1) Why is last-mile delivery so important? Why is there such a big deal about it?
Last-mile delivery is the last step in the delivery model. It is the last leg of the distribution process that begins when a parcel is shipped from a distribution center to its final destination, which is typically an end-customer’s address.
Not only is it the most crucial part of the delivery model—since, customers expect to receive their packages on time, quickly—but it is also the most expensive part of the Logistics and Distribution model. Also the most challenging logistically, it often creates the most bottlenecks, and is highly resource-intensive,
2) Choosing the best last-mile solution
Let us look at some key features that you must consider while selecting your last mile delivery solution.
i) Automated dispatch and task allocation: This feature is absolutely core to a last-mile delivery logistics solution since it reduces delivery processing time, as well as last-mile costs by assigning the best-suited fleet driver to the correct delivery at the correct time.
Research has shown that the cost savings achieved by using automated dispatch-management software improve profitability by about 10% while reducing travel times and fleet utilization times by about 15%.
ii) Route Optimization: Inextricably linked to the automated dispatch system described above, route optimization is the all-important function that identifies the fastest and most efficient delivery routes.
It balances several variables – including location, capacity, traffic and weather patterns, and road quality—to achieve the optimal delivery route. Modern automated last-mile systems also enable central teams to communicate directly in real-time with fleet drivers for any last-minute changes en route, delivery windows, (etc.). Some key functionalities include:
- Reduced delivery times
- Minimized fuel consumption and fleet maintenance costs
- Route visualization
- Eliminated/minimized bottlenecks
- Improved customer satisfaction
iii) Integrations (e.g., via API): The difficulty of integrating last mile software with existing systems (MIS, ERP solutions, etc.) has been a significant challenge in the past in adopting it for clients as well as vendors along the supply chain.
You don’t want situations where the efficacy of one system isn’t optimized—or usable—because it won’t talk to another.
A popular method is to use a convenient API to integrate with the (several) applications that you are probably using across your business operations.
The COVID-19 pandemic actually served to accelerate an already evolving user-behavior. They now assume quick and free delivery across product categories, whether it be a t-shirt, TV, or drum-set.
iv) Real-time communication with fleet drivers and end customers: Another significant improvement in modern last-mile solutions is the ability to communicate in real time with fleet drivers and end customers.
Customers are not only notified when their package is out for delivery but can be promptly informed about any last-mile changes via automatic pop-ups, SMS, email (etc.)
Customers can also track the progress of their parcel by calling their delivery agent (driver, dispatcher) or connecting via chat windows.
v) Tracking fleet drivers in real-time: This is another next-generation improvement in today’s last-mile software. Gone are the days when the drivers would be incommunicado once out to deliver, and central teams had to depend on them to use phone booths to call in and provide updates.
Now, centralized logistics teams can track fleet drivers, get real-time ETAs, and communicate any deviations or changes (e.g., an accident that has caused a traffic jam and therefore needs re-routing). Resetting routes, ETAs, and delivery windows can be done almost instantly.
v) Contactless deliveries: ePOD (electronic proof-of-delivery) and contactless delivery procedures were adopted even before the pandemic arrived. However, the arrival of the pandemic necessitated it, and it has now become the norm.
Today’s delivery software enables delivery agents to take pictures, collect e-signatures, scan barcodes, and record consumer feedback with their electronic hand-held devices (which could also be their cellphones with the software installed) while out to delivery.
vi) Robust analytics, and insightful reports: From a managerial perspective, last mile delivery software has become a really strong tool for leadership teams. Since all data is tracked in an (increasingly, if not completely) online ecosystem, all such data is available for mining.
The software has robust analytics that is embedded with AI and ML capabilities – therefore, the data can be sliced and diced in innumerable ways. Key metrics, operating ratios, deviations from projected timelines, customer feedback, service times, (etc.) are now calculated by the software in an instant. This leads to myriad insights such as the ratio of failed to successful deliveries, capacity utilization of resources, driver performance, and cluster analysis such as drivers, vehicle type, hours of the day, week, day (etc.)
Such insights help in an exhaustive performance review and management can act proactively to enhance what is bearing positive results while taking steps to correct the shortfall.
vii) Customer feedback: And, last – but not least, collecting customer feedback has become much more convenient! After all, the aim of every business is to create and maintain happy customers—that’s what provides you with repeat business.
Online feedback forms, customer ratings, and reviews all help you get a sense of what your customers are saying about you. This enables you to identify both the strengths and the areas for improvement.
3) Which industries use last-mile delivery software solutions?
While the list is an extensive one, we have listed some of the primary sectors below.
- Pharmacy: a leading sector that uses home delivery, and was especially impacted by the pandemic. While it has its advantages such as reduced product return and freed-up time for the pharmacy consultants, it also means the pharmacy has to operate on tight overheads, strong MIS, and an efficient delivery model
- Construction: Using last-mile delivery solutions to deliver construction materials onsite as and when needed helps reduce storage space and cash-flow needs
- Grocery: Along with pharmacies, among the most prevalent users of last-mile software that supplies daily essentials. Additionally, both these sectors also extensively use the new hyper-delivery model (15-min delivery) and last-mile delivery is, therefore, a cornerstone in their operations.
- Restaurants: Another new-age sector i.e…. the home-delivery model, that exists due to the quick–now, hyper-delivery model. The pandemic created a massive shift in customer behavior in this segment. Although the pandemic has receded, the consumer habit of dining in vs. onsite-dining seems to have stayed on
- Other sectors include: Cannabis, Alcohol, Floral
Conclusion: As is evident, modern logistics and supply-chain operations need advanced delivery software to enable efficient operations, informed decision-making, and ultimately, to create happy customers through an overall positive customer experience.