Tuesday, February 11, 2014

How transport and logistics have already started evolving

The PWC report on transport and logistics hits on several trends that are emerging already in both public and private sectors. As part of my research for this post I tried to find applications of the suggested strategies in both spheres that are already in place, and are a good precursor what all is possible by 2030.

Volume 3 of the report focuses on emerging markets. There is more opportunity for growth in transport systems in emerging markets as often there are complete segments of the country that are isolated from potential economic opportunities due to lack of infrastructure and transport facilities. If however a company were able to penetrate through to these areas there are super normal profits to be had.

While I was working at Unilever Pakistan there was a concerted effort to access rural markets. The company decided to outsource its distribution to these channels via local logistics and transport companies. The reasons for doing so were that these 'locals' knew how to traverse the local terrain and were not under any security threat from potential thieves that prowled the area due to the lack of local law enforcement. The results were outstanding. The growth from rural markets was double that of national sales. More about the program and its results can be found in this Bloomberg article here.

This project was actually inspired by Hindustan Unilever Limited (HUL) where the strategy to target rural markets under the banner of the "Shakti" program became the template for accessing rural markets. The program primarily used local female entrepreneurs to help access these markets. The lack of regular stores forced them to market via the locals and this became a successful operating strategy. However this would not have been possible without complementing technology. HUL built a GPS and density mapping technology to manage its rural supply chain networks. A flexible supply chain was necessary as rural Indian markets are affected by seasonal migration and the ability to map population density allows the company a significant advantage in targeting its outreach. A brief case study of the project by Accenture further explains the intricacies of the project. In line with Volume 2 of the PWC report ICT has also become an important apparatus for managing distribution systems and "Shakti" is no different. Recently, HUL gave all its Shakti workers smartphones to amongst other things manage inventory as supply to these rural markets can take much longer than regular transport cycles.

ICT also has multiple benefits for prospective transport policy makers. This article helps explain how data gathered from ICT instruments can be used to reduce traffic congestion in Mumbai. They use the city of Stockholm as an example where data on traffic congestion was used to charge a variable toll on the busiest roads during peak hours and how this reduced congestion. ICT tools as basic as smartphones can be used to transmit data regarding location and the same can be done for public transport. Similarly such a system can be used to be improve emergency response in the case of an accident. Other uses for ICT on transport can be found here in this piece on the World Bank website. The article gives concrete examples of how ICT initiatives have been used to make roads safer, plan trips better and improve market access to less affluent segments of the population.

In the same vein, my question for this week is that if we were to plan an ICT related transport project in Pittsburgh, which area would we focus on and how it would be applied? What is the one area of Pittsburgh travel that we would want to be better managed and in the light of these articles how would we do it?

Articles Cited:
2. http://www.accenture.com/Microsites/emerging-markets/Documents/pdf/Accenture-Unilever-Case-Study-Final.pdf

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.