Logistics has for long been viewed as a cost centre than a profit centre. It is a function that is eternally in a state of stress and a lot of exigencies arise time and again making it a very entropic function where last-minute decisions could burn a hole in the pocket. In an environment of stifling competition where every player is hell-bent on choking every other but trying to woo the customer in devious ways which are way beyond acceptable lines of conducting business in a profitable manner. It is the time of experience at any cost and there is no one paying any heed to the fact that it is borderline irrational to build a business that values customer experience at the cost of profitability. It is quite counter-intuitive to think of this situation where the most important goals of a business are so contradictory to each other. But then, it does not have to be that way. There is considerable middle-ground to be discovered where a company can run logistics efficiently and profitably while still not compromising on its margins. What does it take to get to that sweet spot?
A refreshing alternative to conventional logistics software with a lot of focus on data-driven automation can help a long way in achieving the twin objectives of happier customers and yet remaining profitable. Here are 4 ways how good logistics software can help you improve profitability.
1. Agile and flexible process design framework
Timing is everything. In logistics, every single minute of delay or inefficiency in process could incrementally keep adding on to the loss column of your balance sheet. The mandates companies to fix problems and inefficiencies, the instant they are detected. If that isn’t possible, it is important to red flag it as a priority 1 situation and fix it at the earliest possible instant.
This can be possible only when the logistics software platform can allow quick implementation of changes through an agile process design/redesign mechanism. This helps a long way in addressing cost concerns arising out of process inefficiencies.
2. Cutting down empty miles
The biggest enemy for profitability in a delivery business is wastage in the form of empty miles and associated fuel costs etc. There are several scenarios that could lead to this problem. Lack of proper collaboration and miscommunication between the delivery agents and the customers could lead to lack of synchronization of schedules. This would eventually lead to missed deliveries and a wasted trip. A few such scenarios could significantly increase wasteful expenditure which can’t be passed on to anybody but absorbed by the company.
With real-time collaboration, this problem could be significantly cut down.
Another scenario where this could become a looming problem is inefficient routing of deliveries. When the routes are planned for delivery without any data-backed algorithm and by intuition, there is ample scope for manual error. This would lead to agents travelling back and forth leading to unproductivity and wasted miles.
By adopting enterprise logistics software which has efficient scheduling and routing capabilities, companies can significantly improve their measures to making logistics a profitable function.
3. Lack of awareness of a leaky funnel
You cannot control what you cannot measure.
You cannot measure what you cannot see.
Lack of visibility into real-time execution is a serious problem because that leads to a situation where key stakeholders are completely unaware of what the leaks in the system are which are causing significant drain on productivity and resources. This means that they need to be equipped with advanced visibility capabilities that can help them not only detect inefficiencies within the delivery ecosystem but also predict them well in advance to have all the necessary bells and whistles in place to avert them. This is yet another significant factor that would improve your overall profitability through efficient usage of resources at hand.
4. Delightful deliveries
When the logistics software offers customer-friendly options such as flexible scheduling and rescheduling of deliveries, allocation and scheduling options leading to meeting committed SLAs, tracking options for customers, it sets the right framework for an exceptionally good customer experience. This means that by investing in the right logistics software, you make sure you set the stage right for delivering delightful customer experiences which reduces churn and makes customers engage with you in a repeatable manner thereby improving profitability.
The bottom line:
Logistics is traditionally seen as a cost centre but with the help of technology, it has ample scope of becoming a profit centre in your organisation. A good logistics software is a key lever in making this transformation possible for your organization. To further understand how you can bring about this transformation at your organization, schedule a demo.
Delivery management softwares that are based on artificial intelligence and machine learning enable not just visibility but predictability in the processes as well.
When you are a 3PL, cost is a factor you need to be cognizant of in order to keep your total costs of operation. This is possible through streamlined and data-driven management of job allocation, efficient handling of field operations, saving empty miles, improved collaboration between customers sand field delivery agents.
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