Last mile delivery operations contributes about 2/3rd of the total logistics cost involved in moving a parcel. The way current industry processes are designed, it takes a lot of manual planning and paper based reporting for deliveries to happen. These delivery processes are a bit conventional and designed in consideration of market conditions and technological capabilities which were existing 10+ years ago. We, At Quifers, recognized the challenges faced in LMD operations by a majority of express delivery and 3PL companies and engineered a comprehensive solution to champion them. Some of the major challenges are:
In-efficient Delivery Planning
Challenge: As per current LMD (last mile delivery processes) total catchment area to be served by a DC is divided into a set of fixed routes. All these routes are typically allotted a fixed number of delivery resources based on historical demand maintaining some buffer. Now as daily load per route keeps on fluctuating, resources going out for delivery remains the same. This way of delivering results in sub-optimal delivery resource utilization which is as low as 60% in certain cases. Even if we keep load fluctuations aside for a moment, process of manual delivery planning via route bifurcation has inherent in-efficiencies with reduces the overall productivity of delivery resources.
Remedy: Quifers delivery management system comes with a powerful routing engine to automate delivery planning and save cost via creating an optimal delivery plan. Routing logic is such that it factors in a number of business constraints such as Traffic conditions, working hours of delivery resources, Delivery time slot, weight and volume of shipment, load carrying capacity of a delivery resource, lunch breaks etc. and generates DRSs (delivery run sheets) so as to reduce total cost of delivery. Delivery resource utilization is soared up to 95% and approx. 20-30% cost reduction in LMD operation can be expected through routing engine.
Challenge: Attendances and payouts of delivery resources are typically managed via log-sheets which creates a reconciliation bottleneck. Thousands of productive man-hours are wasted for just to cross-verify the entries made in log-sheets at the time of reconciliations. In many other cases, where logistics providers are manually updating the delivery statuses at EOD, even inventory reconciliation turns quite challenging.
Remedy: QDMS comes with a complete module to digitally manage delivery resources. Daily attendance, working hours and Kms covered by delivery resources can be easily recorded. Vendor payments can be reconciled on a click of a button. It saves a lot of man hours freeing resources to be assigned to other important tasks. For inventory reconciliation, QDMS digitalizes the entire LMD process and inventory is reconciled in real time with every status update.
Segregation and Sorting
Challenge: Segregation and sorting is a time taking process. Typically express delivery companies run two levels of sorting typically termed as primary sort and secondary sort. Primary sorting is to inward goods and segregate them as per pre-defined delivery routes; and secondary sorting is for selecting and allocating goods to a delivery resource. Sorting operations eats up around two hours of would be productive delivery time, hence driving down delivery resource productivity even further.
Remedy: QDMS comes really handy if you are specifically looking to employ leaner operational processes. It completely eliminates the need of two level of sorting because at the time of first scanning (goods inwards scanning) every item is directly allotted to the already created delivery run sheets. Meaning, goods are ready for dispatch instantly after the completion of goods inwarding process. Hours saved here are directly added to the delivery time of delivery resources which increases the productivity even further.
Challenge: It is very difficult to manage manpower. Delivery boys have a tendency to false report the reasons for not delivering a shipment. Many times, they would report that the customer was not present to receive the shipment without even visiting the customer’s place. This obvious, well known yet neglected fact increases the number of attempts to deliver a shipment. But, clients are not paying for attempts, they are only paying for a parcel.
Remedy: QDMS automatically geo-fences all your delivery addresses and a delivery boy will not be able to update the shipment status if he is not inside that geo-fenced territory. Auto geo-fencing of delivery territory has been proven to reduce the false reporting instances by 90%.
Challenge: Different companies have different approach towards handling the reverse pick-ups. Some of the companies like to engage totally different resources which are to be dedicatedly used to handle reverse pick-ups only. Obviously, it’s a simpler way to handle things but not really cost effective. Other set of companies tries to use their LMD resources to do the pick-ups on their way back when they are done with the deliveries. This definitely is cost effective to certain extent, but it messes up with the normal operations flow big time and requires a lot of manual planning and man-hours contribution.
Remedy: QDMS’s advance routing engine enables enterprises to seamlessly manage deliveries and pick-ups with the same delivery resources. QDMS runs a check on real time load volume carried by a delivery resource at all delivery points and smartly plans pick-up so as to reduce the redundant miles to be covered by a delivery personal. It not just saves fuel and work hours of delivery resource, but also frees up the management bandwidth which was earlier dedicated to planning pick-ups.
Neglected End Customer
Challenge: When delivery processes are designed based on business constraints, customer experience generally takes the back seat. Success of a company depends on how they treat their customers/users. In the e-commerce deliveries, where everyone is burning cash, Bluedart is able to charge premium mostly because they put customer satisfaction as their core priority. End customers can be better engaged by communicating them a precise time of delivery and giving them an excess to the live location tracking of their shipment. If it is possible to collect feedback about their delivery experience to be acted upon, then there is nothing like it.
Remedy: QDMS is all about customer experience and offers a range of functionalities for the same which can be tweaked and customized as per business requirements. When deliveries are managed via QDMS interface, customers are intimated about the precise time of delivery and real time location of their shipment. QDMS also sets up a seamless communication channel between a customer and the delivery person who is carrying his shipment.
While the points mentioned above may not represent an exhaustive set of challenges faced by a logistics company in LMD operations, but they surely are some important few. Technology has the potential to infuse a great deal of profitability in the LMD operations, all we need is a progressive mindset and a reliable partner.