History Of Logistics And Supply Chain Management

Logistics is considered as the key part of the supply chain process. It has a great impact on the economy of any country. The role and importance of logistics have been raised in various business environments. Logistics encompasses activities such as warehousing, freight transportation, material handling, inventory control, protective packaging, order processing, forecasting, marketing and customer service.

Historically, the logistics industry was meant for transportation, warehousing and material handling. From these early times to the 18th century, all segments of a supply chain were kept generally local because there was a lack of transport options and the cost of moving goods around the world was very high.

The logistics in India has changed a lot from being labor-intensive to today’s technology-oriented system that offers a variety of logistics services. In India, the concept of 3PL is a recent culture. Usually, manufacturing companies handled their own logistics needs in-house. But, soon the country gradually evolved from this stage and they started outsourcing their labor need to avoid labor-related issues.

Seismic Shifts

In the late 1920s, mass production was introduced which laid the foundations for the supply chain management. The idea of producing consistent products in bulk with increased efficiency modified business and supply chains forever. Within a few years like in the 60s and 70, the major changes happen in this industry such as-

• Container shipping – It was proved very helpful, not only in increasing the available space for goods, but also improved the speed of the freight movement at the same time cutting down the cost. With effective warehousing processes and transport terminal efficiency, the speed of transportation increased. The development of this transport process incorporating loading and unloading products started a new era of globalized trade.

• Barcoding – It was considered another gamechanger for the logistics industry. This technology promised to revolutionize the way companies tracked and managed inventory. The early success of Barcode in the grocery industry triggered the use of different types of barcodes in a vast number of applications. Once the barcode was adapted to become a globally used standard, it could be used for monitoring of the supply chain both locally and globally.

Technological advancements

The logistics management in today’s world covers all the segments of the value chain encompassing an efficient integration of transportation, warehousing, distribution, reverse logistics and other value-added services. Technological advances in recent years have further had amazing implications for the logistics in India as well as other countries.

• The innovation of the personal computer- In the 80s, this innovation acted as the catalyst for more advanced technologies that immensely affected the supply chain management and contributed to change the future of the transportation logistics industry. Spreadsheets, algorithms and optimization models are the few examples that could predict logistics issues within the supply chain. These helped in solving problems with planning, implementation, resource management and forecasting. Moreover, it helped in finding errors in the whole supply chain.

• Geographical Positioning System (GPS) – The GPS is a more accurate system that was launched in 1980. With the help of GPS, the truck operator can detect if a truck is stuck in traffic or veer off the pre-planned route. The operator does no longer has to check if the vehicle stays on track because the computer configured with GPS will alert him if it doesn't. He doesn’t need to inform the customer about early arrivals or delays - the computer will already send a text message or email.

• Web-Based Tracking –The providers of logistics in India are extending the services of web-based tracking of shipments to their clients. Many top logistics companies delivering the status report of the consignment to their clients. The report can be downloaded by connecting through the Internet. This updated information aids in planning the further schedule for dispatch and also helps in making follow up with customers for payment collections.

• Automated Guided Vehicle System (AGVS) - The system uses magnetic or optical guidance. An energized wire is laid on the warehouse floor that guides the magnetic system to perform material handling. In AGVS human operator is eliminated. Are you aware of how the logistics industry is facing COVID-19 lockdown challenges during this pandemic time? In such a situation, AGVS is the best choice when we want to avoid viruses spread due to human touch because this system can perform all the material handling operations without any human intervention. The robot attached with AGVS can pick up the exact material needed for a customer order.

• Inventory management – In earlier days, merchants had to manual entries for all purchases and dispatches. Since they didn’t have an inventory management and sale forecasting app, they used to predict demand themselves. However, with the advent of IT, systems such as collaborative replenishment and vendor controlled inventory were followed where the manufacturing company takes the responsibility to restock the distributor inventory, resulting in accurate and transparent inventory control and access to demand information.