Logistics

If in the Service Industry, something moved to the scale of perfection, then it was logistics. Here is one industry, which has been so good, that picks up consigment on a simple call, makes available the tracking of the consignment and delivers promptly.

In Europe, the only industry which thrives and grows is Logistics. More and more manufacturing got shifted to Asia, which ensured that the Logistics company had a larger roll to play for prompt refilling of shelf spaces in the retail markets.

At any given time, if you see around yourself in Europe, then it is largely the trucks and boxes moving goods from point A to Point B.

The extension of the same logic should have been supply chain standardization. Wherein the company could track its suppliers production online and take deliveries on either daily basis or weekly basis. This would have ensured total wiping out of working capital and most companies would have worked on suppliers money.

Visit a Supermall and you will find the same brands being sold by each of them with hundreds of these packets are stacked in linear shelves. This is practically the cost of carrying inventory of thousands of supermalls , and many a times, when the retailer is the same chain. The supermalls actually could have extended the store into a virtual store and offered deep discounts for slow moving products with home delivery. And sweet discounts for FMCG. This would have opened another channel of distribution. The logistics companies would have got themselves cobranded with the store

Technically, this is a waste and sooner or later, a virtual retailer without any overheads of rent , salaries, warehouse, delivery vans etc will outbeat the system and will deliver directly from the manufacturers warehouse to buyers home. Passing the savings directly to the consumer. If pizza can be delivered, so can soap and cola and so can tomatoes and potatoes. We all saw in our childhood, the milk bus delivering milk bottles enroute. Exactly, as what we see with the demise of Travel Agents, we would see the demise of big retailing, where Amazon will find more value in delivering detergents and colas, then books and CD. It is only the shopping experience, which virtual sites have to rebuilt, however, given the next generation of kids hooked to video games, will find online stores with sexy sales girls more charming then the real time stores.

For the textile industry, cotton, polyester, and all other industrial consumables have a huge logistics cost in the supply chain and delivery cost in the sales chain. In the good old days, the government in order to promote the railways, would run a railway track right to the middle of the mill and the railways would deliver cotton, coal etc etc. But railways connected to the industries is now a gone concept. However, with the oil price rising, one had to rethink on long distance hauling by railways and short distance deliveries by trucking. If only railways would be privatized in most parts of the world, one would see it as a good alternate to trucking . Infact , only if railways be given for the goods business to logistics companies, they would change the shape of railways and inland deliveries. Anycase, most logistics companies have planes for international deliveries, so trains for local deliveries should be the logical extension.

Logistics companies have so much more business coming their way. Over a time, they would be the largest companies in the world in terms of sales turnover and growth rate.

Interestingly, logistics companies are also the best source for Data Mining on International imports and Exports . Which for confidentiality purposes have though not been exploited, however , generic products can still be valued as commercial througput for the researchers.