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There is a story that, back in the seventies, the Senior VP of Operations for Ryder truck lines had a nameplate on his desk with just one word: “Service.” When you peel back the daily activities of a carrier, service really is its main value add. Carriers provide a service of moving goods from point A to point B, delivering them on-time and in good condition.
Four decades ago, a simple reminder of that fact was probably enough to keep carriers focused on their core business (and keep customers happy). Today, shipping goods to consumers is not the same game it was forty or even four years ago. Some retailers have large logistics operations in-house, and some use a 3PL software to coordinate packing, shipping, and carrier selection. Logistics decisions have to be made on a continual basis to reflect both changing retail conditions and supply chain realities.
Those decisions cannot be made quickly and accurately without real time data. In this series of blog posts, Infoplus has explored several benefits of real time data including customer service and labor management. Adding to those, real time data also helps with the “last mile,” improving delivery rates and reducing the costs involved with returned shipments.
Delivering products to consumers’ homes and places of business is an activity riddled with exceptions. Consumers are not always present when an item is delivered. If items have to be signed for, or delivered to an adult, this can be a problem.
For example, a bottle of wine from a wine club must be signed for by an adult and cannot be left on a porch—both for legal reasons and because it would expose the wine to the elements. If the recipient is not home at the precise time the delivery person comes to the door, that wine goes back on the truck and is returned to the carrier’s station.
Now the delivery has gotten complicated. The delivery person should, in ideal circumstances, leave a note and give the recipient a chance to pick up the wine at the carrier’s hub. But notes are often forgotten or lost. Even if the recipient sees the note, he might not have the opportunity to arrange a pick-up. Many times, the carrier simply elects to send the package back to the original retailer or warehouse.
The customer is now dissatisfied as well. A product that was expected to arrive in a timely fashion is now going to be considerably delayed. That customer will probably be unwilling to pay shipping costs again, meaning that the retailer is on the hook for the expense of re-shipping the product. Over time, these re-shipping costs add up and erode the bottom line.
The real problem here is that the carrier has few options under the circumstances. The delivery person has a schedule to keep and might have certain restrictions on how, and to whom, a product can be delivered (as with the wine example). The only alternative is to send the product back.
Now imagine that all products are tracked in real time, from the warehouse floor to delivery. In this scenario, the shipper can choose the best carrier for delivering a product given its destination, weather conditions, and volume being shipped. Consumers are then informed about the estimated delivery date and time so they can make plans to be present.
Furthermore, the logistics software used by the shipper seamlessly integrates with that used by the carrier, so the shipper is notified immediately of any missed deliveries. This gives the shipper a chance to try to contact the customer and make alternative arrangements—for example, the delivery could be rerouted to the recipient’s office or to a friend’s house. By getting the alert in real time, these alternative arrangements can be made well in advance of the item’s costly journey back to the retailer.
These are just a few examples of how real time data is used to avoid hiccups in order and delivery processes. Those common, everyday snags in the system cost money...and possibly the customer’s loyalty and dollars as well. Preventing and correcting them does require a great degree of visibility of your logistics processes, from warehouse to delivery, as well as the ability to instantly route that information to the right people. Today's software technologies can now make this happen, maintaining high efficiency while keeping costs contained.
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