A big share of the market today is online, be it in the retail industry or even the service industry. There is no running away from it; the digital transformation of businesses is well and truly underway. So what are your options as a supplier who is part of the ecosystem? Well, intelligent capture of information and utilizing data for one. As the Indian consumer becomes more aware and savvy about online delivery, the demand is growing dramatically.
The need for creating a better logistics system which can handle the growing e-commerce model of more and more businesses is also increasing. So as a company that needs to meet the growing demand for speedy delivery, there will be a huge need for better management and improvement of logistics to keep up with the changing trend.
Sales and Order Capturing
The growth of online demand and delivery can be measured by just how quickly it has grown in Tier 2 and Tier 3 cities. While Tier 1 cities have been in an advantageous position when it comes to deliveries, it is part of a measured approach. The Tier 1 cities work as pilot projects to test out and create robust delivery models from the ground up.
Once the delivery system is set up, it can be further enhanced with features such as same-day shipping and overnight delivery. A further upgrade that is expected in the future of such models is same-day delivery. But that requires the availability of warehouses within a reasonable range of Tier 1 cities. In where available lands within Tier 1 cities is a major problem, this will be a pain point
While Tier 1 cities enjoy delivery features earlier, it is the learning and capturing of data here that helps refine and prepare for the rollout of the delivery services in Tier 2 and Tier 3 cities. It is common these days to see younger customers ordering goods and services online. Largely, the online delivery model has been a success in Tier 2 and Tier 3 as well. There are obvious areas of improvement. For example, the speed of delivery is not quite as good as in Tier 1. This can be attributed to a couple of factors:
1. Volume of business - While there are a larger number of Tier 2 and Tier 3 cities in India, the volume of business and customer base in Tier 1 cities is still significantly more. As a result, the infrastructure for delivery is far more evolved in and around Tier 1 cities. This means that things like warehousing and delivery mechanics are closer to Tier 1 cities as well and they reap the benefits.
2. Warehousing - Faster delivery hinges on the quick identification on availability of inventory and ensuring the smoothening of the process of supply using data. Warehouse management and allocation play a huge role in bridging the gap between demand and supply. Businesses have to identify key demand areas and allocate warehouses accordingly and often this means Tier 1 cities are prioritised over Tier 2 and Tier 3 cities.
Managing Warehousing Accordingly
Outside of the food delivery business, warehousing and warehouse management have a huge impact in the sustenance of a commercial business. Strategic partnerships and acquisitions of warehouses create an ecosystem that can sustain demand. Through smart supply chain management and logistics, the availability of products is maintained and can even be grown. The knock-on effects of effective warehousing are immense. For example, if a business is based in Mumbai and has a warehouse on the outskirts of Pune, then they will incur heavy overheads for logistics. It would be feasible to have a warehouse that is closer to Mumbai, on the outskirts of the city, which would see lower logistics cost and quicker supply. Quick and easy flow of supply is key for maintaining a productive delivery system.
Another example of effective warehousing is the volume of warehouses. Identifying business hotspots and maintaining warehouses close to these hotspots will ensure the best overall delivery experiences. For example, if a single large warehouse in Gurgaon is responsible for the supply of goods to businesses in NCR, UP and Bihar, then the cost of delivery will shoot up due to the logistics involved. But if there are multiple smaller warehouses in different zones for such a business, it will allow for smaller overhead expenses, better logistics and also quick delivery.
In conclusion, when a business adapts to the online delivery model, it must keep in mind the aspects that will make it effective. Simply having a high volume of delivery vendors does not ensure a good delivery experience. Businesses must take into accounts the price point at which a delivery is feasible for the business and lucrative for the consumer. Besides this, effectively partnering with a supply chain management partner and ensuring easy supply is also a key point. When a business commits to the online delivery of products, quality control too, is an additional responsibility that adds costs. So while taking on the online delivery commitment for businesses, one must go look at all the facets of such a business model to ensure sustainability and growth in the long run.