India is changing and it's changing to get better every day. At present, there are more than 3100 startups established and running, which are focusing and working tirelessly to address various pain points to make our lives simpler and efficient. However, there are some bigger challenges that still require serious contemplation and robust solutions. India is creating a heavy buzz in the market to become the global manufacturing hub of the world, but in reality with our current standards of logistics and supply chain management we are simply biting off more than we can chew.
Due to the rapid growth in exchange of physical goods across the globe and increasing demands in domestic and international markets it is now a necessity to match our production to consumption. The global average of Logistics costs accounts to roughly 4 to 5 percent in comparison with 6 to 10 percent of average Logistics cost of India, which means there is a gigantic scope of improving the margins by 3 to 5 percent by improving the supply chain and logistics processes. It’s been proven that with ‘logistics costs’ one of the fatal problems in supply chain management is ‘Infrastructure!’ Right from the storage problems of food grain, which leads to wastage in lakhs of tonnes to the constant grappling of the supply chain in the e-commerce sector, there is an inherent need for disruptive solutions. Solutions that can tackle the problems pertaining to Warehousing, IT, Inventory, Network design, etc.
In a country like India where logistics in e-commerce is of a paramount value. The Timely delivery of products, collecting returns efficiently are the key factors that uphold the companies consumer engagement and satisfaction. Big giants like Flipkart and Snapdeal are still wrapping their heads around to mitigate these problems even after launching their own logistics arms like eKart (Flipkart) and SafeShip (Snapdeal).
The recent example of how logistics problems can paralyse even the most disruptive businesses is the case of Urban Ladder. The company almost lost 30% of their business because they had to scale back their operations from multiple cities to just three cities in India (Mumbai, Delhi and Bangalore) due to the logistical challenge. At present they are only in 15 cities and the Co-founder of the company Rajiv Srivasta says, “Our plan is to get to 25-30 cities by the end of 2015 and we will stop there, because dealing with infrastructure issues after that becomes a big pain point.”
Although startups like Delhivery are disrupting the logistics industry and creating new milestones. But there is still a need for many more startups to address multiple pain points of this industry.
The emergence of Parcelled and Shadowfax, both few months old hyper-local logistic startups is a proof that there is an imminent need to disrupt the industry and solve the problems by using innovation and technology.
In the international market of Logistics and SCM, startups like Bufferbox which provides alternative locations for delivering parcels and Shipwire, which provides global warehouse network and fulfillment services based on cloud platform are changing the traditional ways of supply chain management. One more disruptive business which is tackling the logistics and supply chain problem is Keychain Logistics. By it's innovative technology solutions it connects businesses directly with truck carriers, track shipments and monitors the process online via an iPhone app.
Although, India does not require the ‘cut and paste’ innovation because the Indian market is different, but India's logistics and supply chain problem is not an inconceivable task either. India needs to address these issues by creative ‘out-of-the-box’ thinking and resolve various pain points which are not addressed by the traditional ways.