How logistics services impact small business growth

Supply chain and logistics play a critical role in business growth – how your goods are moving, its delivery time from origin to destination, the condition goods are received in – all of it impacts inventory, production, sales, customer satisfaction, and in turn the overall business revenue and operations. 

As a micro, small and medium business owner (MSME), a secret to business success is to find a reliable logistics service provider for end-to-end domestic road transportation services.  

The pandemic has been a challenging time for most businesses, especially small and emerging businesses. While many businesses had to close shop, other struggled to survive. With most businesses now recovering from the losses of the last two years, affordable logistics service is a primary concern to ensure no additional obstacles and losses are encountered. 

On that note, let us have a look at how emerging businesses can scale and grow with efficient logistics and road transportation services in India. 

Role of logistics services for MSME growth and expansion  

The logistics sector is highly fragmented. There is air, water, and road transport, cargo, inter and intra city logistics, international and domestic logistics – in short, diverse service options. 

True, there are several large players in the market, but there are individual logistics partners who cater to the remote hinterlands, making them an integral part of the overall logistics ecosystem. 

For MSMEs, this opens a window of opportunities. On the one hand there are global players who offer best-in-class technology, services, prices, and efficiency in transportation, while on the other, there are local logistics providers who understand the regional aspects, routes, terrains, prominent challenges, and bring a personality of their own.  

This is important considering MSMEs have niche requirements that require specific logistics solutions. Moreover, they often struggle with cash flow and resources challenges, making efficient logistics have a direct impact on inventory, stocking, warehousing and overall operations.  

As such, for an MSME looking at growth opportunities, it is not enough to onboard any logistics partner. They need to onboard a partner who: 

• Is dependable, reliable, and known for efficient goods and cargo services

• Offers competitive rates for small and emerging businesses
• Has relevant understanding of terrains, challenges, packaging systems, loading/unloading etc.
• Uses modern technology (e.g., GPS tracking, online payments etc.) to ensure operational efficiency
• Has a wide network and can offer door-to-door logistics services with wide pin code coverage (as MSMEs often cater to customers in remote locations)

Role of logistics and goods transport services in supporting MSMEs going online

It is no surprise that the pandemic caused all businesses to relook and change their business styles and strategies. For many MSMEs, this meant adopting digital solutions for automation and digitisation, to survive and stay in business. 

While there were several steps they took to usher in change, one innovative step MSMEs took was to shift from an offline-only to online store model for B2C and B2B selling. This included: 

• Creating a website and/or registering on eCommerce portals for selling
• Joining social media platforms for brand awareness, customer support and engagement, and selling

• Registering on a digital growth platform to connect with other businesses and find B2B growth opportunities

Logistics, supply chain and inventory management play an important role in growth and digitalisation. From enabling SMEs to adopt to eCommerce systems to managing orders, materials handling, packaging, transportation, timely delivery and dispatch – the contribution of domestic logistics services has been instrumental in every step. 

For instance, using technology, customers can track the status of product delivery. They can receive updates on shipment, delivery scheduled, estimated time of delivery, and confirmation. This streamlines the process, makes it efficient, and even drives customer satisfaction. 

Role of affordable logistics services in driving business efficiency

Trust and credibility are key challenges every MSME faces, in addition to limited budgets and resources. Seldom do people risk doing business with a new brand fearing losses or low-quality products and services. While there are ways for MSMEs to build credibility in time, one simple measure they can take is to ensure that delivery is in-time and in good condition. And logistics systems can impact that. 

Considering that efficiency in logistics is not everyone’s cup of tea, many MSMEs today are choosing external logistics partners for their good transportation. These partners are experts in their fields and based on requirement can offer end-to-end logistics services including loading, door-to-door delivery, packaging, and more. This enables businesses to focus on core competencies, manufacturing and sales, leaving logistics management to the experts. 

For instance, with many MSMEs relying on online selling, shipment, order tracking, and timely delivery can affect customer satisfaction. Refunds and returns based on poor delivery experience (e.g., damaged or expired products) can affect overall profits and margins.  

Not surprisingly, many large-scale logistics service providers in India are building technologically-sound logistics systems to improve operational efficiency. With higher reliance on automation and new technologies like IoT (Internet of Things), RFID, AI (Artificial Intelligence), robotics, and others, there is reduced expenses, manual errors, and time spent in paperwork.  

The new era of logistics management for MSMEs

MSMEs and emerging businesses play an important role in the country’s economic growth, contributing to its GDP, providing employment to many, and creating opportunities especially in the rural sector. 

An efficient logistics system can enable them to grow their business, bringing socio-economic development across the country. 

There is demand for logistics solutions among MSMEs. And the right solutions will enable them to scale, expand and grow.