India’s logistics sector is all set for an exponential growth led by GDP revival, impending GST implementation, ramp up in transport infrastructure, e-commerce penetration and ‘Make in India’ campaign.
However, at present, the logistics providers are facing quite a few teething problems.
Skill issues exist in varying degrees in all sections of logistics and the cracks are widening at a monumental pace. This lack of focus on developing manpower and skills for the logistics sector has given rise to a wide gap in the numbers and quality of manpower in the sector. In the road sector, skill issues are widespread across the board.
“Lack of skilled resources will pose a challenge in the advanced technology adoption. The need of the hour is to keep the efficiency levels high with continuous training,” says Saunak Ghoshal, Partner - Technology Consulting, PwC India.
On the same lines, Shreesh Patwardhan, CIO and VP IT, Dynamics Logistics, said that people from his organization are not technologically well equipped. Making them select the right combination of hardware and software along with increasing their knowledge is a pressing concern. At present, they are trying to benchmark with the people who are doing well in the industry. “We are watching new players in the market whose technology can be put to use to increase efficiency,” says Patwardhan.
Even Anjani Kumar, CIO of Safexpress, believes that training the employees on a new mobile application is a herculean task. He says, “this year, to vanquish all the obstacles, we are creating training videos, customer -focussed teams, and newsletters.”
And there’s more.
There is a problem of retention of the workforce. “We are de-risking ourselves with the manpower and training issues by outsourcing many activities within IT in a strategic manner. We have identified many areas where outsourcing will deliver significant value over keeping in-house and it will be our continued focus in 2016,” Satyajit Sarkar, AVP-IT, DTDC Courier & Cargo.
Low IT penetration and a highly fragmented market with below par infrastructure is resulting in acute operational insufficiencies. The top agenda for the logistics industry is to guarantee 24x7 network connectivity and maintain uptime.
Kumar feels that the network connectivity in tier 2, 3 and 4 cities is a major concern. “The cost of bandwidth needs to come down, so that more data could flow to the system to do analytics,” said L Ramanand Bhat, Chief Technical Officer, VRL Logistics
Highlighting Kumar’s point, Sarkar says, “there is no consistent telecom service in tier 1 cities and the condition in tier 2, 3 and beyond is pathetic. Having said that, it is a critical problem in our industry, as we cannot get seamless connectivity. He said that there has to be a separate ministry to handle logistics & Express Industries.
He added: “A focused and international benchmark driven policy on telecom and mobile network spectrum allocation is expected from the government as all the players are facing huge capacity issues due to narrow spectrum bandwidth.
The road infrastructure is one of the biggest challenges faced by the logistics industry and a key deterrent to its growth. On that note, Sarkar says, “The road infrastructure in our country still has to go long way as this affects our service commitment & increases failure. At the same time, it adds up huge vehicle maintenance overheads.”
Here’s another challenge: Suppose a consignment needs to be dispatched from Bangalore to UP. The consignee gives an electronic document in the form of a permit. At the border, the consignee documents are filled out manually, where mistakes are bound to happen. Bhat says, “If an API link is given, the information could be uploaded directly on to their server. This adds to the operational efficiency.”
Keeping the data secure is a lifeline in the logistics industry. Data vulnerability increases the risk of security threats that could cause major damage to the logistics company’s standing.
Lack of skilled resources will pose a challenge in the advanced technology adoption.
A data breach influences numerous areas of a logistics organization as it has lawful concerns, damaging day-to-day business actions. Data confidentiality and security can become a crucial competitive differentiator, which means logistics companies that fail to implement data security tactics, risk falling behind their challengers.
“Since the efficacy of the operations depends a lot on the usage of technology, any external attack on IT can leave the organization quite paralyzed. Appropriate software and hardware security in terms of Firewall, NIPS (network intrusion protection system), NIDS (network intrusion detection system) are essential in the IT Infrastructure,” says Ghoshal.
Patwardhan stressed on the fact that security is a big challenge for them as they don’t know how secure the transmission of the data is from the devices to the server. After hosting the application on the cloud, they will update the firewall and go for Mobile Device Management.
Similarly Kumar says, “We are enhancing MDM (mobile device management) to do containerization of the application, looking at BYOD (bring your own device), and adding web application firewall in 2016.”
Even Ghosal feels that keeping the data secure will be a challenging task. There is a type of architecture that is designed for devices and people have to take those into consideration while having their devices enabled.