Supply Chain Innovations in Last Mile delivery...
In today’s complex, global digital economy, businesses are continuously assessing how to deliver real value to their customers and their consumers. For most organisations this extra value is delivered through a new or enhanced service or a product, but more and more businesses start to understand that real value is created through an optimal supply chain model.
This is why we, at Unique Excellence, see a growing demand for innovative supply chain solutions to increase the customer/ consumer experience in the "Last Mile” of the supply chain process. In this article, we describe five supply chain innovation trends that we have introduced to increase control, visibility and supply chain effectiveness in this crucial part of their supply chain process.
What is Last Mile Delivery
Last mile delivery is defined as the movement of goods from a transportation hub to the final delivery destination. The final delivery destination is typically a personal residence, but more and more Business-2-Business customers expect visibility of their goods as well. The focus of last mile logistics is to deliver items to the end user/ customer as fast as possible.
Last mile logistics/ Last mile delivery has become a popular due to the continuous focus to deliver goods more effective, efficient and allow businesses to evaluate current transportation network capabilities and make real-time adjustments accordingly. Focus has been placed on last mile logistics because, in many cases, this is a key differentiator for businesses in the supply chain.
Supply Chain Analytics Through the introduction of data algorithms and analytics across the supply chain partners, the various hand-offs between organisations have been optimised. The main focus is to use this data to optimise aspects of operational interactions, such as pricing, matching couriers to delivery tasks, routing, rating of deliverers, and more, and help them to better address consumers’ expectations for speed, flexibility, and/or lower delivery costs. Emerging Supply Chain Models The introduction of new operational and supply chain business models has allowed organisations to better serve their customers and their consumers. Models that we see that leading organisations explore, are;
Seller-arranged delivery - Traditionally, after processing a customer order, a seller would outsource delivery to a provider that uses its own fleet. In certain cases, the order may be split into various deliveries with multiple delivery providers (e.g. DHL, UPS, etc.). Some sellers are outsourcing to delivery companies which use crowd-sourcing apps. Crowd-sourced delivery is an answer to the growing customer expectations for faster, more personalised, and cost-efficient service, and can help companies contain rising labour costs.
Intermediary-arranged delivery - Rather than selling their own goods, intermediaries offer a website or app for customers to order goods from various merchants. Once the customer places an order, the intermediary shops for items at local stores and delivers them at a scheduled time, enabling more same-day service. Some intermediaries focus on categories such as groceries or restaurant food (e.g., UberEATS). Others deliver a wide variety of products (e.g. Amazon, eBay, etc.).
Buyer-arranged pickup - To speed up delivery and eliminate shipping costs, consumers may prefer to pick up an online order at the store. Many retailers offer this option today, dependent on inventory availability.
Smart lockers or Click-and-Collect - We see growth in solutions such as locally situated public “smart lockers” into which deliveries can be made for later collection by consumers, and which may also help to streamline the process of returns, which continue to grow in volume as a result of changes in shopping habits.
Public-Private Partnerships - To meet customer demands for same-day instant delivery, there is a growing trend for companies to build or take advantage of urban warehouse space, incl. city hubs, micro hubs and shopping areas (within the city). This partnership approach will play an important role in decoupling slow, large scale mobility from personalised, small scale mobility.
Supply Chain Technology Various leading technologies have been introduced in recent years to increase the effectiveness of the last mile delivery. Some of the technologies are;
Drone delivery - One of the latest technologies that is introduced to increase the “speed of delivery”. As drones are able to circumvent existing infrastructure, they are are able to deliver the customer products faster at any location.
Driver-less - Delivering any time, anywhere through robotics and driver-less cars will reduce the reliance on shifts, labour rules, but allows a continuous delivery mechanism to deliver multiple products for a single customer. This technology allows multiple sellers to use a “single” driver-less car that supports a customer location - with complementary introduction of technologies like “address intelligence” - increasing the delivery effectiveness to that customer/ consumer. It will transition the last mile delivery from a company bulk delivery to customer-centric bulk delivery from multiple companies.
Smart planning solutions/ Last mile technologies - Through the rise of IoT, AI, social delivery networks and traffic data allows further Uberfication of last mile logistics. Additionally, multiple last mile technologies have been introduced to drive effectiveness, efficiency and transparency of the final delivery to the customer/ consumer. The next steps is the introduction of social delivery networks which have shown to lead innovation in urban freight. Sharing capabilities and capacities, and co-loading, require sharing data with many private and public partners in the supply chain. Alternative ‘token’ currencies are able to further enable close collaboration.
Sense and Respond - through the use of smart home technologies, incl. smart appliances, supply chains are able to pro-actively respond to consumer requirements. This can be used in the B2C and B2B environment. VMI is a B2B example in this space, however this automatic order management solutions, with usage sensors, allow accurate pre-order management, reducing any negative impact on the customer or consumer experience. Based on the type of product (perishable vs. non-perishable) the right volume can be ordered.
Blockchain - Consumers are looking for authentic products and services. This requires the right verification methods to ensure that the products and services that the customer, and ultimately the consumer, purchases can be independently verified. Blockchain chain allows this independent verification between the supply chain participants to “guarantee” this authenticity of the product/ service. It’s a technology which is growing extensively and many Logistics organisations are partnering with these technology providers to create this end-to-end supply chain visibility.
Social Supply Chain Responsibility
The corporate responsibility model has been further extended towards social responsibility. Many consumers are choosing their products based on the social responsibility of the supply chain model. This is especially visible in the last mile delivery. Logistics providers are introducing sustainability initiatives in the supply chain, including water and carbon reduction, greenhouse gas reduction programs and various other initiatives that create increased awareness with the consumer. Virtual Supply Chain Teams The concept of remote working and virtual teams has become pervasive across many commercial sectors, enabling companies to access talent globally rather than locally and to cut down on travel expenses needs. Many larger companies which once had planners located in each distribution centre have made the shift to centralised planning. This clearly demonstrates that in the age of information, local resources are no longer necessary to schedule and plan thousands of deliveries each day. The next step is to recognise that with online access to planning software and real-time communication, route planners really don’t need to be sitting in a central office, but could realistically perform all necessary activities from their homes. With the ability to send load and route plans directly through the relevant supply chain technology.
Trends in the Last Mile...
Many Innovations come and go. Some stick around longer than others and some fade into obscurity and others crystallise into breakthrough innovations which disrupt entire industries. Our Operational and Supply Chain Innovation team has seen many types of innovations and we believe that any of the five trends outlined in this post has the potential to substantially impact our client’s supply chain and logistics operations. If you’re interested in how we collaborate with you to deliver fit-for-purpose, innovative Operational and Supply Chain solutions to create a competitive advantage your organisation, please contact us today!
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