Retailers and fleet operators are increasingly recognising the need for efficient last mile delivery. There are multiple factors behind this, including driver shortages and rising fuel costs, as well as both corporate ESG objectives and growing consumer sustainability expectations. All of which means businesses need to get more out of their existing fleet operation; manual ways of operating are simply no longer sufficient. Technology, such as advanced route optimisation and scheduling software can increase delivery density and delivery capacity by as much as 35% without having to add new drivers or vehicles. Pól Sweeney, VP Descartes Fleet Solutions EMEA, explores some of the Last Mile and Fleet Efficiency challenges and solutions.
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Increasing complexity combined with rising expectations
International consumer research conducted by Descartes in early 2022 showed that 73% of consumers had a problem with a delivery in a three month period. Whether corporate customers or end consumers, the expectation now is for deliveries on time and in full – indeed, ensuring an order arrives as expected is now of higher priority for consumers than speed of delivery. Order tracking, visibility and proof of delivery should be the basic standard for the customer experience, but in many cases businesses are falling short. Fleet operators need to have real-time visibility of their vehicles, in order to manage routes on the fly to ensure customer commitments are met.
Yet, the issue of rising fuel costs and driver shortages has added further complexity in to the mix. Ensuring existing fleet capacity is optimised is now a business imperative for profitable and sustainable operations.
Furthermore, the need to integrate electronic vehicles into the fleet requires additional intelligence that can help companies make the transition to EVs and optimise deliveries for a mixed fleet. Whatever the mix of vehicles, routes need to be optimised to minimise emissions, manage green zones, and ensure drivers’ hours compliance. But it also requires integration with order management systems to ensure vehicle capacity is maximised and delivery options that can be met and costed are presented to the customer at the point of sale.
Finally, there is both an increasing business imperative – driven largely by the COVID-19 pandemic – as well as significant operational and cost efficiencies to be gained by adopting a paperless delivery process. Not only does it provide the visibility customers now expect, operational benefits include faster and more accurate payments and better stock control.
SIG UK is a leading UK supplier of specialist building solutions operating across the UK and Ireland and acts as a unique intermediary for contractors in the supply chain. Within the UK, it has a fleet of approximately 500 vehicles. Since implementing Descartes’ last mile solution in 2020, SIG has increased its On-Time-In-Full (OTIF) deliveries by 10-15% and the volume of deliveries by 25% using the existing fleet.
Edward Corbett, Head of Programme, SIG UK: “Descartes’ technology has allowed us to be agile, forward-thinking and work optimally with our fleet with benefits on costs, sales and satisfaction across the business and with our customers. Achieving this improvement in capacity and increase in volume of deliveries shows a real forward movement for us and the data we now have from this system gives us the ability to make informed management decisions to optimise the fleet and our business.”
Similar benefits have been recognised by care home provider, Blueleaf. Rob Meredith, Group Head of Operations, comments: “Descartes’ software has enabled us to not only offer our customers a COVID-safe, paperless option for proof of delivery, but has also improved the accuracy of our deliveries with a complete record. We have managed to replace our previous system – which involved vast amounts of paperwork with load manifests, picking documents and forms – minimising waste and improving our sustainability credentials as a business.”
Embracing a digital approach
Digitising the last mile is absolutely critical to, not just fleet productivity and efficiency, but to overall customer / consumer satisfaction with (home) delivery services. It simply isn’t possible, given the number of factors now in play, to achieve the necessary levels of efficiency and optimisation without digital solutions. But where should an organisation, who has yet to embrace digitised processes, begin?
Companies need to start with defining the problems or business issues they want to address and understand what success looks like. Success could be more delivery capacity to cope with demand; an improved customer experience; or reduced costs. Once the priorities for the business have been defined, companies should then look at the technology options and potential suppliers that can help them address the needs of the business.
The supplier will be in a good position to suggest the most effective way to meet their objectives. The most important thing is alignment on the business objectives and commitment from senior management in the plan to achieve it.
Suppliers such as Descartes have helped household names in Europe and North America and can bring this wealth of experience to advise clients on what would make most sense for their operation and objectives.