Supply chains face exceptional disruption due to increased difficulty from globalization and cross-border restrictions. There is a need for faster response times to customer feedback and increased focus on environmental sustainability.
These challenges have resulted in companies seeking to improve their supply chains through improvements in logistics. A successful business depends on a good supply chain and logistics, as they can make or break a company.
And as the world becomes more digital, supply chains must keep up with the latest technological advances. That’s why it’s so important to have a strong understanding of the everyday challenges faced in logistics. This article will explore five of the most common challenges and how to overcome them.
Common challenges faced in logistics and supply chain management
- Inadequate transportation infrastructure
The lack of integrated transportation system plans and infrastructure, like poor road quality and maintenance, government taxes, toll taxes, cross-border taxes, etc., has led to slow deliveries and high transport costs for the supply chain industries.
As per the recent study done by the dollar business group, The average productivity of a truck in India can increase up to 350-400 km just by reducing congestion. As a result, many e-commerce firms are interested in investing up to $2 billion in warehouse and logistics in the next three years.
2. Lack of Technology
The growing demand for e-commerce and consumer goods products has drastically increased the country’s need for warehouse and storage space. Technology can help organise warehouse layout, inventory management, capacity planning, logistics, etc. Logistics and supply chain management software like Locate2u is essential in improving sales and floor space.
With efficient use of technology and initiatives, the warehousing industry plays a pivotal role in the growth of the Indian supply chain system. Businesses have started using SCM software to make the process more robust and efficient. Innovative technology must continue to shape warehousing and logistics for years to come.
3. Unavailability of skilled workers and Truck drivers
According to a recent study, 27% of the trucks were idle due to a lack of drivers and projected that driver shortage will reach 50% in 2028. Hiring and retention of truck drivers remain an issue.
The growing deficit of skilled labour to operate logistics facilities has led to high logistics costs, delivery time, reliability, flexibility, and safety of a logistics system.
Therefore, the requirement to train drivers in the new and advanced skills regarding handling products, rash driving, truck capacity management, etc. can lead to improved logistics performance, higher profits and a well-knitted logistics system.
4. Government Policies And Restrictions
The complex tax policies put several hardships on warehousing and logistics companies in India. Compliance mandates have tightened, and logistics companies face the consequence of bottlenecks with increased regulations.
In addition, multiple State and Center taxes lead to considerable loss of time in transit on roads and also weakens the spine of the logistics network running through the nation as a whole.
SCM-friendly policies will also help expand logistics and broadband connectivity to relatively rural areas, thus reimagining the Indian Supply Chain as globally competitive.
In addition, the enactment of GST by the government has resulted in a seamless tax-credit system that does away with the duality and cascading effect of multiple taxes and significant cost reduction in logistics by almost 20%.
5. Issues in Tracking and Tracing goods
To improve product traceability, we need to optimize handling goods at various points in the supply chain.
The current supply chains rely on time-consuming, paper-based processes that lack transparency. Thus, making it difficult to manage and can often lead to mistakes.
Companies are increasingly investing in automated tracking software to see products and where they come from within the supply chain.
The significant issues of Inbound and outbound Logistics can be sorted by using RFID and GPS tracking devices to have real-time visibility of the current location of assets and reduce the risk of theft and inventory loss.
How To Improve Your Supply Chain with the Right Logistics Software?
The GDP growth index in other developed countries is around 7%, whereas, in India, it is about 13-14%. So if we lower the logistics costs by 4-5%, the benefits for manufacturers could be immense.
Adapting to change is something we need to manage by using efficient and reliable logistics management software to meet customer expectations.
Reliable SCM software provides visibility of goods like order transit visibility through tracking driver location, Proof of Delivery, etc. and also meets the requirement of two-day or same-day delivery.
Technology and Automation in everyday processes will lead to cost savings and help companies achieve faster decision-making and improved quality control. In addition, it will cut down on time spent on manual tasks, thus ensuring long-term success and profitability.
However, despite these challenges faced by the supply chain and logistics industry, India has the potential to build the best supply chain in the world.