Andrew Tavener discusses utilising routing technology to match evolving customer demands
The ecommerce industry continues to grow exponentially. Increased competition and demanding consumers have put retailers and their supply chain and logistics partners under a multitude of pressures. From ever-more personalised delivery offerings, tighter delivery time-slots and demands to ease return options, this effect on the supply chain, along with the added costs of congestion, emissions charges, failed deliveries and driver shortages, means there are significant business repercussions for retailers and transport operators alike. To succeed whilst still turning over a profit, organisations need to embrace innovative and intelligent technology, such as route optimisation and delivery scheduling systems, to collaborate and drive forward efficiency gains.
With organisations already streamlining operations by embracing paperless working, transport operators may be questioning just where they can squeeze the additional performance increasingly demanded by retailers in response to rising consumer demand and ever-higher expectations of exceptional customer service. The answer lies in a collaborative approach towards all supply chain components, to build stronger links and provide invaluable end-to-end visibility.
Historically it has been difficult to bring together this sort of optimisation across the whole of the supply chain, from the initial collection from the manufacturer or distribution warehouse, all the way through hubs and cross docks, to the last mile of the home delivery process. But the application of technology, particularly intelligent routing and scheduling solutions, now offers the ability to view the entire supply chain in real time, and with up-to-the-minute data, maximise sales, leverage efficiencies and address current – and increasing – challenges throughout the end-to-end process.
One of the main challenges is congestion, which is proving to be a growing issue for the logistics industry, and if retailers can’t keep deliveries or collections to schedule, they risk seriously harming their customer loyalty. But time wasted in traffic is not the only outcome of congestion, with rising concerns around air quality resulting in higher emissions charges for transport operators. At the same time, increased security around major cities, airports and out of town shopping centres is adding a further logistical demand, which in turn is causing problems and delays that leave vehicles idling, further raising emissions and the subsequent charges. For transport operators already struggling with increases in fuel costs and the difficulties in recruiting new drivers, these additional delays and costs risk eradicating already thin profit margins.
Add in the pricey penalties of missed delivery slots, and the potential benefits of creating end to end visibility from initial pick up through to the last mile are clear. Leveraging real time information and real time demand, advanced route optimisation across a wide variety of planning scenarios – from territories and master routes through to extremely dynamic routing environments – can transform performance. In addition to improving the way in which resources are deployed, better visibility can support more efficient and dynamic use of third party carriers and subcontractors.
However, organising an optimal journey is one thing; ensuring the delivery process goes smoothly is another, especially in areas of high security. Heightened concerns are prompting growing numbers of operators to consider new procedures around delivery and collection – such as the use of identification methods and pre-booked delivery appointments. But the benefits of such an approach are not limited to improving security; optimising deliveries via pre-booked appointments enables far better congestion management, leading to a reduction in wait time and emissions and improved customer service and a reduction in failed deliveries.
This is a system that, if applied throughout the supply chain, can provide a collaborative and community based solution that addresses the problems of all stakeholders: the hub owners have a process for improving both security and congestion; the tenants can plan based on a commitment on delivery times; and transport operators work to a clear schedule and can minimise delays, cut emissions and improve turnaround times – all through the utilisation of an intelligent routing and delivery scheduling system.
Working together via a single, secure solution all supply chain partners are involved in the process and have visibility into requested, scheduled and rescheduled appointments. With the right security authorisation, any individual can access the solution to check the current state of appointments, expected arrivals for each hour, expected time of arrival and so on to provide a complete and real time view of the entire supply chain process.
For the transport operator, this model can transform performance by minimising wait time. Rather than follow the herd and attempt to arrive first in a bid to offload and leave first – a policy that can only lead to one winner every day; working to pre-booked appointments reduces queues around the facility and enables that rapid turnaround required in today’s economy.
Furthermore, by combining this advanced solution with real time feedback from telematics systems, transport operators can ensure they have real time visibility over their fleet, allowing managers to not only see where a vehicle is, but also to compare this to where it should be. Potential delays are flagged and, if any individual appointment falls outside the agreed tolerance, it can be automatically rescheduled and optimised – and everyone related to that order, including the customer, kept up-to-date.
When joined with scheduling technology, it allows for new jobs to be added in real time or corrective action to be implemented to re-route vehicles to avoid any issues such as traffic, which can have a critical impact on performance and costs. In the process, other costly factors are reduced, such as fuel and the necessary vehicle maintenance and servicing required, as the time spent on the road and total mileage can be decreased drastically.
With retailers pushing back on transport operators regarding additional costs yet demanding rapid, just-in-time response, transport operators need to act now to adopt data-driven, intelligent methods. A collaborative routing and scheduling solution bypasses the typical disconnect that exists between disparate parts of the supply chain, and instead leverages measurable business benefits that enable transport operators to meet demands from both retailers and consumers, whilst optimising performance, streamlining efficiency, decreasing costs and providing an improved customer experience. v
Andrew Tavener is Head of Marketing at Descartes Systems UK. Customers use its modular, software-as-a-service solutions to route, schedule, track and measure delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world’s largest, collaborative multimodal logistics community.