1001 Startup Ideas – Cloud based Logistics as a Service (LaaS) | YoStartups

This 1001 Startup idea from YoStartups is to offer “Logistics as a Service” using cloud computing which can connect e-commerce, retailer’s carriers and shippers on the same platform.

Market Definition

According to Gartner’s research, cloud-based software in logistics is estimated to increase by 40 percent in 2017 due to its ability to provide 360-degree visibility, real-time accuracy, tracking and tracing of shipments.
According to CSC, 82% of the respondents in a survey reported savings when they moved their critical applications to SaaS-based platforms. Big cloud infrastructure providers like Google and Amazon are predicting a 44% YoY growth from 2014-2019 over traditional onsite computing. IBM in a survey covering over 800 IT leaders across 13 countries and 24 industries, reported that the companies adopting cloud-based solutions witnessed twice the revenue growth and 2.5 times the profit growth over the non-adopters.

These complex but globally consistent trade environments can be managed through cloud computing by offering Logistics as a Service. This type of business model can provide modular services to various stakeholders on demand. As these services are cloud-based, they don’t need traditional IT infrastructure to scale up and can be centrally managed or upgraded.

Competitor Analysis

Transporeon

Transporeon, a cloud-based logistics platform offers an end to end supply chain management solution right from ordering to tracing the shipment till the last mile delivery, thus simplifying the communication between all the parties helping them streamline production, distribution and pick up slots. More than 1,000 shippers, 55,000 carriers, and 150,000 users in over 100 countries are currently connected to the platform.

Transporeon Group offers 3 SaaS-based logistics platforms: TRANSPOREON for transportation management; TICONTRACT for e-sourcing, procurement, and freight bill auditing; MERCAREON for retail-specific dock scheduling.

aCommerce

aCommerce is a leading retail solutions provider present in Thailand, Indonesia, Philippines, Malaysia, and Singapore, bringing global brands and retailers online. They are a single platform that offers end to end solutions for e-commerce industry like inventory management, smart shipping solutions, online store content and they are compatible with major e-commerce platforms in S.E Asia.
They also offer fully integrated e-commerce business management solutions with supply chains and business intelligence dashboards.

Pain Point and Target Audiences

Large shippers often face difficulties and complications during software platform rollouts as they require trained workforce at each deployment location, along with compatible hardware.
Shipment Data is often held in Silos and cannot be accessed from outside on demand.
Dedicated IT team required for maintenance, upgrades and bug fixing. Implementation times are longer as deployment cannot be done across multiple locations due to the risk of business disruption and hardware-software compatibility issues.

Data has to be manually updated or parsed in different geographies, which leads to inefficient tracking, tracing and scheduling of shipments.

Large, medium and small shipping companies, carriers, manufacturers, and retailers can be connected to a single cloud-based logistics management software for higher efficiency and ease fo management.

Value proposition

Cloud-based platform rollouts are more efficient as they can be deployed at multiple locations in real-time. They need no hardware changes and can be accessed by any internet enabled device, which makes information recording and sharing real-time.
Cost of implementations is cheaper as it requires no specific upgrades to hardware and network infrastructure. The operating costs are fixed, and there are negligible breakdowns, upgrade, and maintenance requirements.
Cloud-based services are more secure and offer recovery and backup services.

Products can be tracked in real-time through their entire logistics journey as data is updated at each transit point. Digital tracking of a product at each stage of its lifecycle reducing the frequency of lost products; synchronizes shipment components and updates current inventory records in near real-time helping to synchronize inbound and outbound shipment schedules.

The solution also results in a reduction in specialized IT workforce costs due to a reduced IT footprint is a bonus.

Business Model

The proposed startup will have to build an online platform which can be used to connect all the members of a complete supply chain like manufacturers, shippers, carriers, retailers, etc. Then the subscription for the software can be sold on a quarterly or annual plans. The software can also work on a basic subscription fee and charge a fixed percentage on the savings generated due to the implementation of the software.

Way to Market

The Proposed startup after building the online SaaS platform will have to onboard local logistic service providers for a use case to refine the project for a full feature release. The startup can work on initial modules like orders, scheduled pick-up, invoicing, pricing RFP bid management, etc.

In the second phase, the platform can start integrating, contracts, track and tracing services for trucks.

In the third phase, the startup can start working on API’s that can integrate all the major Supply Chain ERP’s, WMS and TMS systems. Once the startup has on-boarded all the major users on its online platform at a global level, it can start using machine learning for predictive analytics and optimizing the efficiency of the shipment cycles.

Milestones

Y1, Q1-Q2 – Building platform and use case with a local logistics provider for the product refinement
Y1, Q3 – Launch of Initial modules like orders, pickup scheduling, invoicing, RFP bid management.
Y1, Q4 – Start working on APIs that can integrate all the major Supply Chain ERPs, WMS and TMS systems
Y2, Q1-Q2 – Integration of APIs with all the majorly used SCM, WMS and TMS systems.

Investment Needed for Prototype

The proposed startup can approach any of the renowned startup accelerators like YCombinator, Salesforce Incubator, L-Spark, Alchemist to raise funding of up to $120k. Start-up can use the funds for the building of the platform, generating market traction, etc.

Team Capability

The founding team will need a full stack developer with experience in HTML5 and JavaScript development. The platform will have to ensure compliance standards are met (SOX, HIPAA, FINRA, data locality) and also have APIs inbuilt to integrate with third-party platforms. The startup will even need veterans who have extensive work experience in transport and logistics industries to leverage their domain experience and industry connections. A cybersecurity expert to ensure that the startup can meet all the latest security protocols.

Investors/Expert Take

World Bank’s Logistics Performance Index(LPI) anticipates that the rise in Economic Power of E75 countries, TPP (Trans-Pacific Partnership) agreement for trade and the Chinese investments in One Belt One Road initiative could increase trade volumes by 11% among member countries. The standardization of trade agreements, integrated supply chain systems can reduce tariffs, customs, and import.
However, data migration, latency issues and integration of modular logistics modules are some of the problems that need to be addressed for quicker adoption. Perceived data security concerns regarding SaaS platforms also need to be addressed through education and use test cases.

In case you are looking at scaling or launching a venture on similar lines, you can apply for our virtual acceleration program Excelrate on our website, Yostartups.com, Yostartups’ Excelrate program will help you in streamlining and structuring your startup idea. We have limited scholarships and discount packs for deserving startups, depending on the strength of your application, you may qualify for a discount.

Tarun Kumar

YoStartups is a Pre Accelerator and it empowers entrepreneurs to propel their business ideas into successful ventures. Yostartups’ core mission is to take the message of entrepreneurship to 1 billion people globally by 2020, as on date Yostartups reaches out to over 100 million people globally through its direct and indirect channels.

*Any information given in the article does not constitute any warranty of marketability or fitness for a particular business idea for any market or industry segment. It is the readers’ sole responsibility to further research and assess the market opportunity.

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