July - 2016 - issue > CXO INSIGHT

Technology: Building a Competitive Advantage in Logistics

Suheb Siddiqui

Managing Director-, PwC

Monday, July 11, 2016

Forward

In his economic theory magnum opus, Wealth of Nations, Adam Smith says, "Wherever there is great property, there is great inequality." That advice may be 240 years old, but it is good counsel for today's logistics providers. The U.S. Commerce department estimates the spending in the U.S. logistics industry to be over $1.33 trillion. With fast changing demands on the industry, logistics providers are making moves to differentiate themselves from competition, create inequality in the marketplace, and gain maximum share of this large market.

Key Issues

In support of these efforts, technology is being leveraged as a potent weapon. As we talk to CEOs, CFOs, CTOs, and CIOs at our logistics clients, a number of developments appear to be at the top of their minds. Here are the key issues in Logistics, based on PwC's experience and analysis:

1. Customer Expectations: The E-commerce revolution has forever raised customer expectations. Customers have come to expect free and fast shipping as standard. Rightly or not, this has affected the perceived value of logistics in the end consumers' mind.

2. Transformation in Retail: The demands from the Retail sector have increased significantly - frequent status and shipping updates, constant improvement to systems to serve customers better, and the ability to buy goods online and pick them up in-store. These combine to exert great pressure on logistics providers and their IT departments.