Subhasis Ghosh, Founder, Apex Group & Co-founder, Maritime World Services, In Conversation with LogiNext
Today we speak with one of the thought leaders of the industry, Mr. Subhasis Ghosh. It gives us great pleasure to invite him to join our ‘thought leadership’ initiative at LogiNext. Mr. Ghosh comes with more than three decades in the supply chain and logistics industry. His repertoire of knowledge emerges from leading the supply chain and logistics businesses within Indian Air Force, Jebel Ali Free Zone Authority, Reliance Industries, and Maersk Group. He has then put the weight of his knowledge and experience behind Apex Group, where he is the Founder/ Managing Partner and Co-founded Maritime World Services. He has supported, invested in, and directed multiple startups to success. With respect and adulation, we share Mr. Ghosh, and his invigorating wisdom with everyone. Read on to let his words thrill your intellect. They had the same effect on us.
LogiNext Team (LT): Considering your diverse experience in Maritime, logistics & SCM, can you share your key learning on the technology trends which have positively impacted the logistics and supply chain globally in the last 5 years?
Subhasis Ghosh (SG): As change continues to accelerate, my take on the trends that have significantly impacted the supply chain and logistics globally over the last half decade are:
Business Intelligence(BI) is evolving from only helping users to find and dive deeper into information, to helping them make sense of already available information. Supply chain users and Logistics service providers are benefiting from the use of analytics and decision support systems as a part of BI deployments.
The mobility aspect of the supply chain is providing better service levels and reducing costs. In the warehouse hand-helds have helped the receiving, put away processes, returns, cycle counting, and asset tracking. In transportation, mobile computing has helped in better load scheduling, routing and asset utilization, better container management and electronic proof of delivery. In the ports, CFSs and ICDs it has helped in better yard management gate processes and labor management.
Supply chain cost now not only relates to the financial costs, it also significantly considers the cost to the environment including cost of incremental pollution, degrading the soil, noise, vibration, unsafe operations etc. Deploying applications for transportation management, yard management, preventive maintenance and deploying technologies like RFID etc. by industry leading organisations have contributed to reducing the impact on the environment by reducing resource consumption and enhancing safety. The benefits of greener supply chain include not least, achieving better compliance and better consumer perception.
From the SCM user and LSP perspectives, the use of flexible services like Software/Infrastructure as service (SaaS/ IaaS) in place of investing in on-premise hosting and management of applications are enabling businesses to use applications for customer relationships, trade and compliance management etc. without the need to host these. From the evolving logistics –technology service provider perspective, cloud computing has enabled several new business models including catalogue based purchase to market places for transportation and logistics services.
Some of the other broad technology trends in the supply chain include:
- Electronic Data Interchange (EDI) has proliferated and is helping businesses exchange data from warehouse, transfer shipping related documents to the customs etc.
- Social search, analytics and tools sharing latest demand and industry capacity trends and on how customers and partners are interacting with the enterprise.
LT: You have been mentoring & advising early stage start-ups focusing on logistics and supply chain, what are the trends that you have observed in the advent of tech-startups focusing on this industry? Have you come across some unique and disruptive ideas which you think have the potential to break the convention?
SG: Over the last few years, I see a lot of energy in the startup ecosystem. Startups including the ones that I have looked at leverage technology significantly and have attempted to disrupt most areas of the supply chain including procurement, service provider discovery and selection, packaging, delivery (primary as well as last mile) and reverse logistics.
Startups have the advantage of not having past baggage legacy (processes and applications) and are willing to experiment. However, several start-ups have leveraged technology for the aggregator model either on the cargo owner or on the service provider side or utilized the market place model, which I think is somewhat over used. Some of these business models need a critical mass of participants, who could be early adopters. Until a critical mass is achieved, several start-ups should extend freebies or discounted services and sometimes even pivot their business model, based on market feedback.
Startups that remain flexible to fine tune their business model based on market feedback, provide measurable add value to clients and execute relentlessly, would be successful.
I am excited to be mentoring several early stage startups each of which I think is unique in their own way; one that is working to bring short term warehousing to the consumers like home-owners, professionals and small businesses, while enabling warehouse operators to utilise their unused space called StorageHub.
The other is ‘helping the maritime and logistics ecosystem achieve more’ by sharing insights through digital publications in place of the traditional print medium, providing business advisory services and facilitating service user, service provider and influencer conversations by organizing content led conferences and exhibitions called Maritime World Services.
The third that is enabling shipping lines share rates with their customers confidentially called RateConnect and the fourth is a cloud based candidate lead management system for training institutes called Varsito.
LT: The global logistics eco-system is unorganized, and Indian markets have way more unorganized operations. What do you think holds back the traditional veterans from accepting inevitable need of technology and evolving? What is the advice that you would like to give them to enable and manage the transition?
SG: For traditional businesses to deploy technology there is an understandable apprehension of the quantum of change in processes and working that it would bring, the need to invest, unclear returns on such investments and the potential of making trusted jobs redundant. Then there is the lure of catching up by being fast followers instead of early movers, who learn from implementation glitches.
I think that technology providers can assist this evolution with a better demonstration of ROI on technology investments to traditional businesses and more proactive hand-holding during the transition process.
My advice is that deep assessments, prior to making investment decisions including investment in technology, ultimately uncover upsides and downsides in an equal measure and all things considered, the decision then to invest significantly in technology and processes, needs to be made as a ‘leap of faith’ with risk mitigation measures in place. Evolution including technological evolution, I believe, is taking us towards a better future and business leaders need to make that leap of faith, when needed.
On the other hand, if a business is not evolving, it is likely to be withering away its competitive advantage. We see well-known brands like Sears, Circuit City etc. are no longer heard of… So, evolution and adaption to change is not an option, it is the key to survival.
LT: What is the expected investment trends for startups in 2017? Will B2B impose their dominance over the B2C by attracting more investors?
SG: Money would continue to flow where there is value, so investors would continue to invest in startups that deliver clear value to customers and execute relentlessly. Off course several startups would continue to get funded in each sector, because investors are not sure, which one will really scale up and become a unicorn, and then you do not want to be left behind.
While startups in the B2C space have the power of aggregation and a shorter sales cycle, my preference for 2017 is certainly for technology led startups, servicing B2B customers, that have a clear value proposition and some satisfied customers.
LT: With the advent of E-commerce, what are the key takeaways for the Logistics industry, especially last mile and reverse logistics? What are the best practices to ensure smooth supply chain operations in this era?
SG: Online retailers deliver less than 5 % of food and less than 20% of non-food items, however their volumes are growing and I would expect growth to be in multiples of existing volumes by 2020 as governments and industry resolve issues around e-commerce. As e-tailing volumes increase and more service providers become available for the last mile, instead of those with larger scale of operations to spread their costs, service providers with better employment of technology would have a competitive advantage.
Further, we could have large e-tailers moving down the supply chain and starting their own last mile deliveries like E-Kart from Flipkart and Amazon Logistics Services, Alibaba partnering with Maersk etc. With larger volumes, we could then have logistics (last mile delivery) service providers serving the B2C space, venturing into serving B2B customers and vice versa, redefining boundaries.
Technology could also help redesign the present hub-and-spoke networks, which require adherence to strict cut-off times. Last mile delivery usually accounts for about half the overall cost of the delivery and would be impacted as the e-taling volumes increase and the senders, receivers and the employees require new ways of interacting at different frequencies with the service providers on when/where they want their delivery or would like their returns picked up.
An area to look for is analytics, which is moving from backward looking analysis, through modelling the performance of assets and network to optimization, to maximize value from a network, route etc. Businesses in the last mile logistics as well as reverse logistics could benefit from the use advance analytics.
Believe that investment of management time and financial resources in deployment as well as exploitation of information technology including analytics is a good practice that would serve this segment well.
LT: Post GST implementation, how will the transportation sector evolve? How will it affect the entire supply chain mechanism?
SG: GST is a landmark development which is expected to integrate the Indian economy better and also subsume several taxes like VAT, Service tax etc.
India has envisaged a dual G.S.T. model with our federal structure, implying that every transaction will be taxed simultaneously by the state and the central governments.
Therefore, whenever we have an invoice, we would expect to see two GSTs — a Central and a State GST.
Considering the additional complexity in implementing GST and the need to maintain elaborate accounting and MIS for each branch of transporters in each state, pay GST in advance and then claim refunds, I would expect some consolidation in the transportation industry by way of alliances, M&A, as it would require some scale of business to meet the new compliance requirements.
LT: What are the most awaited technology trends that can redefine the supply chain eco-system by 2020?
SG: I think that the goal of evolution of technology is not complete autonomy or redefinition of supply chain processes; it is to promote deeper trust and transparent collaboration with all the actors in the supply chain.
The evolving technology trends which would have a deep impact on the supply chain and logistics processes in the next 3–5 years would include:
- Technology enabled processes and devices supporting 24 x 7 x 365 deliveries anywhere as sales grow in volumes over multiple channels.
- Wearable technology like glasses, smart clothes becoming affordable and commonly used and delivery information becoming available and predictive, by way of information exchange among the machines. Drones being used for significant amount of deliveries.
- In the supply chain and logistics domain, this would enable monitoring and automatic control of freight, capacity and assets by gestures. The distinctions between smart phones for personal use and handhelds for the warehouse/transportation are blurring already and home use technologies like Microsoft Kinect are already being experimented in the supply chain.
- Technology enabled businesses models to incentivise and enable sharing of products and their re-use, given the increasing focus on sustainability.
- Evolution of 3D printing technologies enable personalized consumption requiring flow of raw materials and data perhaps more than finished goods. This could impact the supply chain and catalyze the need to transfer massive amounts of encrypted data.
- Growth and evolution of analytics would enable better operational planning, asset utilization as well as enable development of new business models including providing market and environmental intelligence to small businesses, address verification, geo-data analytics etc.
LT: Thank you, Mr. Ghosh for your wonderful insights.
SG: It was a pleasure, Thank You.