Path to Growth: Technology Enabled Logistics in India

Transcription

1 Acatech Project Path to Growth: Technology Enabled Logistics in India N. Viswanadham INSA Senior Scientist Computer Science and Automation Indian Institute of Science, Bangalore Contents Logistics and E-logistics E-Logistics Innovations Logistics in India New Governance Model: Orchestration Conclusions:Strategies at National, Vertical & Firm levels 1

2 Logistics and E-logistics Business Logistics- CLM Definition The process of planning, implementing & controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information and financials from point of origin to point of consumption for the purpose of conforming to customer requirements. Includes Inbound, Outbound, & Service logistics CLM - Council of Logistics Management -Adopted

3 E-Logistics E-Logistics is a dynamic set of Sensor (IOT), Computing (Cloud), Communication (Internet, Mobile) & Collaborative technologies that transform key logistical processes to be customer centric, by sharing data, knowledge & information with the supply chain partners and enable synchronization of events and right decision making. Companies deliver customer-configured products and value added services faster than competition Types of Life Cycle based Logistics Inbound logistics: Moving components from suppliers to production Manufacturing logistics: Parts moving Machine to machine on the factory floor Outbound logistics: Moving finished products from production line to the Retailer via Wholesalers Retail Logistics: Goods delivery to the consumer by retailer Service logistics: Moving used goods to service stations (MRO) Reverse logistics:movement of used goods for reuse, recycling, remanufacturing, refurbishing Spare part logistics: Storage of Spare parts from manufacturers and suppliers 3

4 E-Logistics Innovations Technological Advances:Internet of Things,.. IoT technologies can be categorized into Tagging things, Sensing things and Embedded things. The tagging things provide item identification, things can be connected to the databases. The sensing things enable us to measure and detect changes in the physical status of our environment. The embedded things yield information about the status of the embedding object. Cloud Computing SMAC technologies Cyber Physical Systems 4

5 Social Media for Logistics FedEx and UPS use Face book and Twitter to deal with customer issues and complaints. 3PL s post Truck loads on Twitter to find carriers to carry loads & Trucking companies are posting carrier locations looking for loads. Companies use Google maps to track goods, trucks, etc. Logistics companies are posting educational and informative content to attract customers to their websites. Logistics companies are creating social communities around their core services, bringing clients and employees together into a virtual conversation. Technology Innovations in Logistics Types Manufacturing logistics: Automation & Agent based controllers Inbound logistics : Trucks are equipped with radio transmitters and GPSs and goods are tagged with sensors. Retailers watch shoppers from entry to exit in store for buying to happen. Recommender Systems market products to customers based on their browsing, searches, earlier purchases, etc. Multi channel delivery at customer convenience Service logistics : Time table maintenance to predictive analytics. Aircrafts and Turbines can predict failure weeks in advance using IOT information. 3D printing is enabling availability of service parts as per the original design at the exact time required. 5

6 Genpact: Control Tower for Penske Genpact Orchestrates the logistical services of Penske Genpact BPO workers in India and Mexico Check the customer s credit status and arrange necessary permits. Assign Trucks and Drivers based on driver s choice and also the maintenance record of the truck If the truck gets stuck at a weigh station for permits, the BPO staff transmit the necessary documentation. After the trip, the driver s log is shipped to a Genpact facility Penske processes lot of info: numerical, text, voice, past records of 15K trucks and equal number of drivers Supply Chain Control Tower is now industry best practice Retailing: Disruptive Changes Retailers watch the shoppers in the store, where they go, in what order and understand how all these map to actual sales. Recommender Systems suggest to consumers products based on their browsing, searches and earlier purchases Netflix uses recommender system for each subscriber. Target predicted pregnancy in a Teen based on her buying patterns. Focus shift from Sales & Marketing to Predictive Analytics using Industry Knowledge, Consumer preferences, Connections with the Stakeholders, Social media analytics Privacy is at stake??? 6

7 On Line Retail Logistics In India, Flipkart, Amazon, Ebay.in, Snapdeal, Shopclues, Myntra, Yebhi, Tradus, Pepperfry Homeshop18 are creating online retailing wave. Online food&grocery stores: BigBasket.com, ZopNow.com, EkStop.com and LocalBanya.com are launching their own brands for fruits, vegetables, rice and pulses priced to compete. DHL is launching e-fulfillment centres in 2014 in Delhi, Bangalore and Mumbai catering to e-commerce and SMEs. Blue Dart Express is planning to invest in multiple delivery options including cash on delivery and set up warehouses. N. Viswanadham, V.Vinod Kumar & R. Gaonkar, Optimal retail order fulfillment strategies, Proc of the 4 th Asian Control Conference, Sept. 2002, Uber for Logistics is Happening in Asia Gogovan and Easyvan provide a peer-to-peer app that connects van drivers with individuals or businesses who need their Goods shipped quickly Rio Tinto s driverless trucks moved 100 million tonnes Trucking firms use data from new sensors monitoring fuel levels, location and capacity, driver behaviour, etc. in their optimization. The goal is to improve the company s route network, lower fuel cost, and decrease the of accidents Uber Isn t a Car Service. It s the Future of Logistics 7

8 Technology plays a Major Role Technology enables Move from Internet to E-commerce, Product manufacture to delivering customer desired products Logistics to E-logistics New technologies emerge not from new discoveries but from the recombination of existing technologies into new systems. New developments Co-evolve on demand with innovations in resources, supply chains, Institutions and delivery mechanisms. Logistics In India 8

9 Indian Freight Transport Industry Roads carry around 60% of the total freight transport volume Trillion ton km by road & 675 Trillion ton km by rail The Indian truck market is dominated low-cost trucks manufactured by local manufacturers. Only 10% of Indian truck operators own fleet of more than 25 trucks, and 1-2 %own between 200-1,000 trucks. 80 % of truck operators own less than 10 trucks. Majority of them are owner-drivers with a single truck. The Indian transport industry is organized by transport middlemen or goods booking agents for the small truck operators or owner-drivers. Manufacturing Clusters in Indian States 9

10 Logistics Performance in India Indian Infrastructure is poor as compared to developed and developing countries and is rated 54 /160 in The underlying Institutional problems Poor Hard and Soft Infrastructure Blind imitation of the infrastructure growth of developed countries rather than following market requirements Low Technology Penetration in inter-organizational management processes such as trade documentation Responsibility Fragmentation among government agencies Lack of 3PLs, Research and Talent in logistics Concentration on low cost labour ignoring ICT New Governance Model: Orchestration 10

11 Customs, Export & Inter-state Regulators Delivery Quality, Social, Green Issues WTO, FTAs, Trade facilitation Logistics & IT Service Providers, GPS Tracking Inbound, Outbound Reverse & Service Logistics Logistics Parks, SEZs, Freight Corridors DELIVERY SERVICE INFRASTRUCTURE INSTITUTIONS LOGISTICS ECOSYSTEM LOGISTICS SERVICES Vertical Based RESOURCES Infrastructure: Roads, Ports, Airports, Rail Universities, R & D Skill Training Finance & Insurance E-commerce Soft Infrastructure, IOT, Traceability, Social media Cross Docks Supply Hubs MRO Skilled Manpower Warehouses Cold storage Carriers Trucks, Trains, Ships The Logistics Mall 11

12 Orchestrator Business Model Planning, Coordination and Overall Responsibility Orchestrator Orders Payment End Customer Plans Operational Status Material Flow Supplier 3PL Contract Mfg 3PL Supplier 3PL Contract Mfg 3PL Execution Strategies at National, Vertical & Firm levels National Level: Readiness Physical infrastructure is only a third of the logistics requirement for efficiency. How much of the physical infrastructure is essential and can the ICT replace or substitute some of these. Develop high speed rail freight network with cross docking and distribution facilities along the path of goods flow. Develop soft infrastructure, Initiate research programs Plant locations are now at the forks and not at the hubs creating outbound logistics (Finished Goods) problem. Needs relook Industry Level: Standardization, Sustainable Business Models Food and groceries is 59.5% of the retail sector and 48 % of household expenditure. Improve the food supply chain & logistics. The truck market, where majority of operators are owner-drivers with a single truck should be organized as logistics mall social network. Firm level Social relationships, Risk mitigation, Governance 12