Four Ways that Technology Helps Better Last-Mile Delivery

By George Kochumman | Senior Manager, Transportation I recently had the pleasure of joining a group of retail-centric e-commerce speakers at the Supply Chain Practitioners Council...

By George Kochumman | Senior Manager, Transportation

Last-Mile Delivery

I recently had the pleasure of joining a group of retail-centric e-commerce speakers at the Supply Chain Practitioners Council in Bangalore to explore how e-tailers are meeting the challenges of delivering products to customers in real time.

With more Indian shoppers going online, Indian e-commerce companies are quickly learning to leverage technology to enhance and optimize last-mile delivery and returns management within the region.

Some of the groups key approaches—from addressing customer purchasing behaviour, actively directing pick-and-pack warehouse workers and optimizing delivery routes—included:

Use of advanced customer analytics to understand—and even direct—consumer behaviour.
  • A co-speaker described how one online grocer deals with customers with persistent complaints and costly returns/reimbursements: The customer profile is updated against the product profile, so that the next time this customer attempts to buy this particular product online, they are met with an “out of stock” warning. Of course, other customers shopping at the same time see the product as “in stock” and ready for purchase.
Use technology to enhance warehouse worker productivity.
  • E-commerce firms do not want pick-and-pack employees to “think” or waste time wandering the warehouse floor—activities that dramatically impact their productivity in this still highly manual portion of the supply chain. Instead, giving employees mobile handsets with embedded software to guide them to each picking task dramatically improves efficiency, especially for orders with multiple product SKUs in one shipment.
Offering customers select delivery times
  • Some e-commerce firms give customers four delivery time slot options. By incentivizing customers to select certain delivery time windows, they can then use routing software to create real-time route patterns for route and network optimization. These companies are finding that if they can reward customers to select less-preferred or off-peak delivery windows like mid-afternoon—by providing extra reward points or cash back, for example—they can take advantage of times when traffic is very light. The goal here is to increase Hit Density, how many deliveries can be made within a given timeframe. Even when customers insist on “peak-time delivery,” these firms are serving more customers within specified timeframes with optimizing and maximizing fleet capacity in the minimum possible time.
Leveraging TMS to optimize last-mile delivery results.
  • E-commerce firms are best served by incorporating a Transportation Management System (TMS) that works well for their unique challenges; choosing the right carrier mix (whether a private fleet, for-hire carriers, or a mix) and (for a private fleet) choosing the optimal fleet size/location; exploring different fleet optimization strategies, including fleet analysis and consolidation; and considering the role that postponement and peer-to-peer collaboration can play in network optimization.

E-commerce companies are leveraging advanced technology in all areas of their supply chains — be it in understanding the customer, picking and packing products efficiently within the warehouse, encouraging the customer to pick a certain delivery times or creating routes for the delivery vehicle. For additional considerations regarding e-commerce, last-mile deliveries and transportation technology solutions—from selecting the best TMS to transportation optimization— check out my presentation on Slideshare below.

George Kochumman is a Senior Manager in Chainalytics’ Transportation consulting team and works with clients globally to help them realize more value by realigning their existing transportation assets and realize cost savings through the optimal usage of their assets. 

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