“As consumers increasingly turn to e-commerce for their shopping needs, faster delivery isn’t just an added plus; it’s the expectation of the online shopping experience. If retailers and their logistics partners want a shot at market share, faster delivery needs to be a priority. So how can retailers expedite delivery and delight customers? The answer is last-mile delivery.” Supply Chain Brain
The retail industry is changing at a fast pace. The new omnichannel reality epitomises consumers’ need for instant gratification. Now most medium to large retailers are selling their offerings online in addition to or instead of brick-and-mortar stores.
Fast delivery isn’t a differentiator anymore; it’s an expectation.
Retailers are being forced to streamline their last-mile to compete with the biggest players. Giants like Walmart are crossing the final frontier and offering in-home delivery. That’s right, they’re delivering customers’ groceries right into their fridges!
So how can retailers expedite delivery whilst maintaining accuracy and profitability? The answer lies in good last-mile delivery management.
What is Last-Mile?
“The ‘last mile’ is effectively the final leg of the journey, which sees a package arrive at the shopper’s door, the only step of the process a consumer is really interested in.” – Small Business Trends
Last mile is a Supply Chain and Transportation management term used to describe the movement of goods from a distribution centre to a final destination.
The growth of online shopping is a symptom of how the digital revolution has changed the very fabric of retail. Online retail sales in the US crossed $517 billion in 2018, a 15% jump compared with 2017 (US Commerce Department). In New Zealand, online sales were up by 14% in June this year, compared to 2018 (BNZ). In 2019, global e-commerce sales are expected to grow 21.5 percent, according to Statista.
Today, customers want to order your merchandise however they want, whenever they want, and have it delivered wherever they want: in-store, to their homes, business and more. They are looking for speed, timeliness, accuracy and precision. Meeting these expectations can make or break a retail business, especially during peak seasons. Same day delivery is the ultimate holy grail!
Shrinking the time between order and delivery is highly impacting already over-stretched supply chains.
This article discusses some of the challenges posed by this apparent paradox, as well as some of the strategies retailers are employing to overcome it.
Fulfilling orders from different sales channels is one of the most critical challenges omnichannel retailers faces. Knowing how much inventory you have, and its location is key to fulfilling orders quickly and accurately.
Another challenge to last-mile management is poor transportation infrastructure. This results in inefficient routes, longer journeys and delays ultimately causing customer dissatisfaction.
Finally, incorrect addresses, remote locations, absence of a receiver for the package and whimsical cancellations of orders to name a few, can cause
5 top strategies for achieving last-mile excellence
Establishing last-mile warehouses
Building a network of facility distribution centres as close as possible to major suppliers, producers, and clients can be immensely advantageous. It can significantly reduce shipping time and costs, whist enhancing client satisfaction.
Partnering with a Third-Party Logistics (3PL) specialist
Third party logistics (3PL) providers are organizations that offer end to end warehousing, fulfilment and distribution services to businesses in a variety of industries including retail, wholesale and manufacturing. Benefits of partnering with a 3PL include:
instant local and global expansion
reducing fulfilment efforts and costs
eliminating preoccupation with transport regulations
Retailers are thinking outside of the warehouse box and are looking to their brick-and mortar stores to function in ways formerly limited to distribution centres. In-store fulfilment is the ability to fulfil an order — no matter its origin — from a brick-and-mortar store. Offering this option can create a powerful competitive advantage, but only if all processes are managed well.
According to Forrester, 71% of shoppers agree that it is important or very important to be able to view inventory information for in-store products. Moreover, real-time tracking gives customers a sense control over their order, significantly reducing returns and complains.
Employing a software solution
Regardless of which approach or strategy you choose for your business, you’ll need the right technology to support your operations. Either performing self-fulfilment through last-mile warehouses, in-store fulfilment or using a 3PL (or dropshipping), you must have full inventory visibility and control to make sound business decisions.
The three main software solution that can propel your last-mile delivery strategy are WMS, TMS and YMW:
Warehouse Management System (WMS) is a software solution designed to support and optimise the daily operations of a warehouse. Optimizing operations through the implementation of a robust Warehouse Management System can significantly reduce picking time, product touches, minimize travel paths, optimize picking and execution, ultimately shrinking cycle times and allowing for faster order turnaround and shipping. It also prevents common human-error related inaccuracies.
A Warehouse Management Solution can help with decreasing transportation planning time and achieving cost savings through order consolidation, load optimization, bestway routing, tracking and proof of delivery.
Package weight is another cost that can significantly affect shipping prices. A WMS solution with volumetric calculation capabilities can calculate each order to determine the smallest box it can be placed in, thus reducing packaging and ultimately transportation costs.
A Transportation Management System (TMS) is a solution that helps companies that move freight to optimise their operations. The software contributes to critical business drivers such as productivity, scale, customer experience and cost savings.
Route Optimisation solutions are now capable of creating intelligent transportation plans that balance profitability and customer requirements. In order to maximize return, the software considers every aspect of routing: what consolidation options are available, which route takes the fewest miles, are there pooling opportunities, is it more cost effective to ship the freight on your fleet or broker the load to a 3rd party and finally which 3rd party offers the most economic option.
Many companies have grown to realise that transportation delays often take place within the DC’s yard, not in transit. Yard Management System is a software system designed to manage the movement of trucks and trailers in the yard of a manufacturing facility, warehouse, or distribution centre. A YMS connects the WMS to the TMS. It complements and augments the planning functions within these systems by providing execution visibility.
Ecommerce is the new reality in which retailers need to operate to remain competitive. Consumers have grown to expect super-fast shipping options. Without a last-mile delivery strategy in place, e-commerce businesses can’t deliver on their promise — and making your customers wait can be costly.
With the HighJump platform, iWMS Australasia can offer your business tailored, configurable and scalable WMS, TMS and YMS solutions that will meet your exact business needs today and for years to come.
The core software architecture can be easily adapted in a fraction of the time of conventional systems, and at a fraction of the cost! And because all changes are external to the core software, upgrades and support are not compromised. This guarantees low total cost of system ownership.
Contact us today to discuss your business requirements.
Click here for the full HighJump WMS brochure.