The worldwide spread of the COVID-19 pandemic has disrupted how people buy products and services and how they perceive e-commerce. The standardized lockdown rules across India and the growing hesitation among consumers to go outside and shop for essential goods have tilted the nation towards e-commerce.
Consumers have switched from shops, supermarkets, and shopping malls to online portals for the purchase of products, ranging from basic commodities to branded goods. Since the norm of social distancing has been initiated for almost the entirety of 2020, the scope of online purchases and online businesses is expected to surge. Many people are embracing the concept of online retail and there’s been a visible surge in first time users on e-commerce portals. But this boom for e-commerce portals have only meant an increase in pressure on the logistics industry – an industry that employs over 8 million people in the country.
Well, to understand the bearing the pandemic’s had on the logistics industry and how’s technology played a key role in tackling some of the problems at hand, we spoke to Kapil Bharati, who’s the Chief Technology Officer and Co-founder at Delhivery – one of India’s biggest B2B & C2C logistic courier service providers.
An IIT Delhi alumnus and a mechanical engineer by qualification, Bharati has been working on the design, development of complex large-scale applications at Delhivery and specifically leads the Technology and Data Science divisions, providing overall technical direction to the organisation.
Here are some of the insights that he had to share with us.
Question: When you think of supply chain services and logistics from a lay-man’s point-of-view, the use of technology definitely isn’t the first thing that comes to mind. Being one of its co-founders, could you tell us a bit about Delhivery’s journey in India over the past 9 years, while helping us understand how key a role technology plays in it?
Kapil Bharati: Since its inception in 2011, Delhivery has become India’s largest supply chain services company. Today, with our nationwide network extending beyond 17,500 pin codes and 2,300 cities, we provide a full suite of logistics services such as express parcel transportation, LTL and FTL freight, reverse logistics, cross-border, B2B & B2C warehousing, and technology services.
We aim to build the operating system for commerce and utilise our scale and learning from the Indian market globally.
Our strategy is inherently composed of two interlocking flywheels – logistics and technology. We continue to aggressively invest in building world-class logistics infrastructure and couple it with cutting edge technology, design, and engineering capabilities.
The flywheels represent a fundamental pillar of our philosophy – deliver at scale to reduce costs; generate and process data at scale to bring further cost optimisation and service level improvements in our operations. These have allowed us to deliver speed, reliability, and cost-efficiency to over 10000 customers across our network that reaches over a billion consumers.
At the heart of this transformation is the ability to capture, store, and process huge amounts of data.
As we deliver over 1 million shipments every day, we undergo 30 million changes in the state of shipments in our network and generate over 100 million events from over 40k devices in the network. Leveraging machine learning and artificial intelligence techniques, each event makes our system more efficient – optimising facility locations, transportation routes, and movement of goods, predicting future events, creating dynamic last-mile delivery routes, and ensuring consistently high service levels. This ability acts as a significant differentiator and has powered our growth over the last 9 years.
Our vision is to create a global technology and data platform to provide real-time insights to businesses and create optimisation opportunities and real-time decision support for logistics and supply chain players worldwide.
Question: A large chunk of the country’s services has been almost forced to adopt a tech-first approach ever since the COVID-19 pandemic became a part of our lives. How has Delhivery embraced this change and do you think the pandemic has thus served as a blessing in disguise?
Kapil Bharati: The fast spread of COVID-19 and multiple nationwide lockdowns posed serious challenges and uncertainties in our supply chain network.
Our technology stack acted as a significant differentiator during this time, enabling us to answer the holy trinity of what (essential/non-essential goods) could move where (containment zones; red/ orange/ green zone) and how (active lanes/ facilities).
Within the first 48 hours of the lockdown, we repurposed our address disambiguation and product categorization systems to identify customers living in the containment zones and essential shipments. Control systems were put in place to provide visibility and direction to our ground operators. These were crucial ingredients for businesses to reboot, as we advised our clients on the products, they could ship without the fear of getting stuck. We were operational in 4500 pin codes within 48 hours of the lockdown and over 15500 pin codes within a week.
Safety of our customers and employees is a top priority for us. Our teams are following stringent traceability protocols, undergoing daily health checks, and are stocked adequately with face masks, hand gloves and sanitizers. We are doing our best to deliver your packages safely. pic.twitter.com/xfZdWnjKKj
— Delhivery (@delhivery) August 6, 2020
The closure of physical retail forced brands, distributors, and retailers to relook at their business models and directly connect with customers. We launched new services to quickly onboard such businesses in the healthcare, pharma, and food domains and set them up to adopt digital technologies for hyperlocal and contactless deliveries.
Internally, one of the major changes has been the organisation’s split into an arm that works relentlessly on the ground and another that works from home to power technology, products, BD, and client experience. In the crucible of the pandemic lockdown, our teams showed remarkable resilience in adapting to both environments, expanding for us the possibility of attracting talent irrespective of where they are based.
Question: How big a role do you think machine learning and artificial intelligence play in being components of change in the landscape of the logistics industry as a whole?
Kapil Bharati: AI/ML starts to play an increasingly important role as we scale our operations to deliver millions of shipments a day. It becomes very hard at this scale, if not impossible, for ground operators to make optimal decisions on how shipments must be routed through the network.
AI/ML models allow us to automate this decision-making and push the boundaries of speed and efficiency as systems become capable of simultaneously evaluating thousands of variables that affect a shipment’s life cycle. As we ingest the huge amounts of data generated by our operations, we are constantly building the intelligence that powers these decision-making abilities.
Meet Mushtaque, our Last-Mile Agent, who is a resident of Mahim, Mumbai and has been associated with us for the last three years. If you wish to partner with us, please login at https://t.co/IGWIYZfqGr for more details. #PartnerWithDelhivery #PartnerTestimonials #PartnerProgram pic.twitter.com/N2VJYX8Kkh
— Delhivery (@delhivery) September 30, 2020
Let’s consider a simple example – the resolution of user addresses. In a country like India, one of the fastest-growing consumer markets, the address system is not highly structured. Most companies will lose visibility of an address beyond the pin code (median area of 80 sq km). Our proprietary address resolution engine, Addfix, has been trained over last-mile GPS traces across 750 million successful deliveries to help us accurately predict address locations to within 200m.
Similarly, our other AI/ML systems can predict preferred timeslots for attempting a shipment, predict whether a shipment can be flown or not based on its description, learn on-ground movement constraints based on recent location data, amongst others. These insights feed into our optimisation models, enabling us to ensure our shipments move at the fastest speed at minimum cost while respecting operational constraints and customer preferences.
Altogether, these systems work in tandem to minimise dependency on human decision making to give us a competitive advantage when it comes to both speed and efficiency. Every player in the logistics industry will need to adopt these tools across the board to remain competitive in the days to come.
Question: The global supply chain is already undergoing a major transformation enabled by Big Data and powered by data science teams using advanced technologies like artificial intelligence, blockchain, and robotics. We obviously hear businesses summarize this into fancy terms like ‘Industry 4.0’ and ‘Supply Chain 4.0’ but do you see supply chain digitization being a big differentiator in ensuring better efficiency?
Kapil Bharati: The fundamental change over the last few years has been the omnipresence of devices that generate rich data, the rise of the gig/ sharing economy, and the ability to process vast quantities of data in the background to create systemic intelligence or near real-time in the foreground to provide optimal direction.
This paves the way for a transformation from a highly controlled environment with rigid operating procedures, intensive training requirements, and a lack of adaptability to on-ground situations into an environment that continuously builds intelligence and can flexibly and dynamically direct variable supply through mobile/ internet devices to achieve objectives optimally. This kind of environment will not only be more flexible and adaptive but also capable of unlocking never seen before efficiencies and levels of service.
A key feature of this digital transformation will be the ease of collaboration and the participation of multiple types of actors – whether it is a large FMCG enterprise or a trucker with two trucks, or a college student with 4 hours free to earn some money, or someone with spare space in their warehouse.
The future competition will be between the quality of ecosystems that a logistics player operates in and not just other logistics players. These ecosystems will grow stronger, smarter, and larger with the participation of more players and the addition of extensive and diverse data sets. The Delhivery platform will be one of the first such ecosystems that will spur the real-world transition of domain actors to Supply Chain 4.0.