The new millennium heralded several changes in market conditions on the demand as well as the supply side. With eCommerce firms offering super fast Last mile delivery options, consumer expectations evolved quickly, whereas at the same time increasing global competition meant the battle to win and retain consumers heated up.
Under such an evolving scenario, delivery options offered by firms have become a critical tool in achieving Customer Satisfaction and loyalty. Options such as Same Day delivery and last mile delivery are now must-have features for a firm.
Challenges of last mile logistics within efficient Same Day delivery service.
Although fuelled by eCommerce companies that began the trend by offering quicksilver delivery options such as Same-Day delivery and 24-hr delivery, these eCommerce companies are now realizing the costs of Same-Day delivery are chipping away at their profits.
Further, unless handled with proper planning and combined with efficient execution, Same-Day delivery can quickly turn into a logistical nightmare and result in consumer dissatisfaction, and cause company operating costs to spiral out of control.
Therefore, a company must be acutely aware of all the challenges of offering this facility to its customers. The top 4 challenges are mentioned below:
1) Using outdated technology: Needless to say, there is immense pressure at all times when it comes to fulfilling Same-Day deliveries. And, adding the complexities of managing last-mile delivery within Same-Day deliveries takes the logistical complexity to an entirely different level! Under such a scenario, using obsolete order processing systems, redundant dispatching software, or even using the old methods of manual order processing is grossly insufficient.
For example, matching orders with fleet-vehicle and driver availability are just some problems that will quickly become unmanageable without using modern, automated systems that use complex Artificial Intelligence and Machine Learning-led algorithms to optimize Same-Day deliveries.
2) High cost of operation: Same-Day delivery is costly, to begin with, and if last-mile logistics for it aren’t planned properly, the costs would very quickly get out of control. This weans away your profit margins and very easily turns your operation into a loss-making one with unviable shipping rates as compared to your more efficient competitors.
Therefore, order fulfillment must be balanced across the types of orders received – that is a proven method of balancing delivery costs. For example, a company could offset the (higher) daily cost of Same-Day delivery by offering it for only orders that meet a minimum order value. This ensures a certain topline value and also keeps your customers happy by offering them the Same-Day delivery option.
3) Fulfillment locations: With eCommerce penetrating the far corners of the globe, the supply chain continues to become an increasing challenge for Same-Day delivery. This demands the presence of warehouses and storage locations at convenient locations to support the logistical demands of Same-Day and last-mile delivery. Included within this network is the additional complexity of maintaining inventory levels so that the ever-lurking OOS (out-of-stock) problem doesn’t prevent the timely completion of orders.
4) Driver availability: It should hardly come as a surprise that driver availability is a key element in maintaining delivery effectiveness, not just for Same-Day deliveries but for overall efficacy as well. Unless a transportation company has well-trained and committed drivers that work as part of a team to meet their daily delivery objectives, it would be impossible to run an efficient logistical operation.
Logistic companies must pay special attention to their driver management policies and ensure that the drivers are satisfied with salaries, overtime rates, benefits, and training (etc.) that they are entitled to. Drivers work God-awful hours under difficult environments and unless they are satisfied with their payoffs, thus keeping their morale high, business productivity would be beyond reach.
5) Order visibility: Today’s customers expect (demand!) to be kept in the loop at all times with regard to their parcel movement. Additionally, when 3PL firms are deployed for order fulfillment, this adds another layer of complexity that affects order visibility and tracking. The speed (and, the pressure!) under which Same-Day delivery operates further exacerbates these variables.
Solutions for effective management of Same-Day Delivery.
1) Use Last-Mile Delivery software:
Quite clearly, the challenges that face a modern Logistics and Distribution firm in managing delivery operations in today’s rapidly changing world – characterized by demanding consumers, increasing global competition, constant pressure on margins – are many. Managing them via old manual methods and paper-and-pen solutions is, simply, not possible anymore.
Here is where using Last Mile Delivery software is the most feasible and effective solution. Such software optimizes daily delivery operations to come up with the most effective route. Important to remember, that the most effective route isn’t the shortest one, or the cheapest, or the quickest – but, the one that balances out all these factors while keeping in mind the end-objective of efficiency and cost-effectiveness.
Last-Mile Delivery software has several features and tools that enable Fleet Managers to digitize the entire ecosystem with its various stakeholders. This helps in balancing out all elements including Same-Day delivery logistics, driver and vehicle availability, customer’s delivery windows, minimum order value, real-time re-routing based on ongoing changes (including emergencies such as accidents, weather problems), etc.
Additionally, since such a system connects all users/ stakeholders (e.g. drivers, on-ground teams, warehouse dispatch) via a centralized cloud-server, GPS, app downloaded on phones, centralized command center, satellite networks (etc.) all such changes and updates are available in real-time for everyone to see.
Some additional factors that help in managing last-mile logistics within Same-Day delivery include:
- Centralized Order Processing System: Using a centralized Order Processing System to monitor the entire order-delivery process is non-negotiable. Customer orders originate from various sources – an Order Processing System provides a holistic view of details for all the orders in the system
- Widely distributed Fulfillment Centers: The greater the distance between fulfillment centers/warehouses and the final destination of a package, the more troublesome are the logistics for last-mile and Same-Day delivery. A widely distributed network of fulfillment centers of various sizes conveniently located across urban (high-density) and rural areas (greater distances between orders locations, fewer orders) that is close enough to customers helps in Same-Day delivery fulfillment
- Crowdsourcing Model: Cost-management being a constant concern for (especially) Same-Day delivery and its last-mile logistics, firms are increasingly using the Crowdsourcing Model to manage costs by using “non-professional” agents for order delivery. Drivers can also be hired using this crowd-sourced model without having to bear the cost of hiring permanent drivers but still maintaining a stringent delivery schedule to achieve Customer Satisfaction
Conclusion: Managing challenges posed by Same-Day delivery is not at all an easy task! However, unless a modern Logistics and Distribution firm equips itself to deliver on these parameters using modern tools such as same-day last mile delivery management software it will be left behind by evolving market demands and its competitors that are successfully changing with time.