How Last Mile Delivery Affects the Supply Chain
For last mile fulfillment, true convergence is still a work in progress, and more established players will continue to close the gap while smaller, niche players will continue to require supply chain execution integration.
The orchestration of processes and information for the procurement of goods to the “last mile” delivery to the customer is a required competency in today’s direct to consumer marketplace.
The convergence of supply chain execution systems is a goal that many enterprises have yet to achieve.
While some like Amazon and Walmart are well on their way, others have yet to begin the development of their strategic roadmap.
Synchronization of information across systems provides the visibility that can help enable world class customer service.
This becomes even more important in the realm of last mile fulfillment as more organizations are beginning to provide the local, rapid delivery that people are learning to expect.
If more than a Just Leave On Porch (JLOP) delivery experience is required, the essential elements for local delivery within a complete Supply Chain Execution (SCE) system should include:
Appointment Scheduling
Outside of common Order Management Systems (OMS) features, delivery appointment scheduling capability is essential for last mile fulfillment.
The ability to schedule the order delivery at the point of sale, while considering the cost of delivery and existing delivery routes, requires orchestration with the inbound lead times and outbound route planning. Event management and alerting are also becoming more common for proactive, outbound customer communications.
Delivery Hub Management
In many instances, the starting point for the last mile is a regional facility rather than a Distribution Center (DC) or Fulfillment Center (FC). DC’s and FC’s will already have a robust Warehouse Management System (WMS).
As many regional delivery hubs do not require the full breadth and depth of a WMS, some basic functionality is still needed: receiving, cross docking, inventory visibility, labor and task management, staging, driver check-in and check-out, quality audit, loading, and shipping.
Route Planning and Optimization
These capabilities lie at the core of effective last mile delivery. They help drive satisfaction levels up and total cost to service the customer down. Getting more deliveries on fewer vehicles that drive fewer miles is a formula that will yield only positive results.
For last mile delivery, routes can be extremely dynamic, changing day to day (sometimes intra-day) as compared with typical “service routes” that vary little from one week to the next. Best of breed capabilities are a prerequisite.
Driver Companion
Devices can vary from phones, to tablets, to “phablets”, to laptops. Basic GPS is a given, but when synchronized with the appointment management system and route optimization the driver is now fully informed and enabled.
Customer information, order details, and specific delivery instructions are also provided. Proof of delivery information, including customer signature can be captured for immediate revenue recognition. Changes in customer availability can be communicated in real-time to the delivery team to reschedule and re-route.
Returns and Reverse Logistics
Orders and items coming from the customer back into your supply chain is a common scenario that impacts customer service, route planning, inventory/finance, and driver awareness and cannot be overlooked when defining requirements for supply chain execution.
Throughout 2016, expect to see more SCE system providers offering greater capabilities within their applications and tighter integration with other point solutions.
For last mile fulfillment, true convergence is still a work in progress. More established players will continue to close the gap while smaller, niche players will continue to require integration.
A clear roadmap, with a focus on visibility across organizational silos, is needed to achieve SCE systems synchronization.
About the Author
David Meyers is Principal, Supply Chain Technology, Tompkins International. David has over twenty years of experience in optimizing distribution center operations, facility and systems design, technology implementation, and material handling integration.
Related: Last Mile E-Commerce Delivery Success Starts Early
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