Authored by: Ankur Singhai | General Manager – SCM ( E-Commerce)
Mumbai | July 4, 2018
Amazon and Flipkart have become common names in the Indian households. Not only in metro cities but even in the far-flung countryside. Online shopping, though small in proportion, is growing exponentially. While shopping online, most awaited days by the consumers are the Amazon’s Great Indian Festival Sale, Flipkart’s Big Billion Day Sale etc. These big ‘sale’ days, generally referred to as peaks in retail & logistics industries, only add to the overall joyous mood. Buyers flock to these companies to get the slice of the products available at unbelievable discounts. And then they expect that the correct product is delivered at the earliest. Ever wondered how the e-commerce companies maintain and sustain the same delivery promises made during these grand sales, as they do during non-peak days?
One of the unique challenge faced during this time is the Spike (4X to 10X) across categories for a very short span of time. Organising capacity – whether skilled and semi-skilled manpower for core warehousing/sorting activities, delivery and other associated jobs, space, equipment, vehicles, etc for this short period is a humongous task and requires meticulous planning. Rapid scale-up and scale-down makes this more complex.
Here comes the “X Men and Women”. These normal human beings, just like us, work relentlessly behind the scenes and ensure that the order which you have been keenly waiting for, reaches you in time! Here’s a sneak peek to what happens at the back-end:
Multiple Challenges During Peak
Manpower: Amongst all the variables, manpower is the most critical resource in e-commerce logistics. The industry requires semi-skilled/skilled manpower who are comfortable operating different digital applications specifically on a handheld device or a mobile phone. Not only do these people have to be onboard quickly (after quick background checks within an appropriate time) they also must be trained thoroughly. However, if there is any absenteeism or attrition during this critical phase, it multiplies the stress on the system.
Vehicles: Vehicle and driver demand/supply across the different logistics legs (Cross-country express line-haul movements to last-mile) determines the success of peaks. These vehicles are needed for a short period and therefore must be deployed in an ad-hoc manner.
Other assets: There are multiple other factors/assets, from real estate/ space to even devices like portable GPS on ad-hoc vehicles, which must be effectively planned and deployed across the network.
With two of the most important resources, manpower and vehicle/driver being ad-hoc during the peak, safety and security related risks get magnified. Apart from human lives, the probability of damages to packages or them getting lost, needs to be monitored closely. Thefts from facilities or during transit too see a spike during peaks and must be effectively controlled.
Despite all these challenges, performance during peak remains non-negotiable. Across the delivery network, there are multiple metrics which need to be continuously monitored and exceptions, if any, should be handled and resolved almost on a real-time basis. This requires significance of managerial bandwidth and coordination across the chain to deliver a successful peak.
The Success Mantra: Technology At The Core
So, what does it take to handle the E-Commerce peaks effectively?
In addition to the human resources and managerial capability mentioned above, technology plays an important role. Every peak is getting bigger in terms of volume and complexity. This requires continuous evaluation of new technology based solutions that are cost effective. E.g.Crowd sourcing of vehicles and delivery associates/sorters, sort centre automation, route optimisation, etc.
Our Control Tower operations have been critical in handling the peaks. e.g. if a Delivery Associate is lagging on his usage of MPOS (Mobile point of sale), then the team calls him and enquires about the challenges and share the statistics. This ensures that he gets back on track for the remaining route.
In the background, key business processes and structures play a critical role. For e.g. over the last couple of years and many peaks, we have been able to maintain a granular database of the performance of business partners, especially during the peak. We are then able to run basic analytics on it to identify the right business partners (and the right set of people amongst them) for different legs across different geographies. The ecosystem is further strengthened by working out on specific training needs and imparting them through both mediums, in the classroom and on the job. To top it up, unique incentive structures are designed which link up to different performance metrices.
To sum it up, handling e-commerce peak is one of the most challenging situations. It needs good technology and more importantly, The X Men and Women!. They are a different breed!