LETTER: The radical growth of the e-commerce sector in recent times has made logistics a field to overcome barriers in the aim to become a trillion-dollar industry by 2030.
There is an increasing number of logistics-based start-ups making their mark globally, bolstered by strong entrepreneurship, creative innovation and advanced technological capabilities.
Logistics can be a rewarding avenue for young entrepreneurs, but not without the typical challenges faced by other start-ups.
As such, entrepreneurs must be wise and cautious in establishing their position in the industry. To describe this unique phenomenon, we have coined the term "logispreneur", a portmanteau of logistician and entrepreneur.
Logistics is an uncertain and complex industry, where any amount of theoretical knowledge will be insufficient to tackle practical problems.
We believe it is necessary that a logispreneur should first obtain work experience in supply chain management and logistics before setting up his or her own company.
Real world awareness of the typical hazards and barriers in business logistics will help logispreneurs navigate challenges in their enterprises. Another major benefit of prior work experience in logistics is the opportunity to establish one's credibility in the industry.
This would also be the time to create networks with suppliers, clients and other parties vital to the supply chain. These connections will be invaluable when entrepreneurs set up their logistics company, where success will be heavily dependent on a strong supply chain.
The logispreneur should ideally scout potential customers and obtain logistics and transport contracts as early as possible, so that resources and time can be conserved for future needs.
A major hurdle faced by logispreneurs is that of securing and managing financial investments. The management of finances in the early days of a start-up is a demanding and precarious duty for anyone.
Entrepreneurs must familiarise themselves with all aspects of finances to reduce or eliminate the risks of serious debt or heavy expenditure.
Start-ups which offer an innovative or radical concept may be able to secure financial support from government grants, banks, venture capitalists and the like.
Becoming partners with one or more individuals who are equally passionate and committed to the business idea is also a solid method of acquiring funds.
A logistics start-up faces the complication of ensuring there is enough capital to start with, considering the fact that any potential profit will arrive only after the products have been efficiently shipped and delivered.
Acquiring this money could take weeks or months and, as such, logispreneurs must ensure that there is a sufficient pool of funds that can be accessed any time.
Fully comprehending the significance of logispreneurship is vital to advance the national economy. The concept of "logispreneurial ecosystems" must be given more consideration by the government, private organisations and higher learning institutions.
This is to ensure the existence of varied programmes and policies that support the growth and success of logistics-focused entrepreneurship projects, which will further improve regional employment and productivity.
DR VEERA PANDIYAN KALIANI SUNDRAM
Associate Professor, Faculty of Business and Management, Universiti Teknologi Mara (UiTM) and President of Malaysia Logistics and Supply Chain Association [MLSCA]; and
PROFESSOR DR JAAFAR PYEMAN
Director, Institute of Business Excellence (IBE), UiTM
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times