Streamlining Automotive Operations with 3PL Warehousing and Distribution

In an interaction with Industry Outlook, Carl Williams, Managing Director – Asia Pacific, Unipart Services, and Sumit Paul, Country Head, Unipart Services India, share insights on how rising e-commerce and ongoing supply chain disruptions are reshaping logistics in India.

Carl, a seasoned business leader with over two decades of global experience, specializes in managing complex international supply networks and has led finished supply chain operations across various global markets.

Sumit, with nearly three decades of corporate experience, has been serving niche automotive clients across multiple cities. He currently oversees all business operations for the Logistics and IT division at Unipart India.

Rising e-commerce and supply chain disruptions challenge logistics in India. How are logistics companies enhancing efficiency with technology-driven warehousing and distribution?

Carl: Supply chain disruptions have made companies reconsider their warehouse status and thus an increased will to move out for risk mitigation. Artificial intelligence (AI) and demand insight are used more than ever to redesign the layout of a warehouse, which will ultimately increase efficiency and reduce cost. The emergence of AI-powered demand forecasting is critical for industries such as e-commerce and automotive, where the demand cycle is in no way stable. Further, the actualization of real-time heat mapping allows 3PL providers to identify busy storage zones, improve picking efficiency and optimize workflow. Adoption of such innovations is critical to 3PL providers in terms of providing cost-effective and competitive solutions.

Sumit: After COVID, the need for flexible initiatives has been further enhanced as a result of increasing client needs. There has been significant value and clear operational improvements delivered to our international clients by the internally managed Warehouse Management System (WMS) at lower implementation costs, supported by our own teams. Our emphasis on automation, in particular, RFID incorporation into routine operations, has largely contributed to the manner in which we differentiate ourselves. Although it may seem rapidly easy, the attainment of successful designing, implementation and continuous improvements in these systems has greatly enhanced the durability of client relationships over time. A history of successful global fulfillment of contracts indicates efficient execution, which appeals to new clients and markets that know the real benefits that are missing from mainstream standards in the industry.

Carl: At a major site in China, the deployment of 180 AGVs is transforming operations that were once entirely human-driven into a blend of manual and automated processes. This shift has been made possible largely due to the significant reduction in automation costs over recent years. Previously, the recent decline in costs for automation, such investments were simply prohibitively expensive and provided returns that were far out of acceptability. Under declining automation costs, logistics businesses have the capacity to attain cost effectiveness and provide solutions to clients with shorter payback periods. This is a critical moment that enables many operations to economically quantify and introduce large-scale automation notes.

Real-time tracking is crucial for logistics. How are companies integrating AI and IoT to improve visibility and reduce operational bottlenecks?

Carl: Now, there is much more in the way of real-time tracking, and it is more pervasive through the supply chain than ever before. Whereas warehouse management systems (WMSs) have advanced to provide strong tracking within warehouses for some time, the challenge has been moving that insight into upstream and downstream processes. More collaboration between WMS and TMS technology enables tracking arriving shipments in real-time across large areas, such as across China, where clients can be kept informed using handheld updates. Revealing when shipments will arrive adds value from Artificial Intelligence (AI). Moreover, the use of RFID labels containing anti-counterfeiting measures facilitates organizations’ ability to monitor the location and legitimacy of valuable goods within the supply chain to increase security and quality assurance.

Sumit: The largest benefit for clients is the enhanced visibility and transparency gained when dealing with their daily operations. By utilizing leading technology and making information easily available, our efficiency standards surpass a number of service organizations in India as well as globally. Eventually, the distinguishing feature of these services is transparency and openness to the clients, which translates into significant benefits for their organizations. Such transparency promotes trust and collaboration, and this helps to separate such services on the back of strong client-consultant relationships. Originally stemming from great global supply chain experience, this approach is a unique feature, which, by focusing on trust, outstanding performance and continued value uplifting, promotes long-term relationships with clients.

Last-mile delivery remains expensive and inefficient. What innovative strategies like micro-fulfillment centers and AI-driven route optimization are logistics providers adopting to optimize costs and improve speed?

Carl: This problem remains a challenge for efficiency and cost with the last-mile delivery, though organizations act to correct this by applying increased inventory practices and local positioning of stock under stock fixation. Inventory management solutions help enable 3PL providers to better deploy inventory in proximity to end consumers, thereby eliminating the last-mile challenges and providing for optimized transportation from main distribution centers. The roll-out of these smaller, more local versions of inventory sites – micro-fulfillment centers – is critical to this strategy. In addition, the use of artificial intelligence in the freight tendering process enhances competition and leads to improved transportation finances overall. Firms are also becoming more comfortable in breaking contracts with multiple transportation companies, and this gives more value than contracting with one.

Sumit: Diverse geography and cultural intricacies in the country impose unique problems for the last-mile delivery process that require innovative solutions. Using a 4PL framework, companies can work with verified local service providers who provide tracking and current data resources. The use of this agile network enables clients to enjoy reliable service coverage across the diverse geography of India.

High fuel costs impact logistics profitability. How are firms leveraging EVs, route optimization, and alternative fuels for cost-efficient transportation?

Carl:  Despite the fact that full integration of EVs for the outbound freight has not happened yet in Asia-Pacific, the usage is slowly rising. It is now possible for predictable haulage routes such as those between ports and warehouses to experience greater levels of EV usage. This movement is on the rise being fueled by increasing client desires for a fraction of their freight to be moved by EVs. As a result, there is an increasing use of EVs in freight tenders and transportation planning.

Sumit: In contrast to experiences in Europe, where EVs are being commonly used for bulk deliveries, their availability for such purposes to date in India is not at such levels. While commitment to the use of EVs is made for logistics, acting in an effective manner requires complex infrastructure planning and adequacy to the client’s needs, geographic specifics, and operational conditions. The shift to EVs, even under broader targets for sustainability in 2030 and 2040, depends upon ground-truth business needs and consumer needs, not just ambitious goals.

Sustainability in logistics is gaining traction. How are companies implementing green warehousing, carbon-neutral transport, and circular supply chain practices?

Carl: The basis of sustainable warehouse operation is in dependable data, which gives insight into environmental effects. By using Eco Insights – software which measures the consumption of energy and power, businesses can provide insight into their emissions and carbon footprints. Making this data available, the best methods are identified, such as solar power and biofuels, based on international warehouse experiences. Further, the use of recyclable and reusable packaging practices is geared at curtailing the environmental costs. Organizations through the use of data analytics and sustainable approaches that are economically viable and practical empower clients to produce meaningful decreases in the usage of environment while enhancing the performance of warehouses.

Looking ahead, how will automation, AI, and blockchain redefine logistics operations and drive efficiency in India's evolving supply chain ecosystem?

Carl: The economic strength of the country, growing interest by international investors, and advanced information technology are factors which are the standard for future success. A slow decrease in costs of automation makes it an easier option which is safer for business to take in stores and supply chains. Supply chains are made simpler and more open through greater data volumes, which create a nurturing environment for growth in India’s domestic and overseas markets.

Sumit: India acts as one of the main global hubs for warehousing and supply chains, and gives businesses an opportunity to try and showcase advanced technology solutions. Companies abroad that prefer to invest in India have signaled the country’s capability of creating new solutions that are appropriate for local and export markets. Labor savings and automation complementarities have resulted in productivity improvement and quality, contributing to successful labor management. The cost savings and the optimization of visibility and control that accrue to the manufacturers and the distributors increased as the warehousing capacity increases. Such expansion is worthy of attention for the success of nationwide centralized warehousing, particularly in areas such as automotive logistics.