What aspects of the logistics industry will change completely with the advent of emerging technologies?
Logistics Industry is still very unorganized sector in terms of commitment, operation levels, trust and payment. The whole industry works on the premise of truckers or fleet owners knowing the brokers and brokers knowing key people in procurement of the enterprise to provide loads.. Therefore, there are smaller groups of people all across India who channelize their contacts to get transporters / fleet owners to get loads The bulk of the road transport industry is a B2B industry. The fleet owners and transport companies are in huge numbers, but penetration of technology across transporter/ fleet owners is low. .
The biggest challenge for anyone entering this industry as an aggregator of transporters or as a tech enabled transporter will be challenged to deal with the customers having long cycle of payment- ranging anything between 30 days and maximum being 130 days. If that cycle isn’t reduced the transport industry won’t grow to a large extent and new players who can bring in the technology to aggregate may not find it lucrative.
However, leaving aside the challenges and if we talk about the emerging technologies that might change the logistics industry in itself will be through the blockchain technology. The smart contract generation between a transporter/fleet owner/service provider, the customer, the bank and the technology service provider with respect to Service Levels and payment will be a game changer. It will become a much more organised and will channelize new ways of operating the industry. That would be the biggest disrupting and enabler reality which will bring in transparency and efficiency across the value chain.
The other emerging technologies that will change the logistics sector will be through advent of smart trucks. The smart trucks means connecting various sensors deployed on the truck with respect to weight (empty and loaded), tyre sensors, engine and oil sensors, driving behaviours including night driving etc and these analytics rolled into one dashboard with auto/immediate alerts to driver and owner will change the way trucks drive on Indian roads. Overloaded trucks, speeding trucks etc will never be seen on roads if we built smart truck technology all embedded in one.
We will see embedded technology, which encompasses everything for a truck to move on the road with a driver and give you real-time analytics of how the truck is moving, It will bring in a lot of efficiencies for the truck owner, enterprises, on safe driving behaviours and including longevity of the trucks. The driving behavior analytics can be linked to license renewal as well as the new-age trucks will be more sensor- and technology- driven. Though I don’t foresee driverless trucks in India, as our country is not geared to that extent, unless there are dedicated lane.
I am also seeing some trends with respect to future- of electric vehicles/trucks, which are sub-two tonne load factor for facilitating intra city movement, thus reducing the carbon footprint for the city and yet move goods efficiently with low cost of transport.
How will the digitization of warehouses and delivery automation pan out in the logistics sector?
The warehousing operations will become a massive portion of the entire delivery mechanism for the industry. The government vision of Bharat Mala and Sagar Mala project, which will be catering to inter-model transportation will drive efficiency across the logistics value chain.. As per Govt of India blueprint for 2025, they have planned for 26 intermodal transshipment parks. These parks will be connected via waterways, rail port and roads. these freight parks will see inter exchange of goods and materials. These are places that will see a huge amount of technology and automation . I foresee drones and robots operating the warehouse. You would have manless warehouses in the future. The moment a shipments comes into the park, the technology will determine and will identify a particular bay for shipment to unload automatically and this information will be passed on to the the smart truck. The robots will then remove your goods and place it in the respective bay. If a customer needs a warehouse space for five days, the drone will identify a space and give you a direct feed. The use of drones has to be done extensively at the warehouse level to bring in transparency and efficiency. The use of robots and drones will be implemented in large warehouses for it to be effective, as empty spaces can be identified and could be given onto a platform where customers can book empty space in advance or instant. And all of these technology interventions will undergo massive revolution over the next decade and I can see the impact happening in small to large warehouses and inter-model exchange freight parks
With so many changes coming in, how do you think the role of CIO will change and how will organizations perceive the role?
I have seen both ends of the spectrum in terms of both enterprise level in multinational organization and now in startup stage. If the organization doesn’t recognize the fact that technology will be the central fulcrum tomorrow, then they will not be able to identify a CIO who would lead them. In today’s world, technology is driving the growth plan for an organization, but there are challenges too where a CIO doesn’t get his due recognition in the organisation.
CIOs need a larger mindset change using the technology for the enterprise growth plan. They have always been at the receiving end of getting the demand from the business rather than defining what the technology can do for business growth and delivery. They have never been at the forefront of the business and recommending a technology to grow the business. The CIO needs to wear a business hat to suggest technology interventions for growth.
The problem with CIOs is they put in a technology and don’t measure it. CIOs have to define the metrics towards business Top Line or Bottom Line growth and be at the forefront of providing it during Management Meetings. The CIOs are traditionally inclined in providing a technology rather than asking themselves if this will give a growth to business