In a rapidly changing commercial and social environment, some organisations are born agile, some achieve agility, and some have agility thrust upon them. In response, a new organisational form is emerging that exhibits a transparent business model to suppliers, investors, and consumers and allows to move forward and exceed the expectations of those relationships. In a riveting conversation, Uday R Sharma, COO, Spoton Logistics explains Upamanyu Borah, how the five trademarks- Strategy, Structure, Process, People and Technology have enabled them to balance stability and dynamism and thrive in an era of unprecedented opportunity.
How has the pandemic changed the nature of your logistics system and processes? Is it restraining you from serving your customers effectively?
The pandemic had impacted service-level agreements (SLAs) for a brief period due to factors well beyond our control. As lockdowns ease out and normalcy slowly returns, we are getting back to pre-COVID operation levels.
On a positive note, the pandemic has reinforced our belief in driving business efficiency and agility through technology-centric operations. Consequently, planned investments in artificial intelligence (AI), augmented learning, warehouse automation and robotics, and predictive analytics have now been accelerated. This is providing a compelling edge to our operations
The pandemic also exposed certain operational dependencies and performance variables that impacted SLAs adversely. Weaving in these scenarios into our AI engine will help better plan for future disruptions.
What were the best- and worst-case scenarios, and how was the business equipped to cope with the volatilities?
The months of March and April were the most disruptive in terms of service delivery. The confusion created due to sudden enforcement of lockdown, stoppage of truck movement and resultant plight of unskilled labour hit us hard.
Our worst case scenario was not being able to predict fulfilment of SLAs to clients during the first few weeks of the lockdown.
Our ground teams kept on working tirelessly behind the scenes. They coordinated with the concerned authorities to expedite permits to pickup/deliver essential goods, provided relief to stranded drivers, ensured safety of stranded consignments, and assisted pickup/delivery partners in reconnecting disrupted networks.
Looking down the road, what do you think are the trends influencing 3PL services in India? Where do you see significant gaps between what shippers are looking for today, and what the logistics industry offers?
The shift to logistics automation is driving growth of third-party logistics (3PL) in India. The growing adoption of cloud-based software, innovations as a result of more connected technologies that use application programming interface (API) to integrate into transportation management system (TMS), and ongoing push to improve information sharing and transparency across all levels of logistics operations will further drive customers to embrace 3PL wholeheartedly.
Modern day shippers look for constant supply of reliable carriers real-time insights. They also want extensive visibility into the consignment’s journey at the piece level.
Only a handful of companies are able to support what modern day shippers need.
Other than fostering general business growth, where has Spoton’s investments been in the last few quarters? How is the company looking at consolidating its service offerings?
All our big ticket investments in technology, employee empowerment and sustainability, are focussed on driving growth, competitiveness and profitability across our services mix.
We already offer integrated road express, air express and 3PL services to customers while enabling wealth of real-time data about live and legacy shipments.
What technology innovations are you looking at to deploy in order to prepare for future growth and meet unprecedented digital transformation demanded by pandemics like COVID-19?
Our technology innovations are presently focussed in areas such as predictive analytics, paperless/contactless operations, e-learning management systems, warehouse automation and real-time shipment analytics, to both clients and internal teams.
For instance, we have developed an in-house AI model called ‘Reinforced Learning’ to drive network efficiency. The AI engine, using live and legacy operation details related to the customer, enables quicker deliveries, allows efficient fleet utilisation and faster reaction to operational issues and dynamic customer requests, more effectively. Besides increasing the efficiency of Spoton’s pan-India network, this AI engine is also helping improve overall kilometers travelled by our trucks.
Any new alliances you have forged to leverage and offer a large basket of products and solutions to the Indian industry?
Our most recent investment to expand our service mix was in 3PL when we acquired a majority and controlling stake in Chennai-based RTS Logistics. With this investment, we now offer road and air express and 3PL services under one umbrella.
What are some of the advantages of being small during a pandemic? What can the larger chains learn from smaller ones in terms of supply chain management?
It depends on what is considered small? At 700+ crore and 17% Y-O-Y growth, Spoton continues to be the fastest growing express logistics provider in India.
Our asset-light business model and technology-centric operational backbone is built for agile operations. This agility is our key USP and enables us to engage with large customer requirements as well as address the need for consignment detailing at the piece level.
We now have 5000+ active customers base but still pay great attention to highly personalised relationships with each one of them. This is one reason why we have been able to regain 90% of business from pre-COVID levels.
What about your aspirations towards achieving good growth in the express logistics segment considering that the crisis had almost crippled the sector?
We consider COVID-19 a mere blip on the radar. Core economic indicators continue to be sound for the long run.
A shift in manufacturing to India by global product majors may also usher in newer opportunities for growth. Overall, we continue to remain bullish and will proceed with our investments as planned.
Do you consider 2019-20 a lost fiscal for Spoton? Would you continue the focus on growth in the context of the expected moderation immediately after the pandemic subsides and the pent-up demand? Would that make any perceptible difference?
The business environment is slowly returning to normalcy and we expect to achieve most of the revenue goals we set for 2020-21, barring unforeseen disruptions or economic slowdown due to drop in consumption levels over the next few quarters.
With markets reopening in July, we have recovered 90 per cent of our pre-COVID business. Before the first lockdown, we were growing above the industry average at 17 per cent CAGR. We are looking forward to continuing on this trajectory as demand picks up again and the sector regains stability.
Many logistics and operations managers are feeling overwhelmed these days. What practical advice do you have for them as they try to respond to the fluctuation in demand and supply?
I believe, there is an opportunity in every adverse situation. There is enough scope to adopt, adapt, re-invent every aspect of work that we carry out in our daily lives. Sustainability in supply chain operations is most essential, quick decision making while remaining flexible and agile will go a long way. Embracing technology and digitisation along with automation is the key to sustain through these tough times.