Last / Final Mile Fulfilment in the Parcel Sector: Business & Operational Challenges, and the Software Solutions to Overcome them in 2017

Written by Integrated Skills

Oct 25, 2017

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Route Optimisation

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Last mile fulfilment is a tripping stone for many parcel delivery businesses. The final movement of goods from the fulfilment centre to your customer’s doorstep is the leg of the journey in which issues are most likely to cause a delay. Logistics companies and software developers are facing this challenge head-on with a range of new solutions. Below is a brief look at how businesses are tackling final mile fulfilment challenges in 2017:
1) Cutting Costs
Last mile fulfilment accounts for nearly 30% of the total delivery cost, according to a Beverage Industry study from September 20161. This cost usually ends up being passed on to customers indirectly, inflating industry prices, and squeezing the profit margins of many parcel delivery companies. The normalisation of next-day delivery for a lot of e-commerce purchases increases costs, and presents a fulfilment challenge during periods of high demand, such as Christmas.
One aspect of final delivery software that delivers immediate cost savings is Cloud based route planning. This can be manually initiated by (a) drivers who simply request an optimal sequence of deliveries relying on smartphone navigation to get them between the sequenced service locations or (b) route planners who, via an API, call the web service and receive within seconds the optimised routes. There is a third way; and that is to fully automate the process: This involves the ERP, invoicing, job management or CRM system to call the Cloud based route planning software sending it all the details of the next day’s deliveries (and/or collections) with no manual intervention via an API (with the route planning system returning the optimised sequence and/or route back to the host system).
To make savings, a logistics company can’t just look at the final mile however. Efficiencies and restructuring has to take place throughout the operation for a business to benefit from cost savings while still delivering a superfast service for their customers.
2) Providing Transparency for Consumers
Consumers in 2017 have a greater demand for transparency than they did a few years ago. Rather than simply having a tracking code and/or a four hour delivery window, customers now demand complete transparency in the final mile, with Uber style real-time tracking accessible from a smart phone. Providing this level of detail on demand is certainly technically possible, but it creates a software challenge for route planners in the logistics industry, and parcel delivery sector especially.
3) Providing Faster Fulfilment: From Order to Dispatch
Connected to the issue of delivery costs is the demand of customers for next or same day deliveries, even on last minute orders. The customers of the (near) future are likely to demand same day deliveries in greater numbers, at lower prices. Adoption of new technologies in the warehouse will help speed up deliveries, such as streamlined – possibly fully automated – warehouse systems and dispatch software.
4) Improving Customer Management
A big cause of friction in final mile fulfilment is dealing with consumer requests and enquiries. Customers submit a varied range of delivery requests that pose a challenge for computers to analyse and process, for instance ‘don’t ring the doorbell before 5 PM’, ‘leave my parcel behind the privet hedge at number 77’ etc. While open communication between retailers and customers is desirable, complicated delivery instructions make missed deliveries more likely, causing expense to retailers and frustration to consumers.
New tracking & visibility software gives more control to consumers to manage their delivery, while simultaneously making it easier for fulfilment companies to reduce the number of missed deliveries. This in turn eases the pressure on customer service teams, who currently spend a lot of their time tracing orders and rearranging missed deliveries.
At Integrated Skills UK we offer intelligent solutions to logistics businesses and parcel delivery companies to help you save money and boost efficiency on your final mile fulfilment. For more information about our route planning software, please take a look at the pages of our main website, or give us a call to discuss your needs with one of our team.

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