The future of logistics rests on the foundation of sound SaaS, Business Management and Academia. While the three – SaaS, Business management and Academia, have common goals, yet their approaches could be so different from each other that they might be working at cross-docks. In order to hold these three dimensions of logistics business together, the need for a Centre of Excellence for cloud-based solutions in Logistics was felt by industry stakeholders. The center of excellence for cloud-based solutions in Logistics has been initiated by Kale Consultants Ltd, a leading SaaS based solution provider to the Travel & Transportation industry, and Chartered Institute of Logistics and Transport (CILT), the pre-eminent independent professional body for individuals associated with logistics, supply chains and transportation. The newly formed CoE personifies the ideology that Kale and CILT as organisations practice – to take an active role in the betterment of the Transportation & Logistics industry and the people in the sector.
Kale has engaged research as a proactive tool to understand industry challenges, concerns and outlook in its quest for robust industry solutions. Taking up the mantle of a responsible industry player, Kale has been able to reveal hitherto unknown facts and a collective thought for the industry.
As the first study of its kind in scope or depth, TAIL is an attempt to arrive at a simple integrated measure of technology adoption in the Indian logistics industry. The index serves as an industry benchmark for logistics companies to derive their technology effectiveness and business competitiveness. For the study, a total of 69 asset-based players and 166 non-asset based players were surveyed. Asset-based players consist of shipping lines, airlines, railways, terminals, warehouses, CFS/ICD whereas non-asset players consist of pure-play freight forwarders, pure-play CHAs, full-service freight forwarders, 3PL companies, full service 3PL companies, 4PL companies and special category LSPs.
TAILTM captures information on how much technology do logistics firms use, how they use it and how they manage technology in a single comprehensive quantitative measure. It combines the dimensions of digital penetration, sophistication and maturity of adoption into a simple, easy-to-use index that can be used by firms to benchmark their technology progress. It goes a step beyond in corelating the level of adoption with the business benefits that have been experienced by the Logistics industry. Study of TAIL measures in conjunction with various business parameters such as revenues, staff size, productivity, vintage of firm, scope of business, geographic coverage, and digital spends. And, digital criticality measures have established the close correlation of technology adoption with business performance. TAIL study gives some interesting insights and findings. TAIL measure placed 15% of all non-asset based firms above the group average of 45.05 while over a third of asset-based firms made it above the average for these firms at 52.06 indicating a higher rate of adoption amongst larger firms. TAIL measure has a strong fit with other business variables although not so with age of firm or Capex spends. This vindicates the validity of the measure. Determining TAIL score for your organization can greatly assist the top management in strategic decision making. To facilitate this, Kale has structured the study and score along with its interpretation in the form of a report.
India’s emergence in the global business landscape has given a boost to the domestic logistics industry like never before. Taking cognisance of this fact, the government is also taking various steps to boost the industry’s potential by announcing plans to spend $17 billion on transportation infrastructure by 2010. Plans are also afoot to set-up a council to build efficiencies in the sector. The potential has resulted in a steady increase of the number of players in the industry. Smaller players are setting up shop, existing players are consolidating, and larger players are setting up centres of excellence. There is a lot of activity happening in this highly fragmented market and the trends are quite revealing. 3PL players are growing at over 25%. Small and medium family-owned enterprises are growing in stature in the integrated logistics space. Global majors have committed to huge investments for their Indian operations. PE funds are increasingly eyeing the sector.
The sector has already attracted investments of over Rs. 20,000 Crores in the first half of 2008. Overall, there is one realisation – what will eventually differentiate the also-rans from the successful players is the effective use of technology. Technology is expected to remove gross inefficiencies in the operations and will soon become the business driver for the Logistics companies in India. Recognizing this dire need, “The Technology Survey for Indian Logistics Industry – 2008” was commissioned by Kale Consultants to Feedback Business Consulting Services Pvt Ltd. Feedback is a premier business-to-business research-based consulting firm, operating in India since 1985. Feedback has enormous experience in research engagements across diverse industry verticals and sectors. This report presents the key findings of the survey and provides valuable insights into the future of technology in the Indian Logistics Industry.
The key objective of the study was to assess the market dynamics and the technology adoption in the Indian Logistics market. The study relied on a supply-side primary survey route – interviews with end users, suppliers, and industry influencers tech solutions to arrive at current and future spend levels in their respective businesses. In addition, telephonic interviews with the end users were carried out across other B class cities. The key objective of the study was to understand the dynamics of the technology adoption in the Indian Logistics Industry. This study particularly focused on Assessing the market size and market segments, Current state of technology adoption in the Indian logistics industry, Demand drivers for logistics tech solutions and future growth in the use of technology by the Logistics industry. Over 500 respondents across 140 organisations in 10 cities (Delhi, Mumbai, Hyderabad, Pune, Bangalore, Chennai, Vizag, Kochi, Kolkata and Paradip) participated in the survey.
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