DTDC: Blockchain May Emerge as New Operating System for Supply Chain Networks

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The Indian logistics industry has entered a robust phase of Cloud-enabled digital transformation in the pandemic. DTDC, one of the preferred courier brands in India with the largest network of delivery destinations, is now batting for Blockchain-based technology to boost the supply chain ecosystem further.

DTDC is already heavily invested in Big data analytics and the Internet of Things (IoT) where complex data sets are analyzed to improve supply chain performance, revenue, and customer analytics.

The company has also enabled big data analytics to its middle management to increase its branch-level delivery performance in the last-mile sector.

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IANS spoke to Santosh Abbimane, Chief Financial Officer and Chief Transformation Officer at DTDC, on how Blockchain technology can transform the logistics supply chain networks.

Here are excerpts from an interview:

Q: Tell us about your digital transformation journey before the pandemic? Did Covid play the role of a catalyst in accelerating your digital transformation journey?

A: Our digital transformation journey has been undertaken in multiple waves starting from the conventional SAP ECC implementation for financial accounting.

Then DTDC started the first digital wave by supporting a startup called Shipsy (LLama Logisol Pvt Ltd). With this move, we moved to digital-first and last-mile processes. This included transforming not only DTDC but also the now more than 13,000 franchisees of DTDC and other partners in our ecosystem, a count of over 50,000.

This was followed by moving to an online communication suite, completing the commercial lifecycle by implementing SAP sales cloud, SAP BRIM for revenue management and SAP BPC for consolidation, EKA, another startup for T&E as well as digitizing P2P processes.

In the latest wave, we have also implemented DWHs in multi-cloud environments that have improved operations, yield management, audit, etc. RPA tools require data across distributed processes and ML/AI tools to improve productivity. Not only are we using ML/AI operations but also for training staff, including “Smile Ambassadors,” our last mile.

The DTDC retail app and smile code-based delivery — first started by DTDC — was a huge success in the post-pandemic era. IoT-based application ensuring temperature-controlled vaccine movement without refrigerated trucks was also a first in India.

Q: Post data center migration, what are some more of the future problems you are looking to solve?

A: We are targeting to improve in the areas such as Integrating functional views via Data Lake warehouse setups, Machine Learning, and Artificial Intelligence guided route optimization. We are investing heavily in Intelligent automation for Infrastructure managed services, Application Performance Monitoring, and Dynamic Application Security Testing to protect and improve the security of our customer data.

Our focus is also on Integrating IoT applications, including vehicle tracking, track, trace, etc. Extending IoT applications for the farm to fork to add value to agriculture and food processing sectors etc., are also key focus areas.

We are also working on sustainability initiatives and automation to improve our carbon footprint.

Q: How are you using big data & analytics to better cater to your customers’ digital needs?

A: One area where we have seen an incredible impact has been in the democratization of data. Standard reports are in pull mode but can be linked to more complex analysis when required.

We have invested in Big data analytics, where complex data sets are analyzed to improve supply chain performance, revenue, and customer analytics. All our senior management teams in various functional areas are utilizing big data analytics to improve sales targets, customer retention, operational efficiency, and financial performance. Furthermore, we have enabled big data analytics to our middle management to increase our branch-level delivery performance in the last mile sector.

Q: How will the logistics landscape look five years from now? For example, cold chain monitoring devices leverage IoT to provide real-time temperature data for example. What are other path-breaking ideas in store?

A: Looking at the larger picture, one essential issue is that currently, supply chains are still distributed. Manufacturing, Inventory, storage (both information and goods), transportation, and distribution systems are discrete and have varying degrees of integration. We will see closer integration across all stages of supply chains.

For example, suppose you own the warehouse responsible for the flow of goods. In that case, there could be occasions where suppliers fail to deliver goods intact or on time, leading to potential time-consuming disputes and punitive legal recourse measures.

Blockchain technology will avoid such scenarios as it would allow you to negotiate smart contacts with suppliers that clearly define terms, conditions, and the mode of functioning between the two parties while further mandating intelligent data collection and control via sensors of all goods to generate critical information on the state of goods and the time of delivery which is an IoT use case as well.

Further, the use of IoT for temperature-controlled product movement is already here and DTDC is using it. The use of IoT in the Health care sector will evolve from monitoring to active management to being the preferred delivery mechanism for therapeutics.

I also believe the IoT involvement will be seen most in farm-to-fork items, even in cost-sensitive markets and lower down the value chain.

Supply chains will evolve and use IoT and wireless communications will help for tracking the choke points. AI/ML will sharpen their forecasting models and help both manufacturers and service providers to plan better:

Unmanned mobile robots in warehouses are a limited reality, they will soon become ubiquitous

Drones for online fulfillment – Predictive models combined with new-age fleets could lead to minimal fulfillment time.

Blockchain technology could emerge as the new operating system for supply chain networks that combines B2B connectivity with software apps.

Q: One of the key trends emerging is that of green logistics. Can you tell us how digitization and cloud technology can aid the logistics sector to reduce its carbon footprint?

The world is now entering the Fourth Industrial Revolution which will feature major technological advances in artificial intelligence, robotics, cloud computing, 3D printing, and more.

The logistics sector has to a large extent adopted Cloud computing — large-scale, shared IT infrastructure available over the Internet — as the engine enabling these technology advancements. These advancements, are in turn, driving cloud uptake.

The biggest advantage is to automate and use off-the-shelf programs across some of the service providers and available on the hyper-scaled platforms.

In a country like India, monitoring solar installations (on saying roofs of large hubs) and electricity storage and integrating them with alternate but temporary modes of carbon-based power sources (DG sets) are key requirements for 24×7 operations.

Where solar installations are currently sub-optimal monitoring electricity usage, DG set back up efficiency, etc. can provide an important pathway to a greener process.

Logistics applications allied with AI/ML route predictions and sensors on Electric Delivery vehicles could ensure that vehicle routes are scheduled to be back in the base for recharging at the right time.

Using applications on the cloud to automatically monitor heavy vehicle movements and hence driver movements via alerts, are a good way to improve fuel efficiency and consumption.

Q: What did cloud technology enable you to do better?

A: AWS allowed us to move to the cloud for a reasonable cost, in a phased manner while improving the performance of the applications. Thus, we could be sure of what we were getting for the price we are paying incrementally.

The opportunity to fine-tune operations for optimizing cost was a significant advantage. The active partnership of the AWS teams in working with us for scaling and realizing savings has been a key factor that enabled us to move many applications to the cloud.

We also found cost-effective analytics solutions to democratize our data consumption.

In short, AWS provided a scalable platform for our business applications enabling faster delivery, improved security, faster app startup, and portability.

From a core logistics perspective, our entire first and last-mile applications are on AWS along with the reporting and dashboards related to the same.

Currently, most of our SAP stack includes SAP ECC, SAP BRIM, and SAP BPC. We are also using AWS for Revenue Analytics and First and Last mile commercial payout computations.

Q: What are the must-have qualities for today’s successful CIO/CTO to stay ahead of the curve?

The baseline for any CIO/CTO must be to work with the business teams on understanding the outcomes required and focus on delivering them. This sounds easier than it is when one has to consider TCO and ROI metrics.

However, the key contribution of a CIO/CTO is to work with functional teams to push the boundaries on what can be delivered to the customer. e.g. in logistics B2B (corporate) customers are asking for the same standards that are in B2C (say an e-com process). The expectations are simply not the same anymore.

We are living in a world where technology is constantly evolving and as are customer expectations, hence the CIO / CTO must try and stay ahead of the curve to be effective. The only way to do so is to be a digital change agent.

Last but not the least, to borrow a phrase from Thomas Friedman, work with internal customers to ensure that AI is not seen as artificial intelligence but as an intelligent assistant.

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