Organizations with last mile delivery operations are faced with an increasingly competitive marketplace. They are constantly challenged by customer demands, driver shortages and adverse economic conditions caused by everything from rising fuel prices to changing legislation. These and other circumstances dictate that companies diligently manage their pick-up and delivery (P&D) processes, considering all elements including customer care, driver, vehicle and route management, and service offerings.
To effectively control distribution costs and provide exceptional service to customers, each company should develop a list of best practices and integrate them into their business processes. These processes should be designed to streamline and better manage deliveries, establish and maintain a competitive advantage, and generate new and repeat business.
While best practices will differ between organizations and markets, several apply to any business with delivery operations. This article provides an overview of 10 best practices for establishing, managing and measuring effective last mile P&D programs. It also outlines a framework for lowering costs, eliminating operational complexity and improving customer service.
Best Practices to Streamline Delivery
1. Put a plan in place
Last mile delivery organizations should consider their operations the same way enterprises think about their factory or warehouse operations. Enterprises typically set tightly engineered plans for their production lines and warehouse operations and have specific tools that enable them to benchmark performance against those plans. These plans are typically based on well-researched, granular, labor and activity standards, and they allow manpower and capital assets to be managed for optimal utilization. Delivery organizations need to bring this thinking to the last mile.
2. Implement the technology that fits your business needs
There are many sophisticated logistics technology applications available to help organizations drive delivery efficiencies and boost service. But for companies looking to avoid financial and operating risks, such as high upfront costs to license, install, implement and train users; or for those that want advanced functionality without complex software integration and risks — a hosted, on-demand logistics solution may be the best choice.
A logistics application should offer advanced functionality in a completely integrated solution, providing consistency in reporting and execution, ease of use and visibility into the entire distribution process.
When evaluating technology to assist with logistics management, companies should consider speed, security levels, reliability, as well as a service commitment. Additionally, the payment model needs to be tailored to the needs of each unique business. For example, it could fluctuate with the amount it is used and have variable pricing based on volumes.
3. Analyze and assess information
Once a logistics management solution has been selected and implemented — and a base level of operating history is available — companies should begin to analyze data to assess where their delivery strategies are out of line with their needs or those of their customers, and where cost savings exist and are achievable. A technology solution with integrated business intelligence and reporting modules makes this analysis easy and should allow the information to be accessible by the right people, at the right time.
4. Establish standard operating procedures
A thorough data analysis enables the development of procedures against which performance can be measured. The best running delivery operations are those that establish engineered standards for every aspect of the delivery process. Historical data should be used to identify and create best practices around activities such as load times and service times on particular routes. Regardless of the standards being set, the key is to ensure they are realistic and measurable and that you have designed action plans to improve on the performance of the individuals or the process.