A Fully Transparent & Optimized Supply Chain Requires Better Technology

The shift towards customer service and flexible deliveries is impacting the entire retail supply chain, which needs to be redesigned to ensure companies become more efficient while providing an exceptional customer experience. The last mile in particular is becoming one of the toughest challenges for retailers to support, and they will need to embrace technology that helps them manage their operations while maintaining a healthy bottom line.

It is a difficult task to reach all customers wherever they are, whenever they want – especially in countries or cities with low population density. However, as delivery companies, in-house fleets, and crowdsourced resources become more aware of these challenges, we will see the emergence of new models that efficiently utilize multiple tools, technologies and resources. The entire industry is working towards achieving flawless orchestration of a fully-transparent, fully-optimized supply chain, which is driven as much by cost-efficiency as it is by providing end-customers with exceptional brand experiences.

Growth in internet retail has been the main driving force behind the explosion in parcel delivery volumes. In 2016, retail e-commerce sales worldwide amounted to US$1.86T, a number which is projected to grow to 4.48 trillion US dollars by 2021. However, it is important to put these numbers in perspective, as ecommerce sales currently account for just over ten percent of all retail sales worldwide, a percentage which is also poised to grow significantly over the next decade.

Technology is Key to Improving Supply Chain Efficiency

Technology will play an increasingly crucial role for retailers to improve their logistics capabilities and the efficiency of their entire supply chain. Many companies take into consideration the option of building their delivery logistics technology in-house, an important strategic decision that will impact many people across the ecosystem – from management to operations, through dispatch, warehouse and drivers, and all the way through to partners, customers and recipients. However, as the delivery logistics landscape expands, so do the technologies available to manage and optimize various aspects of the supply chain.

Planning is imperative when creating or deploying a new operational system. Developing a bespoke software platform isn’t an easy task and requires significant time and investment. While many companies will be initially lured by the idea of creating a ‘made-to-measure’ solution, it is important to set realistic expectations about the time it will take to build and complete it. And, not just a minimally viable product. In addition, future iterations, software updates and maintenance can be extremely time consuming with the build model, in many cases holding back company growth and speed to market. The bottom line is that while an in-house development team may be capable of developing a delivery logistics solution, it is likely not their core competency.

retail-ecommerce
retail-ecommerce

On the flip side, an out-of-the-box solution is immediately ready and can typically be customized to the client’s needs. When purchasing a purpose-made solution from a tech vendor that specializes in the field, you are buying technology that has been tried and tested by a team that understands the challenges from multiple points of view and client use cases. Purchases of this type go way beyond buying software – it’s also about tapping into the know-how of experts who are able to assess, advise and even preempt future issues or challenges with significant foresight.

The landscape may be tough, but new challenges bring with them numerous opportunities, and companies should leverage their last mile processes in order to differentiate themselves from the competition with the right technology to manage and orchestrate their entire operation. Establishing operational excellence throughout the supply chain is the only way to gain an edge over competition – especially as the last mile is fast becoming the battlefield to earn customers’ loyalty.

Lior Sion

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