E-commerce growth to drive logistics business in PH

E-commerce in the Philippines is going to post very high growth that will drive the logistics industry to improve to cope with demand for a seamless experience operation from manufacturer to retailer to customer, according to JDA Software Group, Inc., the world’s leading digital supply chain solutions provider.

Amit Bagga, JDA regional vicepresident for Asia Pacific, told reporters during the company’s event dubbed “The Next Game Changer: Optimizing Supply Chain Planning and Logistics” held Wednesday at Okada Manila that e-commerce is growing exponentially in the country.

JDA has been focused in providing the retail supply chain solutions in the country in the past 15 years already.

With strong e-commerce, Bagga said the next thing to flourish is the logistics industry. Already, JDA is expanding its product offering in the country from the local retail supply chain solutions into the more challenging local logistics solutions to provide a seamless experience.

Its retail supply chain solutions business in the country accounts for 80 percent of its business while the logistics business is only 20 percent. But Bagga was confident that with its transportation and warehousing solutions, JDA will be able to make logistics a very large component to its business.

“I am confident we will exit out with logistics becoming a very large component of our business. So, minimum of 30 percent minimum, aggressively I would say logistics will be 30 to 50 percent of our business here in the next two years,” he said.

So far 8 of top 10 retailers in the country have been using the JDA retail solutions for a total of 15-16 retailers.

At the event, JDA was offering its Transport Management Solutions (TMS) for local logistics firms that would like to provide seamless experience and cost efficient operation.

“Logistics companies should stop thinking themselves as moving a box from one point to another,” he said.

Logistics firms need data to make informed decisions. Logistics solution is also more important because of the country’s archipelagic situation and the cost of inventory. To further save on cost, logistics should be tied with the cost of inventory, he explained.

“Look at how you can customize your transportation to lower cost of inventory, that is the real strategy,” he said.

According to Bagga, JDA TMS is unique on two things because it does not only talks about planning, movement of goods, but optimizing the routes, network, optimizing inventory movements to give the logistics company the entire scenario that it can play to optimize and minimize cost of inventory.

The other unique feature is it can point which warehouse to use and how much time will it take to move that, how to connect with labor and optimize labor.

Coming from the discussion with top CEOs and top logistics heads at their event, Bagga was optimistic to be able to close deals with 2-3 logistics companies this year.