Digital transformation: a critical imperative for the logistics sector to stay relevant & succeed


As we emerge from a global pandemic, the world as we know it has significantly altered, promoting an environment of reevaluation, resilience, and risk-averseness. Industries across sectors are innovating and creating new products and services to cater to the changing needs of our growing populations. Advances in healthcare delivery, growth in eCommerce, and increasing dependency on technology across sectors are changing how we are operating at a fundamental level.

With increased impetus on building global and connected manufacturing hubs across the world, there is a large potential for particularly the logistics sector to widen its offerings at a global scale. It is this silent Digital Transformation that will redefine the logistics sector over the next decade. The pandemic has also prompted the logistics industry to build future-ready infrastructure that can respond to any disruption more swiftly. Thus, a responsive supply chain will be a combination of technology, speed, cost, and efficiency. Further, promoting agility within supply change management will counter the rapidly changing market and demand patterns.

In this context, it is imperative for logistics majors to acknowledge growing trends in the industry and create appropriate products and services to cater to these trends. A few relevant trends include:

Increase in Supply Chain Visibility: A recent report by PWC has stated that the ‘broad goal of Supply Chain Visibility is to collect better information about supply chain operations, improve efficiency, reduce risk, boost customer satisfaction, and increase profits.’ Through increased digitization of Supply Chain Management, this visibility is increasing and is being quantitatively monitored through data. Digitization of the supply chain offers organizations the ability to track their products and services in real-time, enhancing the experience for both the consumers and the sellers. With large logistics players focusing on digitizing their offer, several benefits are emerging for customers:

    • Efficiency in Demand and Supply planning
    • Increased customer satisfaction
    • Decreased costs through automation

Reduction in Lot Sizes: Several trends emerge from changing customer behavior. Reduced lot sizes is one such trend that has been facilitated through the growing demand for customized products in the market. As this demand for customized products increases, we are witnessing an increase in shipments, but a significant decrease in the lot sizes. This is particularly true for the manufacturing industry, as they continue to face customer expectations of customized products, faster time-to-market, and reduced defects. A recent report by PWC, also highlights that the goal of a ‘lot size of one’, where each product is manufactured to the specifications of a specific end-customer, may be achieved soon. The reduction in lot sizes cannot be discussed without touching upon the emerging trend of customized products. With more and more FMCG companies, offering customized products and services, the expectations of customers have significantly altered. Further, the pandemic has also increased the need for organizations to cater to customer needs. This trend will only become a reality if we as logistics players are able to transform our offering reduce the lead time and costs of such products. Once again, the role of digitization of the supply chain will play a significant role in enabling this change.

Diversification of Supply Chains: Supply chain diversification enables flexibility, which allows one to respond to changing market trends and customer demands. It not only helps to decrease backorders but also ensures meeting demands in case of supply shortage. Individualized sourcing from several different countries vs. mass sourcing from a few select countries, reduces dependency and increases the rate at which products can be sourced. Supply chain diversification mitigates our risk by making sure we have a diverse supplier base. In the rare occasion of an incident, a pre-sourced and qualified database of multiple suppliers will speed up the response process significantly.

As per IMARC Group, the global logistics market reached a value of $5.2 trillion in 2020 and looking forward, the market is expected to grow at a CAGR of 4.6 per cent during 2021-2026. This can only be achieved through digitization and automation of the logistics sector.

To keep up with these emerging mega-trends and ensure we are driving significant value to our customers, ECU Worldwide has introduced ECU 360, which delivers a customer-centric digital logistics experience that can perform end-to-end shipping services at the click of a button. Through this digitized platform, customers will be able to track both upstream and downstream flow of products and services, increase transparency, and derive a much smoother experience overall.