June 22, 2023 | Supply Chain

The supply chain industry plays a critical role in the movement of goods and services across India. It encompasses a network of organizations, people, activities, information, and resources involved in the production, distribution, and delivery of products to end consumers. With the advent of technology, innovative practices, and the proliferation of e-commerce, the sector has become more efficient, transparent, and cost-effective. The traditional Supply chain companies in India models that once powered India’s economy are now giving way to more interconnected and intelligent networks that utilize analytics, automation, and artificial intelligence.

The Indian supply chain industry has experienced significant growth in recent years, thanks to these changes. In 2020, the industry was valued at $225 billion, and this is expected to rise to $637 billion by 2025. India’s e-commerce market is projected to be worth $200 billion by 2026, and the logistics market is expected to reach $307 billion by 2026. India is also undergoing major infrastructure improvements to support the growth of the supply chain industry, with the government investing over $1 trillion in infrastructure development over the next five years.

However, despite its large size, the industry is still plagued with several challenges, such as inadequate infrastructure, inefficient processes, and limited adoption of technology.

  1. Infrastructure: One of the biggest challenges facing the Indian supply chain industry is inadequate infrastructure. India’s extensive network of roads, railways, and ports is not up to par when compared to developed nations. This puts a strain on the industry as goods often get delayed, leading to higher costs and lost revenue.
  2. Efficiency: Another challenge is the inefficiency of processes. Due to a lack of standardization, the supply chain industry in India often relies heavily on manual processes that are prone to errors. This leads to delays, increased costs, and lower-quality service for customers.
  3. Adoption of Technology: Finally, there is a limited adoption of technology in the Indian supply chain industry. Many companies still rely on outdated systems that do not offer real-time data or automation, making it difficult to optimize operations and improve efficiency.

Despite these challenges, the Indian supply chain industry is evolving rapidly, with several key trends impacting the way businesses operate. Let’s examine some of these trends:

  1. E-commerce and Last-mile delivery: the Indian supply chain industry is becoming more technologically advanced, allowing for faster and more efficient logistics. With the rise of e-commerce, companies are investing in technology and logistics platforms that enable them to track inventory and shipments in real-time, allowing for faster delivery times and improved customer satisfaction. E-commerce has facilitated the development of parcel logistics, leading to the digitization of small and medium-sized enterprises. This is particularly crucial in rural India, where physical infrastructure has historically been lacking. The integration of e-commerce platforms with logistics providers has also led to the emergence of new business models and partnerships, further transforming the supply chain landscape in India.
  2. Industry 4.0: The Indian supply chain industry has embraced Industry 4.0, which is transforming traditional factories into smart factories. The integration of new technologies like the Internet of Things (IoT), artificial intelligence, and machine learning is allowing for greater automation, leading to reduced costs and faster production cycles. This has enabled manufacturers to increase their output while maintaining consistency and quality. Digital platforms and automated systems enable real-time tracking of inventory, optimize route planning, and improve overall supply chain visibility.
  3. Reverse Logistics and Sustainability: As the focus on sustainability and environmental responsibility increases, the concept of reverse logistics has gained prominence in the Indian supply chain industry. Reverse logistics involves the efficient management of product returns, recycling, and disposal. Companies are investing in reverse logistics infrastructure and partnering with specialized service providers to handle product recalls, reduce waste, and maximize the value of returned products. This not only improves sustainability but also helps in maintaining customer trust and loyalty.
  4. Omni-channel: The rise of omnichannel retailing has led to the development of new supply chain models that bridge the gap between online and offline sales channels. Companies are now investing in sophisticated inventory management systems that enable them to seamlessly integrate their physical and digital sales channels. For example, they can quickly locate products in a warehouse and fulfill online orders with the same inventory that would otherwise have been used for in-store sales.
  5. Blockchain Technology: Blockchain technology, with its decentralized and transparent nature, has the potential to revolutionize supply chain operations in India. It can provide end-to-end visibility, traceability, and security to the movement of goods across various stages of the supply chain. Blockchain-enabled platforms can streamline documentation processes, prevent counterfeit products, and enhance trust among supply chain partners. Several pilot projects and initiatives are underway in India to explore the application of blockchain in supply chain management, and the results are promising.
  6. Warehousing and Inventory Management: The demand for efficient warehousing and inventory management solutions is on the rise in India. To meet this demand, companies are adopting modern warehousing practices such as the establishment of multi-modal logistics parks, the implementation of warehouse management systems, and the use of robotics and automation in warehousing operations. These innovations are enabling companies to optimize space utilization, improve inventory accuracy, and reduce operational costs.
  7. Integration of Supply Chain Networks: The integration of supply chain networks is another significant trend reshaping India’s supply chain industry. Collaborative platforms and digital marketplaces are connecting various stakeholders in the supply chain ecosystem, including manufacturers, distributors, retailers, and logistics providers. This integration is fostering transparency, collaboration, and seamless communication among different players, thereby enhancing the overall efficiency of the supply chain.
  8. Globalization: It has played a crucial role in transforming the Indian supply chain industry. India has emerged as a key player in the global economy, with companies outsourcing their operations to the country to take advantage of its lower costs and large pool of qualified workers. This has led to the development of sophisticated logistics networks that connect India with major global markets. Companies are also investing in supply chain resilience to mitigate the impact of global events like the COVID-19 pandemic.

The trends discussed above are having a profound impact on the Indian supply chain industry. Here are some of the ways they are changing the way India moves:

  1. Efficiency: The adoption of IoT solutions, automation, and blockchain technology is helping improve the efficiency of the Indian supply chain industry. Real-time data, automation, and transparent records of the movement of goods are leading to faster and more efficient deliveries, reduced wastage, and improved customer service. Additionally, the rise of e-commerce has forced businesses to invest in last-mile delivery solutions, further improving the efficiency of the supply chain.
  2. Innovation: The adoption of new technologies has also led to innovation in the Indian supply chain industry. Companies are now experimenting with new solutions, such as drones, robotics, and autonomous vehicles, to improve efficiency and reduce costs. This has led to a more dynamic and innovative industry that is constantly evolving.
  3. Competition: Finally, the trends in the Indian supply chain industry have led to increased competition among businesses. Companies that are able to adopt and leverage new technologies are gaining a competitive advantage over those that are not. This has led to a more competitive industry that is focused on providing the best possible service to customers.

The supply chain industry in India is experiencing a significant transformation due to increasing consumer demands, technological advancements, and innovative practices. Companies are Digitalization, automation, e-commerce, last-mile delivery solutions, reverse logistics, and blockchain technology to create more efficient and sustainable supply chains. These innovations have improved operational efficiency, reduced costs, enhanced customer satisfaction, and promoted sustainability. As India moves towards becoming a global economic powerhouse, it is crucial for businesses to embrace these supply chain innovations and adapt to the changing landscape. By doing so, they can stay competitive, meet customer expectations, and contribute to the overall growth of India.

The above discussion also led us to the conclusion that the emergence of 3PL/4PL providers contributed to the remarkable transformation of the supply chain industry in India. Therefore, It is suggested that the organization collaborate with top supply chain companies in India that offer end-to-end supply chain solutions, best-in-class technology, and supply chain expertise.

TVS Supply Chain Solutions is one the top supply chain companies in India providing integrated supply chain solutions. For the last 15 years, TVS SCS has managed large and complex supply chains across multiple industries in India and selected global markets through customized tech-enabled solutions. Its wide warehousing network of 19.5 Mn Sq. Ft. space and ability to offer end-to-end transportation allows its customer to avoid capital investments on operations and concentrate on their core competencies.

TVS SCS provides specialized solutions to reduce complexity in customer’s supply chains by using technology, data analytics and execution experience to offer key solutions such as accurate demand forecasting, inventory planning and production, procurement management, network optimization, visibility, and supply chain agility to handle evolving needs.

POSTED ON June 22, 2023