Supply chain risks | By M Hussnain Saleh

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Supply chain risks

LOGISTICS is considered an important component of business operations and has become a critical factor that plays an important role in business success. Logistics is the movement of materials and goods from the point of origin to the point of use.

It is part of supply chain management which includes inbound and outbound transportation management, warehousing, material handling, packaging, information processing and exchange. Competition today focuses on service rather than physical product.

The cost of logistics activities has a large impact on the company’s income. Third party logistics partners are becoming a popular choice in the 21st century.

Third party logistics is the activity that covers the transport needs of the company by providing excellent services. It involves subcontracting companies to carry out their logistics operations.

Logistic capacity is an essential ability for the transport and logistics company to convey value and services to the customer. However, supply chain uncertainty and risk set the bar as operational excellence is achieved.

It is a real surprise that the logistical capacity, which is the competitive advantage to drive customer satisfaction in the organization of couriers and the supply chain, is the weakest area that needs a high margin for improvement, especially in a large range of product availability, respond quickly and on-time deliveries to acquire customer satisfaction.

This has resulted difficulties in commercial operations, mainly in supply chain networks. The current volatile environment has led the supply chain to face enormous uncertainties and risks in Pakistan.

This has resulted in some obstacles being created for supply chain networks to achieve preferred logistics performance subject to timely deliveries, greater customer satisfaction and greater efficiency.

Today, every other company uses third party logistics (3PL) to deliver and manage logistics operations in the supply chain and among them, the courier industry is the key player and the fast-growing sector.

The Pakistani courier industry has faced some major uncertainties that are disrupting its logistics performance and, as a result, needs central attention to provide a path for the Pakistani courier industry to run its operations smoothly by identifying the main components of supply chain uncertainty.

In Pakistan, there are many problems such as political instability, road infrastructure, buildings, etc., due to which these courier service providers somehow face the problem of delivering the package on time to some certain areas of Pakistan.

In today’s era, courier delivery is different from traditional rail, sea, road or air transport, courier delivery offers fast door-to-door delivery, and customers can directly participate in the delivery processes.

For example, problems in green logistics, blocking of traffic, inefficient and poor exchange of information between trading partners are the most common problems that can be generalized to provide guidance.

Pakistan, a developing country, is different in many ways from the courier industry of developed countries.

In advanced countries there is a greater dependence on technology, however, in Pakistan couriers have moved towards incorporating the technology, but not to a greater extent.

There is a big difference in the roads and regional conditions of developed countries and Pakistan, which marks it as one of the essential factors to consider when analyzing the obstacles to poor performance in the logistics sector.

Some other problems that Pakistan’s logistics industry has faced are railway conditions that cannot even meet the transport needs of passengers. In Pakistan, trucks are mostly used for freight transport. The road transport sector is not organized, and the business sector has always been reluctant to use it.

On the other hand, advanced countries have a wide range of transportation and government support systems in their sector.

Pakistan logistics and courier services are improving but proper long-term strategies are needed to be developed and implemented to cater to these supply chain risks and uncertainties.

—The writer is contributing columnist, based in Islamabad.

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