Transportation constitutes the major chunk of overall spend on logistics in manufacturing sector. Most of the transportation in this sector is currently happening via unorganised sector. Unorganised sector is fragmented, marked by lower incomes to workforce, poor in technology adoption, and the onus of continuous improvement is on the customer. Organised players in the industry have the capabilities to address all these challenges.
The other notable benefits that accrue to the client are:
- Leveraging the existing ecosystem: TDM does not aim to replace the existing ecosystem created by the client. In fact, it aims to absorb the existing transporters in company’s vendor pool.
- Single stop solution for transport requirement: Currently companies engage with multiple transporters leading to tedious and complex contract management exercise. The overheads spent on these activities are substantial. Engaging with a single organised player that works on Transport management system for both transaction and billing saves a lot of organizational bandwidth of the client.
- Agility in handling fluctuating volumes: In asset light business model, working closely with business partners who have their own vehicles becomes an important aspect. Having a good network of business partners helps a service provider to manage the peaks and troughs through a wider set of resources. Logistics has become a technology-oriented segment. While many service providers implement tech-enabled solutions, it becomes imperative for business partners as well to invest in latest technologies including eco-friendly vehicles.
- Control tower: Visibility of consignments is important, and companies demand to have the complete visibility of the vehicles which carry their goods. Having company’s own centralised control tower that helps in monitoring and reporting live status of the goods in transit through GPS/SIM tracking/Calling data is a differentiating factor.
- Driver welfare: Drivers are the backbone of the industry. Various initiatives such as a robust driver training programmes, safety and skill trainings, health check-up camps and education scholarships for their dependents adds numerous benefits to the company
TDM comes with its own sets of challenges. Availability of good quality data with the client, willingness to share this data, onboarding of the clients existing transporters is some of the key challenges faced during execution of TDM. These challenges maybe addressed if the client’s organisation is aligned to the objective of making the transition a success.
Mahindra Logistics has conceptualising an innovative engagement model called Transport desk model (TDM) that helps in smooth transition to organised transportation management. This model is completely transparent, fosters productivity improvement and comes with no or marginal additional cost. In most cases it also results in the cost reduction for customers.
Disclaimer: Views expressed here are the author's personal views.