For a layman logistics would mean anything related to computer or to keep everything ready for the smooth running of activities and events. Both of these cannot be termed wrong. Logistics can be used in both ways according to the use. However, here we are discussing logistics in a different way. Logistics refers to the maintenance of belongings one possesses. More specifically, contemporary usage relates to the organization and working of complex operations with people system rather than machine system.
From the business point of view, it is to have correct number of items which is required for a specific purpose that needs to be delivered on time to the right person and at the right place at promised price regardless of any situation. This is one of the most important thing for every organization to maintain good faith and continue for the long run. This definition gives us a clear idea of whole working of an organization regarding logistics. It shows for a logistics to run in an organization, they need to meet the demand of the people according to their need and this applies from major business operations to a one man operation like someone ordering something online and expect them to reach their doorstep soon. This would sound very easy to the customers, as the product reaches their doorstep. However, it is a mind boggling task for the logistics department of the organization.
In the competitive world with the increasing global economy and market with physical and digital connectivity through which world is becoming smaller day by day, the only way to sustain the competition is keeping the customers happy and achieving a good, secure position in the marketplace where one operates.
Flying Penguin Enterprise (FPE) one of the distributor which delivers goods such as spare parts, consumables, equipment, tools and accessories to its customers in UK and all over various other places. It is based in Bedminster and its customers which includes police, fire, ambulance services, local authorities, utilities and corporate clients, UN and other various export customers. Nick Wilton, Managing Director of FPE said,“For us logistics infrastructure is fundamental to our business. It is a self-evident truth that having the spare part the client needs is useless without the capability to deliver that part, on time, intact, where it is needed. We aim to achieve levels of indestructible reliability that Kalashnikov would have been proud of.”
With large number of client worldwide, Flying Penguin Enterprise have their own fleet of delivery vehicles for local customers and deliveries. Having own delivery vehicle for their client in Bristol area, they also need logistics arrangements done along with extensive use of large range of logistics specialist to check and look after the deliveries across UK or more difficult and important work such as delivering to UN mission in Darfur, Kabul, Mogadishu or anywhere else. However, with growing demand and exports to the international client, international shipping also called freight therefore is something which is growing and it is very important for any logistics department of any organization.
Talking about India, with the growing number of startups and new organizations, there has been increase in the demand of people. Also with the changing time people don’t have time to go to the shops so they prefer good being delivered at their doorsteps. The startups are busy increasing their network and clients and the established organizations are indulged in satisfying their clients.
One of the example of an organization looking after logistics is Quickdel. It was established in late 2011 which delivers to 105 to 107 cities. It has over 80,000 to 1,00,000 shipments per day which is huge for any organization. They target to cross Rs. 150 crore by March 2015 growth. Meanwhile, older courier companies like Blue Dart and DTDC that were established almost six years ago have taken over Flipkart slowly by forcing it to start its own logistics services eKart.
Besides business to business (B2B) deliveries there are also E-commerce deliveries. E-commerce deliveries are gaining more popularities these day due to its portability and wider coverage. It has made the life of consumers very convenient after being started. In B2B there would be evening pick-up and morning deliveries and the time with customer would be shorter. It is present only at the commercial centers and standard deliveries are usually documents. However in E-commerce deliveries, they handle parcels that are in huge bulks and valuables too. They have deliveries open round the clock. They spend more time with their customer which is very helpful in building clients and keeping them happy. It can be customized and it needs to be present close to populated residential areas.
With the growth in number of clients and work, the challenges has been increasing too for all the logistics players. Some challenges are different tax structure, poor infrastructures, capital constraint, difficulty in gaining trust are some of the challenges faced. Also the focus on investments and fast expansions has taken over profitability. Thus margins in e-commerce are better by one to two percentage than B2B. It is helpful but it is not completely like building a completely new business.
By Pavani Chennamasetti
Views presented in the article are those of the author and not of ED.