Uberization of Logistics Has Arrived

For an industry that is forever on the move, the world of logistics is in a perennial state of change, facing numerous challenges and vague demands. Staying ahead in this dynamic landscape can be quite a roller coaster. Adding to this dynamic is the arrival of ‘Uberization’ that is knocking on the doors of logistics, mounting “faster that fast” delivery expectations and reaching a fruition point of determining who would be the survivors. For a logistics player, this is a do-or-die moment. The ones to adapt and move forward will be distinct. Someone who does not adapt will soon be extinct.

WHY SHOULD LSPS BE WORRIED?

Despite the immense opportunities, the logistics sector has recorded, at an average, a lower capital market performance and return on invested capital than many other sectors. The average return to shareholders is approximately 7%, which is lower than the cost of capital. Add to this a CAGR of approximately 3.6% that places the industry in a tight corner. With many M&As failing to deliver expected results and investor expectations not being fully met, the logistics sector’s major challenge lies in attracting major investments and finding ways of increasing Return on Investment.

Add to this the emergence of the ‘Uber’ economy. The concept of on-demand logistics with anytime access from anywhere using mobility is topic discussed by many already, but what if we now add a twist to this story and include “anybody” to this concept? Can you even imagine the exponential implications of this move? By just registering into a logistics network through an app, ANYONE can become a valid, authentic transporter. When this move becomes a norm, we might as well be waving goodbye to the logistics operators who would just be a redundant appendage to the entire supply chain. How can an app entirely replace a logistics operator?

Let’s take an example:

A supplier, Mr. Daniel of ABC Goods, needs to ship a consignment from location A to location B. He logs in to the logistics app and provides details regarding the nature of the consignment, starting point, destination, and possibly desired time to reach destination. Mr. John, a college student, who owns a car, is in his native town location A and is travelling back to his college at location B. John’s vehicle has good empty boot that can easily accommodate Daniel’s consignment. So, when John logs in to the logistics app, he sees Daniel’s details. He gets in touch with Daniel and finalizes the deal. John collects the consignment and starts his travel to his college. The app will help Daniel to track his material real time, until it reaches location B. Now isn’t that an efficient self-service approach? What are the advantages of this form of Uberized logistics?

  • You do not need a third-party logistics operator
  • You can get to pick and choose your transporter through the app
  • You can get to track the entire trip until the destination is reached
  • You can assess the transporter’s performance in real time and also immediately act in case of a disruption
  • You are in complete control of the transportation process

Now, that’s true on-demand service! Compare this with this shocking fact: A recent report on logistics in ‘The Economist’ says that every year American lorries travel empty for approximately 80 Billion km – 28% of their total mileage. The regular logistics players continue to battle basic hurdles, trust obsolete practices, and fail to create value for the shipper and customer. Some of the inherent flaws in the LSPs approach include:

  • Minimal end-to-end visibility, making it impossible to track efficiency of a process
  • Lack of integrated systems that may work in silos but fail as a connected setup
  • Inconsistent approach to balancing agility versus stability
  • Dependence on legacy systems to manage complex operations
  • Apprehension to invest in technology owing to blind misgivings about ROI
  • Inadequate resource and asset utilization
  • Inability to place customer first and respond in a timely manner
  • Lack of a 360-degree planning and execution & the inability to predict profitability

Logistics Service providers need to deploy technology as a core competence and differentiator and not just a support service. Logistics Service providers will become large technology companies in the future. They have to TAKE THE “LEAP NOW” OR “SLEEP FOREVER”

In this critical juncture Logistics service providers trust Ramco to stay ahead of competition; tackle Uberization and create value for their customers as well as their investors. Here is why the industry trusts Ramco to handle Uberization:

  • Integrated Systems to move from silos to a connected setup
  • End-to-end Intelligent Visibility to track the efficiency of all process
  • Optimization for better asset & resource utilization
  • Customer First Approach to respond in a timely manner
  • Asset Light Technology which does not hurt your pocket
  • Planning & Analytics to predict requirements better

 Integrated Systems

Get away from the pain of integrating multiple technologies from back-office software to on-board diagnostics during the shipping process. To do this seamless deployment of an integrated platform is the urgent need of the hour. Getting employees, managers, customers, external partners and existing inventory systems all on board to work together can be a difficult task to complete, especially considering the size of modern supply chains. WMS not talking to a TMS needs to a thing of the past and so should the need to constantly integrate new requirements which emerge on a daily basis in this dynamic world.

An integrated system enjoys the benefits of 100% visibility, almost zero data duplication, smooth flow of information from one stage to the other, incorporating scalable subunits at any stage, and data security. This allows deployment of effective control towers and solves the visibility challenge that plagues the industry. Ramco’s Logistics Software is an integrated solution covering the end to end needs of LSPs. From warehousing to Transportation to Order & Hub Management to HR & Finance, all the needs of an LSP are covered under a single umbrella. Even the customer & vendor portals are a part of a unified ecosystem.

End-to-end Intelligent Visibility

The supply chain landscape has evolved immensely over the years, yet the road of uncertainty cripples its progress at every stage of execution. With infinite variables across stages, even one misstep leads to complete breakdown of the entire chain. So what’s the solution?

A grandmaster of supply chain management who

  • has a complete overview of the entire landscape,
  • watches every move across all stages carefully,
  • identifies and predicts possible risks,
  • assesses all possible options, and
  • makes the perfect move to easily overcome all hurdles and confirm success

All these qualities converge at the Ramco’s Command Center, which is the control tower of the supply chain landscape.

  1. A command center provides complete visibility of all assets – their overall location (in production, at the warehouse, in transit, etc.) and granular details (mode of transportation, the personnel details, exact location, temperature and other information of perishable or expensive goods, etc.).
  2. It helps the stakeholders a clear picture of the current and future availability of stocks.
  3. Real-time information or prior prediction of risks helps control revenue leakage, builds trust with the customer, streamlines operations, optimizes service levels with minimal inventory, maps supply with demand, and increases ROI.
  4. Command centers effectively utilize the supply chain network to predict efficient transportation routes based on real-time traffic information, minimize instances of capacity idling and inadequate capacity, and alert multiple nodes the moment an order is activated.
  5. Precious information can be converted into simplified data insights and deliver them to different sources – wearables, mobile interfaces, dashboards, or canned reports

A command center is indeed the supply chain genie that helps LSPs to “Knowing Soon & Act Fast”.

Optimization

In the world of Uberization, LSPs cannot afford to have empty trips. Even return journeys have to be capitalized & cannot be empty runs. In an e-commerce scenario, when a customer orders multiple items, LSPs needs to have the intelligence to club the orders & deliver the items together, as much as possible, with minimum knocks at the customer door to improve profitability. Return logistics need not be immediate after the delivery of goods, but can happen weeks after delivery & LSP need to be in position to handle it without losing money. All these are scenarios where an intelligent processing of the situation is needed, keeping the constraints in the mind.

This is where Ramco iPO (In-memory Processing & Optimization) engine comes to play. Ramco iPO is a flexible framework that uses algorithmic models to analyze every relevant data set and provide holistic solutions considering every permutation and combination of constraints. The biggest advantage of such a solution lies in the powerful decision-making capabilities the systems gives the user. The organization thus benefits from a system that cognitively assesses all options to pull out all possible solutions for consideration. You will be forewarned about possibilities of real-time disruptions, you will have the best possible fleet plan, you will have real time information about your vehicles and drivers, and you will have the best option to manage a real-time disruption. The decision is yours, but the backend checks are automated. Gone are the days of Multi Level Planning wherein One objective is optimized and evaluated whose results had to be fed to other Module for next level planning & so on. With Ramco iPo all the objective functions are executed at the same time and a collective decision is taken at the end

Customer First Approach

LSPs service multiple clients from various industries and hence an IT system that puts the customer first is very critical for the success of LSPs. Else the situation will become “Business follows IT” instead of “IT follows Business needs”.

In a rigid system, deviations are done through work-around & value-added processes (VAS) are hard coded. For even a minor change or new VAS, the business teams will need IT vendor support. Tools on Mobile applications will enable role and flexible work flow process execution.

What if you had a role-based solution that provided every piece of information for the user through a single window customized for each user role? Operational efficiency and process compliances will increase manifold when applications and analytics work at the backend and just the end information is published on a single window to enable decision-making and execution by the user. The need of each customer is unique and standard processes don’t deliver value.

This is where Ramco Logistics Software flexi workflow approach comes into play

It allows you to

  • Set different workflows for different customer needs
  • Create multiple VAS with fixed & variable outputs
  • Position VAS at any process stage
  • Link VAS to a Zone for monitoring, if required

Flexi Buy/Sell Management, Flexi Billing Model, Customer Portal with instant POD to improve billing TAT are all benefits of the “Customer First Approach” of Ramco Logistics Suite.

Asset Light Technology

An asset light i.e. low capex, cloud-based logistics management solution has several advantages over the traditional model of manual deployment. Most notably, cloud solutions are more affordable, efficient, safe, infinitely scalable, and easier to integrate with existing systems than localized software.

Setting up the entire data storage network and software, supporting with system administrators, and integration with local systems stretches every organization’s budget. The cloud solution simplifies this hurdle by spreading the cost as the customer base expands and is flexible, accommodating multiple price schemes for multiple formats of businesses. Cloud solutions enable business to automate a huge chunk of their manual processes, bring in data validation checks, organize the entire business process, and help in making informed decisions based on real-time, authentic data by removing data duplication. Security and loss of data are major fears with any technological initiative; however, with airtight features, every organization’s data is secure with cloud systems. Cloud as a change initiative is futuristic and includes easy options to accommodate scaling up of operations with minimal disruptions. It also accommodates seamless integration with the core business systems and improved collaboration owing to data-sharing options and real-time updates anytime from anywhere. It’s thus no wonder that more businesses are moving to the cloud world and enjoying the benefits.

Planning & Analytics

The empowering nature of data has long been established. However, every organization has infinite sources of data, which can mislead organizations if they are not managed efficiently. The purpose of an analytics tool is not to simply derive a set of measurements for comparison against static benchmarks. This is where Ramco’s data analytics is different and practically usable.

Ramco’s Analytics is dynamic, alerting organizations to future events by extrapolating relevant real-time data and providing all logical options to resolve any situation with minimal response time. Get your asset-buying decisions right by deploying the power of predictive analytics. This can help you to simulate scenarios on gaps in your capabilities and provide near accurate predictions on whether a specific M&A will fill the gap. Data is indeed a goldmine of opportunities – you can stretch the boundaries of the advantages that streaming data analytics can achieve for you when used effectively.

Conclusion:

Logistics providers’ role in global trade is continuously evolving; hence investing in a futuristic and scalable end-to-end technology solution will enable them to claim a large share of supply chain profits by working closely with customers, supply chain partners, and Technology Service Providers (TSPs). As business models evolve, the boundaries between customers, suppliers, TSPs, and LSPs are becoming increasingly blurred.

Technology can help create a win-win situation for all stakeholders to:

  • Achieve end-to-end visibility across multiple tiers of your supply chain & improve the flexibility and agility of response. Can one afford to not know the real time status of a consignment now?
  • Reduce inventory levels and costs and provide manufacturers and retailers with adaptable and responsive capabilities. Will anyone say no to an extra savings on the cost?
  • Boost your utilization by decreasing the idling loss of assets. Don’t all LSPs agree that a half-full container is half the revenue lost?
  • Exploit the logistics networks capacities and remove redundant networks ‘instantly’, thus improving on time delivery and reducing costs. Cut the waste and reap benefits.
  • Increase your customer satisfaction by fulfilling customer demand for choice in terms of product, delivery time, and location. In addition, it will drive higher order fulfillment rates and improved customer service levels. Who does not want a “customer for life”?
  • Provide higher returns to stakeholders and value to customers. After all, is this not the whole objective of any business?
By | 2018-05-04T10:35:19+00:00 April 30th, 2018|Logistics Management, Technology, Transportation|Comments Off on Uberization of Logistics Has Arrived

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