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Roti, Kapda, Makan &

Digitization in the Logistics

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Social Media platforms of all hues are abuzz with

Webinars, and Articles on the crying need for
Automation through Digitization in the domain of
Transportation, Warehousing & Distribution. There
has been an entrepreneurial zeal around the
opportunities of digitization in Logistics which has
resulted in about thousands of STARTUPS - 99.99%
addressing the area of Technology Solutions for
Logistics. Not getting into quoting news feeds which
talks about the Billions of dollars raised in India and
abroad for such ventures, we the older generation in
this logistics business is happy to see the influx of
smart PEOPLE, CAPITAL, and finally the acceptance
of Logistics as the differentiator in business.

Roti (Food), Kapda (Clothing)& Makan (Shelter) is the

Indian version of the hierarchy of needs for a human
being. Similarly, organizations also ascend these
hierarchies based on their progress. While the co-
existence between the Logistics Service User (LSU-
Manufacturer) and the Logistics Service Provider
(LSU - Forwarder) has crossed a century and has
attained maturity in terms of meeting expectations,

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often this status quos are challenged by disruptive

technology which promises better productivity. What
history tells us is that Productivity enhancement tool
adoption is done only when it provides business
sense - reduction in cost or increase in the efficiency.

First in the hierarchy of needs comes Roti

- All things which are required for the LSP
to breakeven and here tech tools are way
down the list. Then Comes Kapada, the
first step of sophistication - Like a
transporter's transition into a 3PL and here
the tech tools are somewhere in the
middle of the list. Finally, Makan, the
established LSP stage where he moves
from an Asset-Less to Asset-Lite to an
Assetised Model. Here the tech tools
feature at the top along with his Infra
shopping list. However, the tech tools at
this stage relate more to Financial &
Process Control and he levels the playing
field with the LSU in tech adoption by
onboarding applications like SAP,
Salesforce, Oracle, etc.

The impact of two models covered by the

Disruptors in Transportation and Logistics are
discussed here for the brevity of this article, even
though there are a host of other similarly
important models where such tech-driven
disruptive solutions have made their mark.

AGGREGATION

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Transport Aggregators provide Platform-as-a-Solution

for Air/Sea Freight, Road Transportation, etc. Mostly
working on the Subscription model, most of them do
not handhold transactions that are left to the entities
who meet on the platform and get into the business.
While the model holds great potential, the Users have
to work with a clutch of these platforms to cover the
whole market and modes. Each platform is a silo and
the silos do not talk to each other and the silos do not
talk to customer’s systems very often. The disruption
promise was to break the silos and level the playing
field for the customer. In a lighter vein, a lot of these
tech platforms end up being dating sites for
transporters and Customers. There is a need for the
aggregators to address the Freight Management
landscape to remain in business in the long run.

VISIBILITY

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Imagine sending a courier to your friend. Today, you

can get a blow by blow account of how the package
moves along the execution chain of the LSP and
finally gets signed off and you even get the name and
photo sometimes of the person who has taken
delivery. Compare this scenario when you send a
consignment weighing tons across the border – What
you normally get is an ocean of emails and a DSR in
excel sheet from the same LSP as "tracking". For
sure, Visibility is a challenge and we need solutions
for the same. When the execution chain is through its
own assets and modes, there is no visibility tool
externally needed. When the execution chain of the
shipment is through the third party as in Freight

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Forwarding, visibility tools are required for internal

consumption and only filtered information goes to the
customer making disruption a lesser reality. Visibility
tools are highly recommended for the LSUs, but
adoption is very little as the IT depts are not ready to
fund these initiatives of Logistics visibility. In most
cases, it is seen as the service liability of the LSU to
provide the same. The initiatives in LSU IT is to in-
source all these functionalities in the ERP itself as an
IT solution. None of these ERP solutions have an
evolved Logistics module like their Financial or S&D
modules.

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There are other models where a Tech invention

creates an opportunity for new solutions like IoT,
Conversational Systems, Big Data Analytics, ML, AI,
etc. While Supply Chain is discussed as the biggest
differentiator for businesses, the Supply Chain
Execution process – LOGISTICS - is an Enterprise
OUT function and outsourced. Most of the LSU tools
lack Enterprise-wide Applications Integration and also
lack External integrations with data sources. This
makes those systems behave like form filling
accountants providing no great disruptive value.
Adoption of these tech tools will definitely be a reality
as we go along as it will provide great value to
enterprises. However, the enterprises first need to be
ready with their operational systems to receive the
benefits provided by these disruptive tech solutions.

That brings us to the discussion on where is it that

the Multi-Billion-Dollar funded tech tools for the
Logistics Industry find relevance and create
disruption. While speaking to my customers who are
both LSU and LSP, these days I am keen to discuss
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the new-gen tools of disruption they are using. The

standard response I get from the LSU is that it is up
to the LSP to use all those because, in the end, they
are responsible for the Safe and Timely transit of the
shipment. The response from the LSPs is quite
interesting. They are dabbling with some of these
new-gen solutions for sure, but mostly as trophies on
the wall as the entities are quite popular in social
media and find immense potential as Sales tools for
more business rather than benefits accrued from
using them. While delving deep on the benefits of the
new-age tools, they are frank enough to admit that
they evaluate outcomes in line with Customer
happiness, the effect the expenditure has on the
bottom line, and the Business Value they bring to the
table. That means the new-gen apps and models are
yet waiting to create the promised disruption.
Imperative to add here that there are some highly
adopted disruptive tech tools in the industry coming
from entities who have designed very relevant
solutions.

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While tech-driven apps like Uber have hit the high

ground of adoption by the people for personal use,
Uberisation of Logistics Execution is yet to reach
anywhere near the tipping point of going viral in
adoption. In Business, there is very little of an
emotional purchase. Every spend is weighed against
the relevance of the solution and the benefits on the
ground by the adoption of such solutions. Technology
is not the panacea for every problem in Logistics.
Technology is the chief facilitator of the Supply chain.
As a facilitator, technology solutions have to be
grounded in business reality and have to deliver
leveraged value to make adoption go viral and make

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the business of creating solutions commercially

viable. 

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