What is delivery management? How to make it efficient

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By FarEye | October 13, 2022

The rise of e-commerce has compelled many brick-and-mortar businesses across the world to make a rapid shift towards online selling.

The 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. These factors all point towards 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.

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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 the automation of tasks, reduction in human errors, improvement in customer service and streamlining of warehouse and delivery operations. Automation of the chain of delivery processes through software can improve order fulfillment 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 time and cost. This software can help companies achieve paperless delivery transactions and help reduce their 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 the 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 e-commerce have drastically changed the way customers behave and this directly impacts demand patterns, consumer expectations, delivery turnaround-time and the way brands execute order fulfillment. Automated core delivery processes are the key to improving customer retention and boosting profitability.

5 Key Delivery Management KPIs

Key performance indicators (KPIs) help assess the quality of delivery services. KPIs are essential for any business improvement strategy.

Here are 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 behavior, 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 survival 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, and unforeseen events.

KPIs define the metrics to monitor various operational aspects of a delivery chain and enable companies to implement changes resulting 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. Effective and reliable delivery software can help to redesign operations and eliminate redundant processes. Last-mile delivery success is the hardest part of any business. Last-mile delivery software facilitates enhanced operational management, faster delivery, more efficient routes and increased customer satisfaction. Last-mile delivery software improves last-mile execution.

Using delivery technology to ensure effective delivery management includes these advantages:

1. Delivery profitability

Delivery software optimizes existing business models by 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 goods are not damaged during delivery. Delivery profitability can be achieved by auto-scheduling and automating repetitive tasks.

2. Better customer service

Delivery software makes 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.

3. 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.

4. 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. Software can also identify areas of inefficiency and look for opportunities to shorten delivery turnaround time with more efficient processes.

5. Fuel efficiency

Optimized route planning creates fuel efficiency. 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.

6. 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 traveled per delivery and reduces dependencies on paperwork by ensuring electronic documentation. All these factors help businesses to generate a smaller carbon footprint.

7. Better compliance

Delivery software 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.

Advanced delivery management solutions and strategies empower brands to boost delivery profitability, enhance customer experience, streamline logistics operations, optimize transportations costs and drive competitive advantage.

How do you identify and manage deliveries?

In logistics, there are a few different types of deliveries that can be made. 

Point-to-point delivery: The most common type of delivery is the point-to-point delivery. This type of delivery is when goods are delivered from one location to another without stopping in between. 

Hub-and-spoke delivery: Another type of delivery is the hub-and-spoke delivery. Goods are delivered to a central location (the hub), and then redistributed to other locations (the spokes). 

Cross-dock delivery: The last type of delivery is the cross-dock delivery. This type of delivery is when goods are unloaded at one location and then loaded onto another transportation method, without being stored in between. 

To manage these deliveries, there are a few different things that logistics professionals need to do. 

  • First, they need to identify what type of delivery is being made. 
  • Second, they need to plan the route and schedule for the delivery. 
  • Third, they need to track the progress of the delivery and make sure that it arrives on time. 

By following these steps, logistics professionals can ensure that all deliveries are made safely and on time.

FAQs

Why is delivery management important?

Delivery management is important because it has had a direct impact on customer experience and profitability.

What are the benefits of delivery management?

Delivery management helps in making on-time deliveries. It facilitates efficient route planning and fleet management. It allows enterprises end-to-end visibility and better management of orders along with the ability to automate repetitive processes. Delivery management helps in streamlining supply chain operations.

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