Need of hour – E-documentation in Road Transportation

by | Mar 22, 2020 | Blog

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Many articles have been written detailing out advantages of digitalization of documents in road transportation space . However, the acceptance of digital document is still negligible. There are myriad reasons for low acceptance and most of them relate to inertia and internal constraints in the organizations. The technologies are ripe and proven but the companies in India and in most of the countries have not considered digitalization of documents as strategic.  The leaders must now take notice as the digital documents  are not only essential for reducing costs or improve efficiencies but also for saving the  businesses from crippling consequences.

Background

It is worthwhile to note that documentation are important part of logistics of goods . They prove provenance, quality , quantity , ownership etc. among other things. Since the goods change many hands, documents are the common thread across a long and complex logistics chain. At present, they are carried in hard copies and hop from one part to  another of the chain with proper recording of trail. To illustrate with a simplified example , a copy of Lorry Receipt( LR) carry the necessary information about quantity, product name , reference to invoice & E-way bill, Vehicle details consignee etc. They are carried mostly by the lorry driver and when the consignment is delivered endorsement is taken on the hard copy with notings, if any, by consignee. The LR copy is the principal document for  processing of bill of transporter. By insisting on hard copies of documents , a customer enjoys certain tactical advantages such as longer credit cycle by the transporter. There are genuine reasons as well such as any loss or pilferage is noted on the LR.

On the flip side,  the documents in current form( hard copies)   need to be kept  in the same way for later references such as internal audit, GST purposes, dispute resolution, as evidence etc.  For IT savvy companies , data contained in LR is punched manually causing mistakes and inaccuracies. The documents are difficult to analyse for strategic and analytics insights . As an example, the data in hard copies is very difficult to be  used  for finding which customer and drivers are giving problems.

With the spread of  COVID – 19 virus , these documents should be looked from another point which may have lasting negative impact on the entire logistics  chain. The documents act as carriers to pathogens and can spread from persons holding or touching  it. It may  be appreciated that these documents move from place to place with innumerable touch points making all things they come into contact with potential carriers. The documents are moved through at least 10 pairs of hand from generation to bill processing. Thus, the documents can play significant role in community spread of any pathogen or communicable diseases. The documents are kept in unhygienic conditions which in turn  provide thriving conditions for pathogens.

Some may suspect that  digital documentation is very difficult due to lack of proper technologies or it is very expensive. The fear is unfounded in today’s scenario when technologies and their applications are booming at an unprecedented pace.  Technologies for digitalization of documents are available and can be used off-the-shelf with little implementation efforts. Even the trust issues could be resolved by technologies like blockchains(  Elsewhere I covered why blockchain tech is not the solution in India but the point is that technologies are available to replicate the current usage by digital means)

Why digitalization has not taken roots?

So why the digitalization of document has not been adopted yet ?   I will try to propose few answers, which by no means exhaustive, based on my experience of the industry.

First, digitalizing documentation for road transport is  very rarely pushed by Senior Management. It is hardly perceived as a strategic matter that needs constant focus. In fact, lack of management focus may be seen as the only road block as other constraints can be overcome by little more involvement of the management. The leadership sees logistics as a cost centre and which can at best be handled by the middle-management and not above. I have rarely seen in the minutes of board meetings that how logistics can increase revenue and drive motivation amongst employees.

Second, accounts and audit teams still insist on hard copies of the documents. The accounts team usually fails to see beyond immediate advantage of extending credit by pushing for hard copies. This is true for even the largest and most aware companies in India. For instance, our simple idea of sending digitally signed document was shot down by one of the largest consumer goods Indian companies. The reason again is that it has to be a management call despite digital signature being legally enforceable.

Third, the logistics teams are averse to change as they are used to work in a certain way. Moreover, any new system will require efforts and training by the company.

Fourth, the choice of technologies is a question which cannot be resolved by the logistics team alone and that will require coordination with IT team and initiated by senior management .

But, there is no time to lose

 

As discussed before, the adoption and move towards digitalization can only be pushed by the top management and the boards of the companies.  The spread of COVID-19 also gives a reason for the management to think of the initiative and implement digital documentation on war footings.  If COVID -19 persists , which is seen as fairly probable , for long time , the logistics chains will go for major disruption. Nature of logistics industry also makes the industry susceptible to worsening the pandemic across the country.

It may be now or never!

 

 

Contact us :

Rohit Chaturvedi
rohit.chaturvedi@transporthub.com

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