Maintaining proper controls in freight within the final mile has always been a top concern for supply chain executives. Failures within the final mile delivery logistics are both the most visible to consumers and poorly visible to supply chain leaders. Moreover, the logistics of delivery in the last mile result in 40% of the overall logistics costs for an organization, reports Material Handling & Logistics, and those costs are expected to climb.
“Spiraling last-mile delivery costs and changing customer demands are causing retailers to rethink their strategies and look toward new business models such as click-and-collect, locker boxes, on-demand, and autonomous solutions,” said Vijay Narayanan Natarajan, Visionary Innovation Senior Research Analyst at Frost & Sullivan. C-suite executives need to start rethinking their final mile logistics strategies now to stay afloat.
Calls for better final mile logistics are not new. Retailers have sought to find better ways of managing the final mile in parcels for ages, and in 2017, says DC Velocity, a survey found that the overwhelming majority of retailers, 66%+, feel their current freight management systems are insufficient at supporting and improving the customer experience. The question becomes, “what can shippers do instead to improve delivery logistics and improve customer service?” The answer is simple; supply chains need more speed. But again, that brings up additional problems, such as adding to the sustainability impact of faster shipping, the potential risk for more damage or loss resulting from more touches, and other issues. Logistics in the last mile, as well as every other mile, still suffer from limited visibility. The supply chain needs real-time visibility and actionable resources to boost customer experiences.
Final mile experiences will make or break all delivery logistics. Since the final mile is where the customer and carrier meet, it is an opportunity to build the best experience possible. Delivery is also subject to factors beyond your control, such as weather, traffic, and other issues. In turn, customers realize things can and do go wrong, but they still expect a faster, better experience regardless. Thus, 70% of shippers noted their need for “the ability to take dynamic and proactive action on in-transit issues (i.e., rerouting or expediting shipments, communicating efficiently with carriers).” In other words, they need more collaboration. Collaboration and visibility are two sides of the same coin in supply chain management. Without information, shippers do not know where to respond. Even with the benefits of supply chain visibility and accessible information, they must still work with other parties to intervene when necessary.
Accurate, relevant, and useful data form the foundation of successful deliveries. The final mile must always strive for top-tier performance, regardless of the fulfillment option. Customers expect the same fast, pleasant, and relatable experience from brick-and-mortar stores, pickup lockers, and porch deliveries. In today’s world, delivery can literally be anywhere, not just limited to a single residence or business. Business intelligence tools, such as active reporting, make the difference by providing the infusion of data into logistics of delivery and helping C-suite executives visualize the strengths and weaknesses, as well as ensure customer experience targets are met.
For example, take the Amazon Effect, the Walmart Effect on steroids, and delivery logistics standards. Customers know that Amazon can get orders delivered the next day, if not the same day. With convenience and speed much faster than your company, your only chance at success lies in building something more into that experience. Can you get it to customers faster? Maybe not. But, if you can show customers why and what you are doing to make their experience more enjoyable, you will win over Amazon. Building a set of supply chain metrics and KPIs to track the full size of final mile delivery logistics is crucial. If you are uncertain where to begin, just start by making a list of things you wish about outbound shipments and why you cannot find the answer to your queries with a simple, accessible resource.
That’s a loaded question. The short answer is everything that changes and could influence the last mile. However, that’s impractical. The state of all logistics is continually changing, especially as economies look to return to pre-COVID-19 operations. We are taking a stand and trying to give you that information in a digestible, actionable series. Above all else, now is the time to act and to improve your supply chain, building in more visibility, highlighting the values of collaboration to build better end-user experiences, and finally attaining a successful delivery and logistics strategy despite Amazon’s push for domination. For that reason, our next series will pivot into a deeper discussion on final mile logistics through 2020, including:
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