India’s supply chain sector has seen revolutionary changes and tremendous growth in the past couple of years. The industry valued is valued at $220 billion and as per World Bank forecasts, expected to grow at 10–15% annually and remain one of the top contributors to the national economy. Four key factors, we strongly believe, have put the supply chain industry on this rapid growth path:
- Macro-economic changes including the ease of doing business.
- Policy and regulatory changes like the implementation of GST, e-way billing, etc.
- The accelerated development of technology and the digital transformation of business processes.
- The rapid growth of the e-commerce industry in India which are heavily dependent on the supply chain.
The first two are push factors that caused major churn in the supply chain market, especially among large corporate players. These factors also pushed the players whose business models were rooted in and dependent on the Supply Chain to quickly responding to these major macro-economic and policy shifts with internal mandates to improve their company’s supply chain efficiency and usher in cost-effectiveness with newer models. The newly churned markets required cutting-edge business models and innovative solutions that infused a great level of efficiency, accuracy and cost-effectiveness in the supply chain. And technology has been a great enabler for doing so. Accordingly, several startups — new and existing — came up with cutting-edge innovations in the supply chain industry, especially for the B2B space. The last factor has been a major pull factor for logistics and supply chain startups to enter and thrive in the B2C space.
Despite these rapid changes and growth of the supply chain industry, two problems still persist:
- The larger corporate players are not aware of the several grassroots innovations happening in smaller startups and as a result, a large gap exists in the investments in the supply chain industry. Barring few sub-sectors like 3PL, E-commerce, trucking, etc. which receive maximum investments and attention, the rest of the sub-sectors like maritime logistics, electric mobility, etc. are severely underinvested in. Overall, the industry is underinvested in by financial and strategic investors and in many cases, the investments go to traditional and linear models.
- The contribution of the cost of logistics to GDP is at 13–14% in India in comparison to the 8% contribution in developed countries. This means that there is still scope for a great improvement in the supply chain industry.
Supply Chain Labs: Envisioning Unparalleled Efficiency and Growth in The Supply Chain Sector
In the above context, Lumis Partners, an operating investment firm and a leader in the logistics and global supply chain investment space, engaged in extensive research and experiments to get a deeper understanding of the situation and find effective solutions to bridge the gaps. Accordingly, Lumis Partners launched India’s first supply chain accelerator programme — Supply Chain Labs (Supplychainlabs.in) with the vision of powering India’s supply chain sector to unparalleled efficiency and growth through the acceleration of high-potential early-stage startups operating in this space.
Supply Chain Labs (Supplychainlabs.in) is a unique and cohesive programme to support high-potential, early-stage startups with unique solutions and cutting-edge models in the supply chain domain to fully harness their growth potential and add tremendous value to all their stakeholders. This first-of-its-kind programme in India has strategic partnerships with MIT as the academic partner, YES SCALE, Yes Bank’s corporate innovation program as the corporate innovation partner and AWS as the technology partner and is aiming to develop a strong and resilient supply chain ecosystem in the country.
Lumis Partners is a global leader in the logistics and supply chain investment space that is committed to supporting and partnering with visionary founders who share its passion for solving complex problems with global relevance and creating extraordinary impact and tremendous value at scale. We are not a traditional VC firm and strongly believe that the relationship between startups and investors must be a two-way process, not a one-way street. We fully understand the need for tailored handholding support and a strong ecosystem for startups to thrive and flourish. Supply Chain Labs, therefore is a formalized way for us to support India’s cutting-edge supply chain startups.