In 
The queer thing about logistics is that though, as a sector, it accounts for hundreds of crores in the GDP, the players in the segment are obsessed with saving every paisa that they earn.
Consider this. Logistics major Gati has offices at over 400 locations in India and connects close to 600 districts in the country through its humungous fleet of vehicles. Every time, it is able to cut down travel between its disparate offices through operational efficiency, precious money and time are saved. Little wonder, GS Ravi Kumar, CIO, Gati, while taking decision for IT implementation on multi-crore projects, is always conscious about saving every rupee. For us at Gati, IT investment is not a cost but an instrument for controlling costs, he clarifies.
Indeed, IT can play a major role in increasing the operational efficiency of the players, especially when it comes to the express cargo segment. Yet, investment on IT by logistics players in India is, at best, paltry, with most of the players seemingly satisfied with lower hanging fruits like computerisation of offices or implementation of primitive warehousing solutions.
According to a recent study by Kale Consultants, while 48% of the logistic companies in the country considered IT critical for their operations, only 24% of the companies were found to be above average in terms of technology adoption. And 86% of the companies were found to spend less than 1% of their revenues on technology adoption!
Haves and have-nots
Fragmentation of the market is the main reason, according to Ajay Chopra, CEO, Drive India Enterprises. The Indian market comprises a huge chunk of unorganised players who dot the landscape. While in the organised sector, the use of IT has been fairly high, the same cannot be said of the unorganised sector. According to a recently published study, IT investments by the Indian logistics industry accounted for some Rs 400 crore in 2007 and were set to rise to Rs 1,000 crore by 2013. It goes without saying as to who will be spending this money, he adds.
With the opening of the markets and entry of large players like DHL, Fedex and others into the domestic scene, there is a clear line that divides the big and the small players. While companies like DHL and AFL have brought with them processes and practices that are followed at an international scale, the small-time Indian players have been found wanting on both vision and inclination to spend on technology.
This has resulted in a clear contrast in the way the big players use technology to deliver customer services like real-time tracking of shipments, while the older ones still harp on the power of proof of delivery (POD). In fact, the push for technology adoption usually comes from the customer side.
It is the customer who more often than not drives the need to implement latest technology. For instance, customers, who have in the course of travel or work interacted with DHL internationally, are accustomed to very high levels of service standards. We have to replicate that in India. Hence, for us, customer satisfaction is the ultimate guide when it comes to making any decision, be it a strategic one or one related to IT investment, affirms Prasad Dhumal, Senior Director IT, South Asia at DHL Express.
The economic slowdown is the reason why technology is being increasingly used to boost productivity in the logistics sector. In the past few years, players across the board, even the small and medium ones, have suddenly become conscious of the need to automate their systems and be more efficient. One domestic company that has been designing software solutions for the logistics vertical, Four Soft, talks about the trend.
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