The last mile delivery is the where most supply chains experience peak inefficiencies and subsequently most of the service costs. It is also the point that can make or break your relationship with the customer regardless of the reliability of your service from the start. With the growth of the digital marketplace there is higher expectation from the end of the consumers to maintain faster delivery times and offer better experiences. Therefore it is imperative for logistics companies to take their biggest last-mile challenges and solve the issues or risk losing customers to a competitor.
High delivery costs
Over half of the operational costs that logistics companies incur goes into the last mile delivery costs. The challenge occurs because of multiple factors starting from high fuel costs, costs of vendors, vehicles, salaries for delivery personnel, inefficiencies in delivery methods and the customer demand to get their goods at faster delivery times. Companies also have to deal with unforeseen factors such as increased purchases, inefficient fleet operations and breakdowns that all escalate costs. A higher delivery cost which ultimately trickles down to high cost of products is a significant factor in shopping cart abandonment when presented as shipping costs on e-commerce stores.
Dealing with high costs starts with improving efficiency from the ground up. A software solution that helps with planning, organization and tracking eliminates unnecessary steps and computes the most optimized routes to delivery. Ultimately it can cut down delivery cost by monitoring instantaneous performance that can reduce costs.
Lack of Visibility
Visibility is the most sought-after parameter in the modern day supply chain. Having real time information on the status of the shipment and its estimated delivery time helps customers to anticipate their orders and improve customer experience. Visibility is also an important factor when it comes to the safety of the shipment as any deviations in the path or delays can raise the risk of theft or misplacement of goods. When dealing with larger shipments reliable instantaneous tracking is what companies depend on to mobilize their logistics for pick up and transport.
With more and more companies offering tracking codes that gives a good visibility, the demand from the customer end has risen. The need of the hour is real time information on the location and status of the shipment so it is visible at every mile of its journey.
Late delivery is one of the biggest challenges faced by shipping companies. When businesses are unable to stick to predetermined timelines it can result in increased costs also a damaged reputation for the brand. There are a number of factors that can contribute to an interrupted schedule. However customers do not care about the reasons and get annoyed when deliveries get delayed. In today’s world of instantaneous results and rewards, delays are unaffordable as it would lead to increased customer churn rates.
To avoid delays it is essential to have systems and procedures in place in the last mile delivery that will buffer against unforeseen events. ERP solutions that can create the most efficient route planning and offer seamless communication between all the parties involved can ensure everybody is on the same page. Through robust tracking, transparency and collaboration, it is possible to have a complete overview over the last mile delivery which can predict delays or react instantaneously in the event that schedules are missed.
Lower efficiency is not an isolated problem linked to one segment of the supply chain. Small bits of inefficiencies at various stages can build up to ultimately end up as higher operational costs or a slow moving supply chain. The use of outdated technology is one factor that can create inefficiency in every step as it is unable to harmonize with emerging technologies to improve processes. Outdated technology also means that it becomes difficult or impossible to come up with adequate route planning that can ensure the most optimal delivery times and delivery costs.
The way to beat inefficient is to upgrade to more modern systems such as GPS tracking installed on delivery vehicles along with IOT to monitor shipments at every step on one platform which can optimize operations to save costs and even predict trouble on the horizon to device proactive strategies.
Technological innovations are the best way to handle last mile delivery challenges in all supply chains. ERP solutions that work with the Internet of Things is already being employed by the best logistics companies to save costs and meet or surpass customer expectations.