Catering to one of the most densely populated nations in the world barely leaves time for industries to provide their customer base with an efficient distribution planning process.
Any large company attending to the needs of the people living in even Bangladesh's remotest areas can have an average of 400-500 primary distribution points for their manufactured products.
Manufacturers usually get orders from distributors manually - over the phone, through WhatsApp, or SMS and they have to spend up to seven to eight hours doing data entry on those orders.
"Then there is almost always a separate department doing the delivery planning. This process involves manually figuring out how many orders are going to be in each major location like Dhaka, Chattogram, Cumilla and other places," said Fahim Salam, co-founder of a Dhaka-based logistics start-up, during an interview with The Business Standard.
Every day, large manufacturing companies spend five to six hours making delivery plans for such heavy sales orders and they rarely have any control over the shipment once it leaves the warehouse.
"This is where we see great potential - companies can unlock their capacities by automating such manual processes with software. It can potentially cut down almost 85 percent of time spent on distribution planning," said Fahim.
Many clients who availed of logistics services from his former venture approached and requested in-house automation services, primarily consisting of distribution planning, route planning and process automation. Fahim knew the market was there, and "it is something insanely scalable beyond Bangladesh. We have gotten requests from Pakistan, Canada, and the Middle East as well."
Fahim realised that this idea could add value to the global logistics industry right here from Bangladesh. And that is when Loop co-founders Chris Li and Fahim exited the truckload logistics start-up and ventured out to build Nuport - a company focused on automating distribution, planning and route planning for manufacturers and distributors.
How Nuport operates
Before signing off, Nuport goes through its clients' product portfolios, weight classes, volume and location. After completing companies' product classification, the start-up equips them with a sales order management platform allowing sales representatives to instantly generate orders from the field.
"Once orders are generated, the head office staff members do not need to spend time manually re-entering them - all they have to do is approve orders from any device," said Fahim, CEO of Nuport.
Fahim claims that this process saves their time significantly, almost by an entire working day. "Because all the orders are approved in real-time and put on the map - the company can get the delivery plan instantly. This enables companies to save time and ensure delivery within 24 hours which would otherwise take 48 to 72 hours," said Fahim.
Nuport's focus is on delivery and route planning automation. Instead of giving clients a backend management platform for their orders and deliveries, the start-up just plugs their software via an application programming interface (API) to clients' order management platform.
"Nuport is bringing down manufacturer's workload, making it easier for them to figure out which transport route to take; how many routes to take; how many trucks to call for, and have visibility on the truckload even after it leaves the factory. Every e-commerce company can also use Nuport's services," said Fahim.
Nuport's primary goal is to improve the logistics performance index of Bangladesh. According to Fahim, this automation industry has the potential for high growth but only when the targeted bottlenecks have been resolved in this ecosystem.
Within three months of its launch, this start-up received an investment from a US-based freight forwarder, ODX Flexport, which, according to Fahim "was a huge vote of confidence, as it shows that Nuport is worth investing in."
The start-up works with every aspect of pre-logistics and is enabling third-party logistics companies to maximise operations by unlocking greater capacity from the manufacturing and distribution companies.
After processing an order manually, manufacturers of distributors usually hire a specific number of trucks, based on the order's quota. However, with Nuport on-board, "we will tell them how many transport vehicles they need based on their demand and the volume of orders. And we can take this to the next level by simply integrating with third-party logistics companies where clients will be able to get real-time rates," said Fahim.
Nuport's software helps companies save money through this process. Many manufacturing companies make huge investments in transport vehicles, which are essentially non-revenue generating assets. By using Nuport's services companies can easily outsource trucks and reduce costs.
"What manufacturing companies should do instead is save that money and buy more machinery to ramp up production. At the same time, with this application, they can reduce their billing cycle," said Fahim.
According to Fahim, it takes 10-12 working days to process billing for deliveries, thus delaying the process of payment for everyone working in the supply chain. But with Nuport's application, manufacturers can get the signatures upfront, using a mobile device, so billing can be processed instantly when the product or goods have been delivered.
The rates of Nuport's services fluctuate based on the following a few variables, including the number of distribution points of the company, number of modules - such as order management, analytics, route plan automation, delivery orchestration, and integrations with their accounting systems, purchased by clients; monthly order volume and client's delivery orchestration.
A blessing in disguise
"The Covid-19 pandemic has led many industries to digitisation and Nuport has been welcomed by many decision-makers. Now, manufacturers and distributors can easily assess their reach in Bangladesh and identify where production is lacking and where sales are slacking. Going digital during the pandemic has allowed stakeholders to make faster strategies that are more effective with the help of data," said Fahim, when asked of the impact of Covid-19 on Nuport.
The start-up kicked off its operations with clients who requested such services. Nuport is yet to meet with challenges and its target customers' prior interest in such services made it easy for the venture to jump-start.
Nuport has already received requests from Pakistan, Canada and the Middle East and they plan to expand internationally in due time. The start-up's next step would be automating imports for its client base.
While it is the norm to focus on finished products where freight forwarding companies like Loop provide transport vehicles - Fahim believes he needs to focus on the process where companies are procuring raw materials and planning for distribution.
"There are a lot of problems with these processes and I want to solve them. My next goal is to solve the raw material procurement problem for manufacturing giants," said Fahim.
He wants to close that gap and make the raw material procurement process more transparent and tech-enabled. This will provide much-needed information and data for decision-makers and manufacturers to devise different strategies and even help cut down costs significantly.
Bangladesh is rising in all aspects and manufacturing industries and distributors have begun to automate their manual processes to match the rising demand. We already have established a foothold in the markets, now we need to get better at what is being done and without automation in this digital era - it is almost impossible.