Human-tech equation: Navigating India's evolving supply chain

The Indian logistics and supply chain industry, projected to grow from USD 300-billion to USD 500-billion in the next five years, is undergoing a profound transformation. Fuelled by technological advancements and soaring consumer expectations, the sector is shedding its image as a high-cost component of the GDP, moving towards becoming a global benchmark for efficiency.

Pillars of transformation: From optimisation to IoT

The current modernisation of the supply chain is built on four core technological and operational shifts. Gajanan Patil, chief of operations at H&H, highlighted these, beginning with process optimisation and improving fill rates. The next crucial body in this phase is the Internet of Things (IoT).

"We can actually track everything from the factory to the customer with IoT. Be it delivery or be it the cold chain," Patil noted, emphasising its criticality, especially in sectors like dairy (citing Parag Dairy). This end-to-end visibility allows operators to move from reactive management to proactive problem-solving.

Thirdly, the factory and warehouse are being redefined by advanced warehouse management systems (WMS) and automation like automated guided vehicles (AGVs), which retrieve material fast and reduce 'tag time'. Lastly, the rapid rise of eCommerce is enabled by micro stores and distributed fulfillment centres, ensuring people get their things faster.

The workforce: Bridging the skill gap

Despite the technological rush, people remain the backbone of the business. Vijay Nagariya, vice president of supply chain and organised retail at Drums Food International, pointed out that the workforce is undergoing significant changes driven by technology and a skill shortage.

"Technological innovation or automation is changing the skills required to do the job," Nagariya explained. The shift is fundamental: routine functions like manual demand forecasting are now automated by big data and AI. The workforce needs to evolve from merely working on spreadsheets to analysing data and deriving insights.

Nagariya stressed that the industry needs people with analytical skills and problem detection and solving skills, as repetitive task skills are becoming outdated. Furthermore, the onus of upskilling falls on both companies and educational institutions. He added that the industry must also change its perception as a tedious field, and companies must proactively manage the new generation's expectations for engagement and progression.

The last-mile: Urban density and human errors

The last mile of delivery in India presents a unique dichotomy: the high urban density is a blessing for quick commerce, while the varied geography and lack of training present persistent challenges.

Manish Parmar, vice-president, supply chain, process excellence and ESG at Country Delight, detailed the success of quick commerce players, noting that their models, which rely on owning and operating dark stores and last-mile fleets, have delivered an amazing customer experience of 10-minute delivery. This has, however, created a culture of instant gratification.

Parmar defined three working models: the quick commerce model, the next day/subscription model (which allows high demand predictability and can club 40 to 50 orders into one delivery run), and the traditional eCommerce model combining owned and third-party logistics.

However, Sudhir Jain, senior vice president of integrated supply chain and people at Bira 91, brought the conversation back to the ground realities, highlighting a critical failure in the system: the human touch. He recounted multiple instances of delivery boys failing to read apartment addresses correctly, saying, "This is basic training that I see missing."

Jain argued that in the race for technology, organisations are missing the basics. "The quality of service also needs a lot... It is not a skill. A person who is delivering at your home, at least, should be able to read the address properly," he asserted, suggesting that the current faceless, nameless business is hurting customer satisfaction.

Sustainability: From buzzword to operating model

Sustainability, once merely a compliance exercise for ESG reporting, is now an integral operating model. Patil confirmed this evolution: "It is not the buzzword. It is the future. It is the operating model." He cited the growing adoption of EVs in logistics, noting that they are increasingly available at the same cost as their fossil fuel counterparts.

Nagariya expanded on this, stressing that sustainability is not just about EVs but about the optimum use of resources. He proposed that incumbents and startups must collaborate to leverage spare capacities in cold chain and warehousing, thereby achieving cost sustainability and overcoming the mindset that sharing infrastructure will lead to losing data or market share.

Parmar noted that the challenges inherent in the supply chain, like high return rates in eCommerce (roughly 30%) and the fact that 60 to 70% of available cold chain capacity is currently unutilised, are massive opportunities for startups. Solutions like EV-based reverse logistics and deploying frugal, solar-powered cold chain systems in Tier 2 cities and villages are essential.

The underrated lever: Amplifying people

Ultimately, the most underrated lever in operational logistics is people. The industry consensus is that technology should not replace the workforce but amplify its abilities.

Parmar suggested using assistive technologies like AR/VR devices to guide delivery partners or ensure proper vehicle utilisation. Jain concluded that the focus should be on improving the qualitative aspect of technology and people, rather than rushing to adopt every new tool.

Nagariya summarised the essence of the customer experience: "We need to focus more on the front end rather than just the back end... The most underrated lever in operational logistics is customer visibility to the customer type. Managing customer expectation." By using technology to engage the customer with timely and accurate information, companies can reduce anxiety and save on the cost of failed deliveries.

The path forward for India's supply chain lies in finding the right blend of technological acceleration and human-centric training, ensuring that the country’s talent is properly equipped to make the industry a global benchmark.