Top 5 logistics challenges faced by e-retailers!

With ecommerce companies moving towards an omnichannel approach that integrates both offline and online infrastructural challenges pose a serious roadblock
Top 5 logistics challenges faced by e-retailers!

Over the years, many predictions have surfaced about the transformative effect new technologies would have on supply chain. So far, many have failed to materialize, and we are still stranded on the foothills of this endeavor. Every logistics company likes to reflect on the promised land of a highly connected and efficient logistics supply chain that is responsive to the changing consumer expectations. 

When the stakes are high, companies need to reinvent their operational structure. While rising digitization can be overwhelming, doing nothing is not an option. Also, being too slow to adapt to changes can disrupt your market and tip the scales of your business growth downward. Swift transformations in technology along with rising customer needs has posed several challenges in logistics for the year 2018 -

Adoption of new technology 

Logistics space in India has been primitive, unorganized and dominated by the conventional pen-paper system. The biggest hurdle that emerging startups encounter during client acquisition is ‘change management’. Implementation of a new process brings significant changes to a company’s conventional business model and the day-to-day practices, as well as resistance from the on-ground resources which are change aversive and demand flexiblilty in the system.

While, technology can appear as a black box to the end user, building a level of trust and demonstrating the value before a wide-scale adoption can be challenging. At Locus, we work as an extended arm of your entity and channel our efforts in helping operational management achieve smooth transition in adapting to new innovations.

Moving towards a more consumer-centric market 

As e-commerce industries are now more consumer-centric, the focus has shifted towards profitability rather than sustenance based on inorganic growth. With rising consumer expectations, e-commerce companies are looking at logistics as an enabler to drive customer satisfaction and understand that delivering an exceptional customer experience builds a competitive moat. With initiatives such as Amazon Prime (delivery within 2 days) and Amazon Prime Now (delivery within an hour)gaining global popularity, customers now enjoy super fast deliveries while expecting the same from others. While Amazon has proved itself to be the game changer, smaller players feel the heat. But with lack of resources to deploy their own extended logistics arm, they still rely on third-party logistics.

Data -driven decisions & predictive analytics 

 New age digital consumers are smart, well informed and tech-savvy, thus making supply chains more consumer-driven. Working in a mission-critical supply chain, you just cannot afford to trust your gut. Harnessing the power of data-driven technologies including Big Data, IoT, sensor technologies and machine learning, supply chain management can consolidate unstructured data to provide in-depth insights into their operational efficiency that aid business intelligence for careful strategic planning. Predictive analysis facilitates supply chain to improve operational efficiency and effectively plan for future demands. 

 Last mile delivery 

Last-mile delivery remains to be the significant pain point in logistics. Despite e-commerce driving a radical shift in the utilization of delivery resources and networks, the lack of competitive edge among logistics players has stifled innovation. Although many players have sprung to action, just adding a layer of technology to traditional processes will not address deep-rooted problems such as poor infrastructure and unorganized truck ownership. There are multiple ways to deliver shipments, but for a human mind to comprehend factors such as traffic and order density as well as business constraints, could take days, leading to inefficiency and ultimately affecting consumer satisfaction.

Innovation is the key. Technology that leverages Data Sciences and Machine Learning can play a pivotal role in supplanting human-based decisions that dominate the last mile of the supply chain. More complex the challenge, bigger the opportunity to innovate. At Locus, we are continually trying to smoothen the creases that exist in the last mile operations factoring in real-world constraints and 100s of exceptional scenarios.

With e-commerce companies moving towards an omnichannel approach that integrates both offline and online, infrastructural challenges pose a serious roadblock. Recognition of logistics as part of the infrastructure sector is a significant milestone for the Indian government. Massive investments have been dedicated to improve the current state of transport industry which remains fragmented and unorganized. Also the introduction of GST - One Tax reform- has eliminated multiple taxes and established transparency in the system. Technology driven innovation that is optimized to work on-ground will be the prime mover in disrupting how supply chain industry function. 

The article has been penned down by Nishith Rastogi, CEO & Co-founder, Locus

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