- Consumer Delivery Demands Go Beyond Speed
- Steps to Choosing Technology-Based Dispatch
- Taking a Modular Approach to Solutions
Consumer expectations for product and service delivery have evolved from simply speed to a wider variety of features, such as location options and visibility into a delivery van’s whereabouts in real time. Companies can use Internet of Things (IoT)-based data, ranging from sensors and location trackers to delivery driver cell phone-based apps and GPS, to help companies meet the evolving demands. While challenges are growing for those delivering goods and services, the number of tools at their disposal are increasing, too.
RFID tags provide visibility into item-level inventory for stores and brands, and IoT technology can further illuminate sensor-based data, such as temperatures and conditions in storage, during transport and on sales floors. But increasingly, companies are challenged with tracking goods during the last mile of delivery to a customer, and with ensuring those products arrive on time at the location of a busy customer’s request. That often requires a combination of software and very basic GPS-based data to manage where delivery vans are located, how they manage their deliveries and what to do when exceptions occur.
Consumer Delivery Demands Go Beyond Speed
Companies focusing not just on speed but also on delivery accuracy and competitive services are providing ecommerce or e-grocery products, medical equipment deliveries, and services as installers or cleaners. Whether this service or product is then received at home or at a curbside, office or locker varies widely, while retailers are also offering “buy online, pickup in store” (BOPIS) options.
Locus offers a dispatch-management platform as a software-as-a-service (SaaS) solution to help enterprises with their decision making during their last mile. One of the primary technologies being used for delivery management is GPS, according to Mehul Kapadia, Locus’s chief growth officer. GPS is available via a delivery driver’s cell phone, or directly through vehicle systems, making it low-cost and ubiquitous.
Mehul Kapadia
Every driver can provide GPS as a primary source of data, Kapadia says, adding that real-time data, management and analytics depend heavily on that GPS location. IoT software can be integrated into an existing management system, and in some cases also leverage sensor data. For example, cold chain logistics operation may require temperature data, which can be captured in real time from sensors inside a vehicle. Other IoT solutions are being used for security features as well, such as detecting when a vehicle door is opened, or if a parcel is cut or experiences heavy impact. However, GPS tends to be the base technology that is used for location tracking when it comes to last-mile delivery.
Companies want to directly ensure a great customer experience, Kapadia says, and they want control over how things are delivered. “Pressure and expectations from customers are higher than in the past,” he explains. Consumer goods brands, for instance, could previously manage operations with data about inventory and sales once a week, but now they may require updates twice daily in some markets. Other service-based companies, such as pool-cleaning or carpet installers, are managing the provision of services throughout each day, and the pressure is to offer service when expected—and as efficiently as possible.
Changes in supply chain and lifestyle, Kapadia reports, have been driving a need for greater efficiency and flexibility in the last mile. “I think, fundamentally, consumer expectation now has significantly changed over the last two or three years,” he states. Workers for a delivery company may be operating out of their homes or driving trucks directly from a house rather than an office. Those receiving the goods may be at home or elsewhere, and they may be more likely to change a delivery address. As such, time management is not as straightforward as it used to be, and brands that cannot meet customer expectations are paying a price in terms of loyalty and repeat purchasing.
Steps to Choosing Technology-Based Dispatch
Choosing Priorities
Companies should first identify what customer experience they want to deliver. Some businesses simply want to ensure low-priced, fast delivery and easy returns, while others may have a greater customer experience focus or are a more premium brand. In this second scenario, they may need to provide gifting options or provide customers with a package’s real-time status. Companies may need to offer delivery updates, even to multiple people in the case of gifts, and they must consider how their call center should react to customer requests or complaints. These questions all focus on the additional level of service: “What is the customer experience you want to deliver?” Kapadia says “This is something that we work with all our brands very closely.”
Sharing the Responsibility and Data
The next step is to consider what part of the company’s operations are insourced versus outsourced. Does the business bring in third-party delivery providers, employ its own fleet of vehicles or use a combination of both? Technology can help companies identify the right combination of delivery services according to their customers’ demands, and specific to certain regions. They can then determine how data is collected and shared with all constituents, thereby ensuring transparency for those customers.
Balancing Staffing with Demand
Delivery providers need to examine their shipping demand (the rate of orders) versus driver or service staff. “It’s great news if you’re getting more demand,” Kapadia says, “and more has to be shipped, but you need to think of the pressures across an entire supply chain, especially on the last mile.” The right management system will ensure warehouse workers, drivers and personnel at customer service offices picking up calls all have the necessary data to perform their jobs. That means getting by without necessarily overstaffing.
“If you think of the attrition that happens [with the low unemployment rate], especially among drivers,” Kapadia says, that challenge can be managed with improved visibility via data. For instance, he explains, drivers can switch from delivering products for one company to providing another delivery service for another company, even during a single day. Thus, understanding workflows and helping workers get their job done can improve workflows, delivery times and employee satisfaction.
Identifying the Costly Exceptions
The fourth step for implementing an IoT solution for last-mile visibility is to understand cost requirements, especially with regard to exceptions. Locus refers to exception events as constraints, and each constraint can be unexpected and impact delivery quality. Companies should thus consider what happens when a constraint impacts delivery—for instance, if a delivery driver calls in sick, a van breaks down or a customer address is erroneous. Locus has developed 135 different constraints, ranging from driver illness to the wrong destination address, Kapadia says, in order to ensure the next step is in place to continue delivery services.
Determining the Analytics
Companies launching a last-mile delivery solution need to consider what kind of visibility and analytics are needed. A product brand, for example, may want to use delivery data for everything from dispatch adjustments to product management. IoT data can help companies batter plan delivery expectations according to zip codes, for instance, and manage operations and marketing based on analytics. One example is the use of location data to understand where promotions might be most successful. “I think analytics becomes a very powerful enabler,” Kapadia states.
Taking a Modular Approach to Solutions
Companies can gain from avoiding common pitfalls. Some may have underestimated service demands, simply by not recognizing the expectations their customers have when it comes to time, method and location of delivery. Another challenge that can create problems is a lack of response to real-world constraints. Businesses are often unsure what features they need, both now and in the future, as well as how to go about implementation.
With any technology-based solution, Kapadia recommends taking a modular approach. This is the kind of solution Locus has built, he notes, with five modules on a single platform. “That allows you to integrate into your processes and your current systems in the way that works best for you,” he says. “It’s critical to have your own way to do things, but you still require the scale of a platform.”
For instance, one module can provide a customer portal through which consumers can choose from available delivery or appointment slots and select the locations where they want a product or service. If a company has a focus on sustainability-conscious products, it could offer options such as allowing customers to select a delivery a few days later than usual, when a driver will already be in the area, in order to reduce the carbon footprint.
With a modular approach, a system like the one Locus offers can include an order-management module that becomes a connection point between the retailer, the brand or the 3PL, for the purpose of holistic dispatch planning. A routing system can optimize deliveries based on GPS data, either in real time or historically, to ensure the maximum number of deliveries can be made quickly, with a limited amount of fuel consumption. Ideally, Kapadia says, companies want to track everything. “But you can’t see everything,” he states, “so what we help them do is pull out the insights that are relevant to each user’s role, from the dispatcher to the warehouse manager.”
An app for drivers provides the link between real-world deliveries and dispatch, while enabling the capture of GPS data. Locus’s On the Road app allows drivers to do things like take a photograph, scan a QR code or conduct other actions to confirm delivery. “There is still much more technology coming,” Kapadia says, to help businesses provide better customer experience. He forecasts a busy shopping season ahead but expects it to be unlike any others, with inflationary pressures, global fluid fuel prices and continued supply chain pressures.
Key Takeaways:
- There are a host of considerations that companies need to consider when using technology to dispatch, track, manage and analyze delivery services.
- Understanding what a company wants to provide its customers in service, from delivery times and location options to sustainability, is often the first step to calculating a last-mile delivery plan.