What is Delivery Management? How to Make it Efficient?

The rise of eCommerce has compelled many brick-and-mortar businesses across the world to make a rapid shift towards online selling. Result? A drastic surge in deliveries and the growing importance of efficient delivery management. With customers expecting to receive their products anytime and anywhere within the shortest time possible, it can be difficult for traditional delivery models to scale operations. On top of that, there is a need to drive omnichannel experiences. All these factors point towards the criticality of embracing advanced delivery management platforms.

Brick-and-mortar stores are leveraging digital technology with in-store experience to enhance the customer shopping experience. Customer convenience can be increased by using digital technologies like in-store tablets and kiosks, virtual reality, location-based-services (LBS). By going digital, retailers can offer services like an online purchase at the customer’s convenience, secured payment methods, and short delivery times. By shifting to smart delivery software, brick-and-mortar stores can make profitable delivery a reality.

What is delivery management?

Delivery management is the action of deploying efficient logistics processes, powered by digital tools, to ensure that goods are effectively and efficiently moved from one place to another until it reaches the end-customer. 

How to improve delivery management?

Efficient delivery management involves automation of tasks, reduction in human errors, improvement in customer service, and streamlining of warehouse and delivery operations. Automation the chain of delivery processes through software can improve order fulfilment efficiency, ensuring customer satisfaction and increased productivity.

By implementing Software-as-a-Service (SaaS), software delivery model companies can automate tasks that are manual and repetitive, thus saving on time and money. Such software can also help achieve paperless delivery transactions and reduce carbon footprint. 

Determining the shortest yet safest route for delivery, ensuring real-time visibility of fleet movement, and enhancing customer communication with timely updates delivery progress, can make delivery process highly effective. By integrating new technologies with existing logistics architecture, companies can mitigate risks, create more effective operations, and manage costs. 

Why is delivery management important?

Disruptive technologies and the growing popularity of eCommerce industry have drastically changed the way customers behave and this directly impacts demand patterns, consumer expectations, delivery turnaround-time and the way brands execute order fulfilment. The key to improve customer retention and boost profitability is to automate core delivery processes.

5 Key Delivery Management KPIs

The only way to assess the quality of the delivery service provided is to use key performance indicators (KPIs) to evaluate various areas of service. KPIs are essential for any business improvement strategy. 

Let’s understand some important KPIs:

1. Route efficiency

Route efficiency is the process of determining the most cost-efficient and productive route. It is not as simple as just finding the shortest path between two points. It needs to include all relevant factors like the number of stops possible in the delivery route, delivery windows, vehicle capacity, driver schedules, and even traffic patterns, to suggest the optimal route for delivery. Route efficiency helps in timely deliveries and improves revenue generation.

2. Fleet productivity

Fleet productivity is used to measure the performance of the fleet. It involves metrics like driver behaviour, vehicle maintenance, compliance, fuel usage, measure service hours, total usage, and idle hours of fleets. It helps to improve the efficiency of the fleet, maintenance, and control costs.

3. SLA and on-time in-full adherence

A service-level agreement (SLA) is a contract between a delivery service provider and a customer that specifies, in measurable terms, the objective and KPI a delivery service provider will achieve. Digital delivery administration tools ensure SLAs are efficiently followed and alerts are triggered in case of any unprecedented inefficiencies. On time-in- full (OTIF) adherence is a critical aspect of SLAs that businesses need to keep an eye on as it directly impacts customer survive quality. 

4. Identifying delayed deliveries

Accurately identifying delivery delays help delivery stakeholders to evaluate the reasons and narrow-down on areas that are extending delivery timelines. It offers insights into the effectiveness and efficiency of the planned delivery routes. Mechanical or hardware faults and errors during inventory pickup and packing are some of the most common reasons why on-time deliveries falter. This metric may be expanded to indicate the percentage of what types of items were delayed, the value, and how late the delivery was.

4. 3PL performance

When companies outsource delivery service to third-party logistics providers (3PLs), the efficiency gains come with a loss of direct involvement. Monitoring the performance of chosen 3PL based on metrics like on-time shipping percentage, shipping accuracy, order accuracy, order time-to-fill, and cost per unit shipped, can help to check their efficiency. 

5. Estimated Time of Arrivals (ETAs)

Route optimization tools can accurately generate estimated arrival times (ETAs) that can be used for internal and customer communication purposes. Dependable ETA takes multiple parameters into account to predict arrival time. ETA is calculated based on data histories, which are far more detailed in terms of vehicle characteristics, road network variables, traffic conditions, accidents, unforeseen events, and so on.

KPIs define the metrics to monitor various operational aspects of a delivery chain and enable companies to implement changes that would result in better overall results. 

Advantages of Efficient Delivery Management

The rise of an on-demand economy is constantly reshaping the way deliveries are being made and has compelled companies to adopt various strategies for improving their logistics operations. Effective and reliable delivery software can help to redesign operations and eliminate redundant processes. The last-mile delivery success is the hardest part of any business. It facilitates enhanced operational management, faster delivery, efficient routes and increased customer satisfaction. In other words, it improves last-mile execution.

The following are a few of the advantages of adopting practices that ensure effective delivery management:

Delivery profitability

It has optimized existing business models by increasingly using route optimization systems, fleet management, implementing the latest technological innovations, and increasing fleet capacity utilization rates. Good delivery service is not just timely delivery, but also about ensuring that the goods are not damaged during delivery. By auto-scheduling and automating repetitive tasks, delivery profitability can be achieved.

Better customer service

Delivery Software make it possible to keep customers constantly in the loop, by sending notifications throughout the process of delivery. Customers are also able to live-track their orders and stay updated with delivery progress and delays.

Delivery productivity

Delivery service needs to be prompt to avoid unnecessary delays. Auto-scheduling. multi-drop delivery route planning, intelligent order batching and real-time route optimization can help eliminate manual dependencies and thereby achieve greater delivery productivity. 

Faster delivery turnaround time

Software used for managing Deliveries can analyze order history to study key elements like order profiles, pick zones efficiency, and the way products travel around the warehouse, to identify areas of inefficiency and look for opportunities to shorten delivery turnaround time with more efficient processes.

Fuel Efficiency

Fuel efficiency can be achieved by optimizing route planning. Delivery management can map out efficient routes based on delivery urgency, customer proximity, driver availability, weather and traffic conditions. Intelligent route planning can also reduce empty miles, thus saving on fuel consumption.

Reduced CO2 footprint

Intelligent delivery management powered by digital logistics tools reduces fuel consumption by eliminating route diversions and vehicle idling. It also reduces miles travelled per delivery and reduced dependencies on paperwork by ensuring electronic documentation. All these factors help businesses to generate a smaller carbon footprint.  

Better compliance

It ensures that the due diligence and compliance required to deliver goods are up to date and readily available. Effective management of global trade compliance is critical in a global supply chain to accelerate the custom clearance and regulatory compliance to destined countries. By leveraging information technology for improved visibility and real-time information, better compliance can be attained at local-levels too.

In a nutshell, advanced delivery management solution and strategies empower brands to boost delivery profitability, enhance customer experience, streamline logistics operations, optimize transportations costs and drive competitive advantage.

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