September 17, 2022

Map of Interests V2 -> Logistics Node

Part 1

Preface

The previous version of “Map my Interest” fell short in capturing the depth of each topic. So, I decided to take a stab at it once again.

In this version, I would like to draw attention to intersections between two domains. The challenges that I would like to address and why they are important to solve.

In this post, we will be covering the intersection of domains with logistics node. The subsequent posts in this series will cover the remaining nodes.

1. Agri-space<–>Logistics

• Logistics is much more than just transportation. Logistics involves many activies of movement including packaging, loading, unloading, warehousing and in-transit protection of commodity.
• Commodity Logistics in agri space is an underdeveloped segment that moves more than 60% of domestic volume in logistics. The current trend in agri-commodity logistics is dependant on people involved in trade. Thus, innovation or incentive to make it better are not part and parcel of the discussion.
• I will be writing a lot more about this topic as I currently operate at this intersection for livelihood.

2. Logistics <–> Product Development

• This is one intersection of domains that has alluded me in my career. The irony of it is that I started my carreer as business development person scoping the digitisation for a logistics operator.
• During the process, I set my sails towards product development by first learning the ropes of product design.
• Building products in logistics comes with its own challenges. The tech needed is already available but the major roadblock comes in its interdependence, multiple stakeholders and commoditised nature of its services.
• The number of workflows that are invovled in logistics is mind bogling. Building a product that would accommodate all the possible workflows of each stakeholder becomes a test of understanding the business and domain in depth before setting out building a product. This has been my biggest learning as a startup founder withPipehaul. We had to rework the core architecture of product multiple times. The additional complexity as we increased our fulfilment operations.

3. Logistics <–> Marketplaces

• Marketplaces are businesses that deal with multiple stakeholders. The key value addition as a marketplace is the power of mapping two or more different stakeholders to transact through you(aggregator) or because of you(platform).
• The logistics industry so far has worked on the model of service provision. This nature of catering to customers in a bespoke manner when the services provided are commoditised has always provided me with ample ambition to tilt the scales.
• The larger logistics providers make money through bundling multiple services under one roof. They have no incentive to make changes to the way a customer is engaging with logistisc service provider.
• Marketplace model of logistics is an attempt to unbundle the services into their individual components and providing the the customer a better approach to engaging with logistics service providers.
• For example, an international freight forwarder will take care of 10 different aspects of your logistical movement while a marketplace model allows a customer to engage with different service providers like customs house agent, liner and trailer transportation provider to fulfil the same movement in a more transparent way.

4. Logistics <–> Entrepreneurship

• The concept of solving a specific problem and building a business around it is the dominant mode for new entrant startups.

• Entrepreneurs coming into any industry with no baggage tend to think fresh and execute their ideas to fruition, resulting in massive innovation. Examples like Jeff Bezos , Elon Musk, Sachin and Binny Bhansals and many more entreprenuers who had no previous experience when they begun but changed the way indutry works by the time they became successful.
• This is possible in logistics domain as well. More people from outside the industry should foray into logistics. It is one of the best markets to require all varieties of skilsets at our collective disposal. Yet, the success of solving a single problem without understanding where you are placed in the overall system is limited.
• Approaching this space with a systems thinking mindest helps entreprenuers contextualise their success and impact to customers, employees and investors. This is a challenge because as you wade into the waters of logistics ecosystems, there will be many problems to solve but not enough resources or banwidth.
• In logistics, problems are not disciplinary in nature but rather interconnected. Approaching to solve them holistically requires systematic thinking as an entrepreneur.

Logistics Node:

The domain of logistics like I wrote in the previous post of Map of interests V1.

Both Agri and Logistics are complex domains. They cannot be defined to the fullest due to the type of ever changing nature of their functioning. Though, the fundamental blocks of both the domains are pretty easy to understand, challenges arise when things are interconnected.

Understanding the fundamental blocks is slow to begin with but sets up a solid foundation for us to explore and innovate in the space. The interconnected, multi disciplinary and complex nature of logistics provides a number of opportunities to create value.

The prospect of delivering a small parcel from your famous e-commerce store’s warehouse to your home involves more than 10 different entities / stakeholders to fulfil. The interchange of data with essential failsafes is one of the simplest logistical workflows to digitise and in return make efficient. Delhivery built its business focusing predominantly on this specific use case. Yet, if you walk up to anyone in Delhivery and ask them, “Have you figured out this workflow and what next?” They might answer you with a smile highlighting the simplistic nature of your question.

Personally, it’s the curiosity to understand the overall system at play that ensues my interest and effort in logistics domain.

Signing off till the next time,

Vivek V.S, solving logistical issues with writing.