Logistics Disruption

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DISRUPTION

IN
LOGISTICS
Introduction
Logistics companies are facing an era of unprecedented change as digitization takes hold and customer expectations evolve.
New technologies are enabling greater efficiency and more collaborative operating models; they’re also re-shaping the
marketplace in ways that are only just beginning to become apparent. New entrants, whether they be start-ups or the
industry’s own customers and suppliers, are also shaking up the sector.

Sharing the
Key Disrupting Factors PI(e)

Digitization
Changing customer expectations Scale Logistic Start Up,
matters scenarios Shake Up
Technological breakthroughs
New entrants to the industry
New ways to compete or collaborate
Complex
Competition
Changing Customer Expectations
• Like individual consumers, industrial customers now expect to get shipments faster,
more flexibly, and with more transparency at a lower price.

B2B: Striving for technology and transparency

•To achieve this logistics


•Manufacturing industry is
•Customers expects and transportation needs to
facing far greater
reduced defects, faster integrate data analytics to
expectations in terms of
market time and provide real time
transparency and
customized products. traceability and
performance.
predictability.

•IOT and Industry 4.0


The ultimate goal is to make
enabled this sector to
product as per Digital fitness is necessary
redefine their Supply Chain
specifications of each for every logistics company.
and way of interaction with
customer.
customers.
B2C Customers: New Shopping Pattern

Many B2C customers went online long back before retailers and its bit difficult for many logistics companies
to keep up.

The leading players are adopting “Total retail” model, which is operating model across brink and mortar and
online retail.

Total retail is complemented by ‘connected retail’, where retailers aim to create a seamless brand experience for
the customer across personalised marketing, the physical store, the digital experience, and the payment options.

Main Concern

Concept of dynamic pricing


Customers not bother about is not popular in logistics.
Shippers are not part of
shippers, all they want is Customer is willing to pay
branded retailers, they are
reliable product in no time same price irrespective of
individual entities.
with zero shipping charge seasonal constraints or
surcharges
Technological
Breakthroughs

 Digital Fitness : Data analytics,


automation and platform solutions
 So many technologies competing
for management attention and
investment

 Digital is still a challenge


• 90% w.r.t other sectors(data
analytics)
• Lack of culture and training
 Automation reshapes workforce
 Automation breaks down the
equation between service
level and costs
Technology Impact Uncertainties
1. Social expectations around
data privacy and security may
1. Improved supply chain change
Physical Internet(IoT
transparency, safety and 2. Regulation around data
based) efficiency security and privacy may
increase or be enforced more
stringently

1. Improvements in customer 1. Rate of development of data


experience and operational processing capacity is unclear
efficiency in operations 2. Question marks around data
Data analytics 2. Greater inventory visibility security
and management 3. Social expectations around
3. Improved predictive data privacy and security may
maintenance change

1. Development of costs unclear


(once a certain scale is
1. Enabling new platform-based
reached physical data centers
Cloud business models and
still tend to be cheaper)
increasing efficiency
2. Uncertainties around data
security
1. Enhanced supply chain
security (reduction of fraud)
2. Reduction in bottlenecks
Blockchain (certification by 3rd parties)
1. Rate of adoption uncertain
3. Reduction of errors (no more
paper-based documentation)

1. Reduction in human
workforce and increased
efficiency in delivery and
Robotics & 1. Speed of technology
warehousing (including
Automation development unclear
sorting and distribution
centers)
2. Lower costs

1. Lower transportation
1. Speed, scale, and scope of
demand
3D - Printing 2. Transported goods would
uptake by customer
industries still unclear
mostly be raw materials
New Entrants to the
Industry

Start-ups Big players of the Industry’s own


industry customers
Technology Autonomous Vehicles Warehouse automation
•Platform technology •Technology-automotive Developing in-house
•Digital technology collaborators capabilities
Business model •Self driving lockers
Amazon and Alibaba
•Asset light Crowd sharing platforms
•Freight forwarding •Car sharing
•Last mile delivery
New
Entrants
Logistics scenarios
2. Start-up, shake-up
1. Sharing the PI(e)

4. Scale matters 3. Complex competition


Sharing the PI(e)
Incumbents increase their efficiency and reduce their environmental impact by collaborating more, and developing New
business models, such as sharing networks. Research around the ‘Physical Internet’ (PI) leads to shared standards for shipment
sizes, greater modal connectivity and IT requirements across carriers
Leading Logistics Startups in India

• Launched in May 2011 • Launched in 2015


• Present in over 800 cities • Primarily operates in the business-to-
• Doesn’t own a personal logistics network business (B2B) logistics space
• Aggregator Model: enlists the services of • Works with large firms that need
several logistics partners transportation solutions
• Provides the technological backbone which • Provides trucks to large firms for
connects all partners transporting their goods across the
• Uber of logistics companies country with the support of a
technological backend.
Leading Logistics Startups in India

• Launched in 2014 • Launched in 2014


• Focused on the technology part of logistics • Follows a network-led logistics model to
• Integrates Internet of Things (IoT) solutions transport goods across the country.
to help track and monitor shipments at • Positions staff around India and goods are
different stages of the delivery process. transported in stages and handed off to
• Allows businesses to monitor their the next partner.
shipments in real-time • Each zone and region can be served by a
• Also protect against possible pilferage and set of driver partners without them
stealing while ensuring that the process is needing to drive across the country.
streamlined to reduce any delays.
Complex Competition

Technology players may enter the


logistics space with increasing
Customer expectations New Entrants
sophistication of technology

• Customers rapidly digitize supply • New entrants are predominantly


chain major players from online retail
• Autonomous vehicles become and technology based industries
accepted by customers
Large grocery and retail chains are
partially or fully owning their logistics
support and integrating both their
offline and online retail channels
Technology Collaboration vs
competition
• Warehouse robotic solutions
increase in sophistication • Major retail and logistics
• Autonomous vehicles achieve platforms compete for dominance
Increasing predominance of online market maturity • Retailers initially develop logistics
retailers and their capability to own • 3-d printing-based manufacturing capability to support own
logistics services have affected E- gains scale operations, but gradually move
commerce into 3rd party provision
Scale Up matters
• Incumbents increase efficiency by streamlining their operations and
taking full advantage of new technology.

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