Issue link: https://maltatoday.uberflip.com/i/1080741
S2 maltatoday | SUNDAY • 10 FEBRUARY 2019 SHIPPING & LOGISTICS SUPPLY chain management forms the backbone of any business, and logistics is one of the most integral components of the same. There is a lot more to logis- tics than just getting things transported from point A to point Z. The process involves several intermediary components and steps including design, planning, control, monitoring and implementation, which helps derive customer value. In recent times, the logistics industry has become frag- mented, volatile and unpre- dictable, and its role in the global landscape has been varying from being just an op- erational aspect of the value chain to an increasingly stra- tegic one. This shift underscores the need to shift towards an adaptable and effective road- map reflecting the emerging Industry 4.0 and e-commerce, changing market, and cus- tomer dynamics. The emergence of Industry 4.0 The advancements in tech- nology are transforming busi- nesses across all industries and sectors. The emergence of the fourth industrial revolution or 'In- dustry 4.0' has led to an ad- vanced interconnection and automation of all facets of manufacturing and distri- bution through digitisation and implementation of inter- ventions like the internet of things, blockchain, big data, cloud computing, etc. across all value chains. As logistics is the fulcrum of the value chain, there is the need to reshape the industry to create a smart digital sup- ply chain. By incorporating new-age digital tools, the efficiency can be increased multifold and also save significantly on costs. This is because, with more generation of data, there will be an ease of predictability that would help the logistics industry be ready to cater to the probable market and end- consumer demands. Furthermore, this would help in the improvement of planning and managing in- ventory as well as warehouse fulfilment through automa- tion. Even for the last-mile con- nectivity, there are many ben- efits of technology, including real-time tracking and instant notifications, drone delivery, etc. Therefore, there is a need for rapid incorporation of tech- nological advancements to optimise operations and max- imise efficiency in the logisti- cal supply chain landscape. The rise of e-commerce and changing customer expectations With increasing digital pen- etration and a rise in the own- ership of smartphones, there has been an explosive growth of e-commerce. The global e-commerce in- dustry is projected to grow at an annual CAGR of eight per- cent to reach a market value of $2,700 billion by 2023. The growth has been so phe- nomenal that e-commerce has emerged as one of the main growth drivers of any nation's economy in recent times. E-retail is an integral com- ponent of e-commerce and has been remarkably trans- forming the retail landscape. The e-retail industry is fueling customer expecta- tions, which are now dynami- cally changing. Whether it is an individual or a business, customers now expect a lot more than just the basic 'right delivery at the right place in the right condition'. They want the delivery ser- vices to be customised to a quicker and more flexible al- ternative without having to spend more. The unprecedented rise of e-retail, supplemented by in- creased customer expecta- tions, has inevitably put the logistics sector under the im- mense pressure to deliver bet- ter end-to-end solutions at lower costs. Since an integration of data analytics, smart warehous- ing solutions and social sup- ply chains is the need of the hour, the express segment of logistics has been gaining mo- mentum, increasingly becom- ing an indispensable part of the e-retail industry for order fulfilment. In fact, many e-retail giants like Amazon have begun es- tablishing their own captive logistics units for the fulfil- ment needs. This has laid even more em- phasis on the need for logis- tics industry players to rein- vent their ways and processes in order to provide express services for enhanced cus- tomer experience. From 'integrated' to 'dynamic' Logistics companies are now having to make a decision be- tween localisation and inte- grated globalisation. This challenge is more prev- alent in developing countries that are struggling with un- stable politics and economies, insufficient infrastructure, a shift in trade patterns, and limited application of techno- logical disruptions. While the traditional ap- proach used to be a 'one-size- fits-all', the volatile nature of the emerging markets has de- veloped the need for multiple supply chains, each custom- ised to the specific demands, and flexible enough to adapt to robust changes. This has led to the need for a paradigm shift from 'inte- grated' to 'dynamic' when it comes to the operational as- pect of the industry. This refers to the creation of a flexible and responsive ecosystem of the right people, processes and technology. Designing and implemen- tation of such an ecosystem of decentralised operations would allow more effective handling of geographic, taxa- tion and technological dis- crepancies. Therefore, this shift to a dy- namic and decentralised net- work would help the logistics industry gain considerable ad- vantages in both its growth tra- jectory as well as its contribu- tion to the holistic value chain. Companies witness a sea change to adapt to ecommerce needs The e-retail industry is fuelling customer expectations, which are now dynamically changing. Whether it is an individual or a business, customers now expect a lot more than just the basic 'right delivery at the right place in the right condition' The unprecedented rise of e-retail, supplemented by increased customer expectations, has inevitably put the logistics sector under the immense pressure to deliver better end-to-end solutions at lower costs With more generation of data, there will be an ease of predictability that will help the logistics industry be ready to cater for the probable market and end-consumer demands