Impact of IT in the Field Of Logistics and SCM

Sujoy Guha, CEO & MD, CriticaLog India

At 13 – 14 percent of GDP, logistics is an important service in our country. With fast development in infrastructure, implementation of GST and appreciation of logistics as a differentiator in the competitor environment – the focus on logistics has been growing steadily over the last decade.

IT and ITES (IT Enabled Services) is the lifeline of any modern organized logistics operations. While penetration of IT has already taken place in all major industries, advancement and innovative usage of IT and ITES is relatively new in logistics. It has not only helped to restructure the entire distribution set up, but also actively supported achievement of higher service levels and lower inventory and optimize supply chain costs.

This recent focus on IT in logistics arena has presented both the Service Providers and User Companies with unprecedented opportunities to gain competitive advantage. IT, therefore, in the logistics industry is evolving from just an enabler to distinct and welcoming differentiator. Whether it is the field of cost optimization, improving productivity in distribution, enhancing efficiencies in warehouse operations, security, collection of cash in COD or even competitive positioning of business initiatives – development in IT solutions are coming in thick and fast. IT infrastructure also has been developing in tandem to match the evolution of the IT solutions. Robust infrastructure is a must to carry these innovative solutions to the end users and consumers.

Some of the early entrants were ‘Electronic Commerce’ – which included electronic data interchange, e-mail, electronic fund transfers, electronic publishing, image processing, electronic bulletin boards, shared databases and magnetic/ optical data capture. The traditional Warehouse Management System (WMS) went through metamorphosis – to include bar coding, RFID, SKU DIM machines on the physical side – which in turn started supporting new and innovative functions.

Some of such features are:

1. Batch Number / Lot Number - A tag used to capture the product details like Manufacturing Date, Expire Date, and other information. This is captured through barcode label or RIFD tags.

2. Pallet LP Capture - A unique identification of pallets, this ID will be tracked for both warehouse and for ‘pallet in and pallet out’ concepts. Product over these pallets can be tracked either by pallet ID or storage location ID.

3. Case ID - This ID is used to capture information on cases, where for each SKU, box case will be defined with number of SKU units kept inside each unique product cases.

4. Advance Ship Note - ASN is one of the best practices in integrated supply chain. It links the flow of goods from the supplier and the customer. ASN when tied to unique (serialized) identifiers (bar code labels, RFID) on pallets and cartons can drive important logistics and supply chain benefits.

5. Truck Loading optimization - Helps to create and optimize ship caseloads containing single-type or mixed SKUs. It also assists in ascertaining the best ship case size for an order, thereby reducing significant space wastage.

Similar progress has taken place in the distribution front. With the E-commerce deliveries growing by leaps and bound, productivity had to be enhanced drastically to remain relevant. This leads to:

1. Route Optimization - Automating truck/delivery routing, scheduling and fleet management software solutions helping hundreds of private fleet and logistics operators to cut transportation costs every day – giving a fast return on software investment.

2. GPS Tracking - While GPS tracking by itself is not new, integrating its usefulness with ‘Track & Trace’ catapults to ‘real time’ monitoring of shipments, reduced fuel consumption, improved productivity and better Customer Service.

3. Last mail delivery on Mobility – This plays a vital role in SCM. Every end customer expects the delivery on time, especially on B2C transaction. Technology has provided a path to achieve this with real time capture of POD, through mobility, along with digital signature, delivery photograph and feedback on satisfaction via android hand-phones.

Apart from enhancement in the traditional software, many innovative applications have come in and many more are being experimented for affordable implementation. Uberization of trucks, allowing shippers to book directly in just one click without having to use a broker is one innovative example. 3D printing, Information of Everything (Big data), adaptive security architecture, cloud computing and many more are being adapted for faster improvement in logistics arena.

In conclusion, the effects of information technology in logistics and supply chain management, are improving coordinative relationships within internal and external dimensions, increasing responsibility, creating new relationships with customers by identifying their needs, developing sales channels, improving performance and improving the competitive position of the chain.

The pressure to invest in technology is high and will increase. Efficiency improvements at every level of logistics and supply chain are no longer wishful thinking – but an essential part of the overall logistics plan – supporting new ways of doing business.