IT IN LOGISTICS (Article 03)

The IT solutions market in this sector, though nascent, is rapidly evolving to meet the growing needs of a cross section of firms in this domain. A gamut of applications driven by the need for streamlining operations and business processes is driving the adoption of IT among logistics service providers. In addition, increased customer expectations of ‘just in time’ deliveries and tracking systems have fueled the need for e-commerce/ Web based solutions. IT is expected to be the harbinger of growth in the next phase of evolution of the Indian logistics sector.
The major hurdle is more in “awareness” and “adoption”. It requires a change in mindset, where logistics players stop looking at IT as a cost centre and see it as a “differentiator” that will help in improving efficiency and gain more leverage with the customers.
The IT systems market in itself is going through a major transformation. A global benchmark is to spend about 2.5 per cent of the revenue on IT in the logistics sector. Some companies that are small but dynamic and fast growing actually spend double of that for a few years and build a certain size quickly. IT infrastructure (hardware, software and people) are the major areas of cost. With the transition in the IT space, many companies have started to offer “on-demand” software as a service thereby the cost factor on infrastructure is reducing.
Eventually, logistics is nothing but the movement of material and information. There could be no logistics without a proper flow of information. Hence, information technology is as important as the physical movement of the cargo.

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