech enterprises. As quick commerce enterprises set up dark stores and MFCs in dense consumer markets, the semi-skilled workforce for packaging and loading and last-mile delivery executives are going to drive market penetration for logistics enterprises.
Having access to warehouse operators, loaders, truckers, delivery agents, and customer support professionals across locations is a challenge that logistics enterprises must tackle. If you are looking for reliable partners to help with your sales staffing problems, get in touch! We’re happy to help!
To fulfill the demand for e-commerce in India, supply chains have to be made more effective. Logistics tech enterprises are building IT infrastructure and apps to make that happen and support the digital transformation journey for organizations. Access to tech and non-tech talent is a stepping stone for enterprises on this journey.