The current e-commerce ecosystem in India is characterized by fierce competition. Players in this ecosystem have taken note of the competitive advantage that a technology enabled, efficient supply chain can provide. In many cases, the logistics service provider is the only physical interaction that the company has with its customer. In other words, service levels of the LSP are directly related to the service levels of the e-commerce companies
To get high service levels at reasonable costs is what will differentiate the leaders from the rest. A good amount of progress has been made but there are still a number of challenges facing this sector.
The biggest challenge faced by e-commerce logistics in India is that of constantly evolving human emotions. This may seem vague, but let’s try to answer this question with a brief history about logistics in India.
Back in the day, a wife would write a letter to her husband who was in another city, and patiently wait for a letter to come back as a reply. There was trust and reassurance in the fact that yes — the other person would get back.
Fast forward to 2016, WhatsApp, Uber and other products have completely turned this feeling on it’s head, changed how we live our lives and ushered in the “Last Seen At” way of life. This real time visibility powered by technology has helped solve a number of problems and more importantly, raised expectation of service levels from customers.
Logistics and e-commerce have seen a similar transformation. Earlier users used to be happy with a broad commitment from the logistics company — that they would get the parcel at any time in the next 3–6 days. Users were satisfied with that commitment. But users now expect a similar level of visibility when it comes to parcel tracking. The broad commitment just doesn’t cut it. Users want to know where exactly their parcel was last seen at, they want to be able to track it on a map, they want accurate ETA’s, the ability to re-route the parcel at the last minute.
Going on to the specifics, the biggest difficulty with logistics in India is that of reliability. How can a logistics company give a delivery or pickup commitment, and live up to that promise. How can technology help here?
Uber is able to uphold high service levels from drivers by keeping a constant eye on them. There is a need to bring the same to field force and trucks in the logistics industry. Getting analytics in terms of end of day reports or in historic form helps, but it allows on ground resources to get away with inefficiencies through the day. It would be great if the system could alert operations managers when something is going wrong, rather than them having to keep calling and following up with the workforce.
Another big problem faced is that of fake updates from field executives. Marking an attempt without actually visiting the location. Having a system that alerts operations managers in real time on suspicious updates would be very helpful. The system should check if actual location and location of update match, or whether a call was made to customer or not or there were many updates from single location, but addresses don’t match.
The operations managers on ground lack a dashboard that can assist with “Guided Operations”. The senior operations management teams usually try to bring up issues in weekly calls, but this still does not empower the operations manager on ground to nip the problem in the bud.
Moving to some specifics on the potential solutions, operations managers usually work on a set of KPIs and thresholds. The system should alert operations managers when something is going wrong, rather than them having to keep calling and following up with the workforce. Users should potentially be able to define IFTTT (If This Then That) type alerts.
Some examples of these are:
- Truck Idle time greater than particular value
- Expected time of arrival delayed by more than X hours
- Pickup time exceeded by certain number
- More than n updates from same location
- Truck deviates more than X km from ideal path
- X parcels scanned and Y parcels missing
These and more can be defined in real time by users and they can decide how they want to be notified — through the dashboard, mobile, email and more.
At the end of it all — a logistics company in the e-commerce space is burdened with balancing service level expectations with the costs incurred to achieve these.
Experienced professional in logistics technology space and handles sales at Shipsy for Southeast Asia. Helped companies across different sectors reduce inefficiencies in supply chains. His other interests includes economics and psephology
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