Why Last Mile Logistics Should Be Your First Priority

Posted by Paul van Dongen on Jun 25, 2019 3:18:36 PM

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It’s a dog-eat-dog world out there. The big-player disruptors (you know who they are) have set lofty goalposts and acclimated consumers to a kind of good life they’ve happily claimed as the new norm. For businesses, last mile logistics marks the end of a transaction. However, much like the Olympic vault, the total sum of a company’s fulfillment efforts means little if they can’t stick the landing.

Customers want timely service (aka get it when they want it) and cost-effective delivery (aka free). Additionally, a significant part of the brand experience is reliability and communication. These last two sound like simple bars to set, and still so many businesses deliver to the wrong address or with delays and then provide poor communication regarding cause, status, and responsibility.

Considering how much of a cornerstone last mile logistics is to brand loyalty and profitability, why are so few getting it right – and what can be done about it.

The Perfect Order Paradox

The end-to-end process of parcel shipping, from procurement to delivery is complex. It involves an entire network of enterprises that make up the end-to-end supply chain, and they are often data-siloed and therefore lack visibility and a means to timely actionability.

last-mile-logistics-supply-chainAdd to this the growing pressure to customize. Brands are increasingly setting themselves apart by offering layers of convenience, like standard versus expedited shipping, special packaging, and options for pickup, such as Amazon and Walmart’s local lockers and towers, respectively.

Many shippers and 3PLs rely on USPS for these last mile deliveries, but with the agency’s viability and performance quality having recently come under fire, it’s best for businesses to remain flexible and not put all their eggs in one basket.

In essence, the conundrum is this: businesses must find ways to maintain ever-higher levels of satisfaction but also use sustainable models that don’t drain revenue. They must fulfill complex orders, with various criteria and restrictions, using whatever carrier options are available – each with their own criteria and restrictions – all while keeping logistics costs low.

Mission: It’s Possible.

While it seems like a paradox, automation and opportunities for dynamic modeling and optimization have made the perfect order more attainable. It may be the final leg of the journey, but last mile logistics has its own complexities. Let’s take a quick look at how to reach greater levels of efficiency at each step of the process:

Dynamic Carrier Selection

Most last-mile deliveries are either parcel or run through a smart post, like FedEx. However, if your customer requests a specific delivery window or lives in an area where certain delivery times are restricted, the conditions may not align with the resources at your disposal. Widening the scope of potential carriers in your network offers more flexibility in choosing just the right fit for any given order.

As you cast a wider partner net, you also increase the complexity of choosing an optimal provider. The FedEx rate guide alone is exhaustive, with multiple pages breaking down every facet and factor of the cost-per-criteria. One way to simplify the process is through a rules-based execution engine for dynamic selection. Based on all the characteristics of the order, such as the destination, customer specifications, and the weight and dimensions of the packages, such a tool calculates within seconds which carriers are available to provide the exact service at the best possible cost.

Transport Planning & Optimization

last-mile-logistics-deliveryThe same way optimal carriers can be selected based on all the given criteria, rules-based engines can also make optimal route determinations, plan capacity, consolidate shipments, provide automatic allocations, and book transport. All these elements save companies tremendous time and ensure that every order is fully optimized for cost-savings and customer satisfaction.

Automated solutions should also streamline the details of the process by providing shipping document and carrier label printing to correctly capture all the complexities of the order, as well as dispatch registration and pre-alert the carrier.

Centralized and Integrated Networks

Engineering networks and having a transport game plan are only half the battle; if you can’t properly collaborate and execute the shipment, you can’t stick the landing. As we mentioned earlier, siloed systems are the greatest barriers to effective networks. Partnering enterprises are often using different systems, interfaces, and versions of the truth. Many visibility solutions are either limited (not end-to-end but spanning a portion of the supply chain, like inventory), or else they require an additional layer of software. Similarly, most control towers offer visibility without any real means to act.

For maximal efficiency, opt for a centralized solution. Choose a supply chain orchestration platform that will connect and integrate all the various systems you and your partners use, so you all connect to one version of the truth. Such a centralized and comprehensive control tower offers end-to-end, real-time insight through web-monitoring, like timely status notifications and exceptions alerts, as well as in-app proactive events management to take immediate corrective actions.

 

Customers want convenience, consistency, and clarity. But businesses can’t expect to satisfy their demands without first incorporating these aspects into their own networked processes. Moreover, the rules of the game are constantly changing, from shipping costs and customizations to pick-up and distribution models – as are the technologies that support them.
Agility and flexibility are paramount to last mile logistics. By making dynamic selection and rules-based execution the cornerstone of your strategic approach, you not only perfect and optimize each order, but you also future-proof your supply chain to accommodate the industry’s natural and inevitable evolution.

 

il_top100Recognized as a top logistics IT Provider, MPO offers a powerful, rules-based execution engine for dynamic carrier selection and transport planning and optimization, as well as a centralized and integrated platform for superior collaboration between multi-party networks.

 

Want to apply these capabilities to more than just last mile deliveries? MPO's order-centric TMS is an end-to-end, global solution.

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Topics: Supply Chain Orchestration, Supply Chain Execution, Supply Chain Optimization, Supply Chain Management, MPO, Logistics

 

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