What steps should you take when demand exceeds your capacity? And how to improve last mile delivery to meet high volumes and rapid fulfillment?
As more consumers head online, higher delivery volumes and faster order fulfilment have become the standard in last-mile delivery. But this is also creating new challenges for everyone involved in the supply chain.
Companies are finding it difficult to keep up with rising demand and evolving consumer expectations of the emerging landscape. For many, the existing operational capacity can’t bear the brunt of the surge in eCommerce, or it’s simply stretched too thin to handle it.
If companies with limited capacity are to tackle these challenges, they will have to change the way they operate their delivery services.
A big part of that will involve answering the question: Are you still manually planning deliveries?
From optimizing the way orders are received, prepared, and tracked, to how they are delivered. Not to mention how the process is automated and adjusted to scale.
So, even when demand seems to flood your capacity, there are more than a few steps you can take to keep your head above the water.
The simplest way to handle deliveries is to complete them one at a time. But when the amount of orders is overflowing your capacity, it isn’t the best use of the available resources.
Order batching is a far better alternative, instead. It allows you to group multiple orders into one delivery run, which is particularly useful during peak delivery periods.
Typically, organizations group two or more orders based on their shared drop-off location or estimated times of arrival (ETA).
This method of delivery is also more cost-effective. As there is no need for drivers to go back and forth to pick-up locations after each drop-off, the number of delivery runs is reduced. And that means more drivers are available to handle more orders at much better fuel per mileage cost.
Having fewer deliveries benefits both single vs multi-depot planning, as well. It speeds up the pick-up process by allowing resources at depot sites to be focused on just a few loading procedures at a time.
Knowing what is order batching and how adopting it can help you increase the efficiency of your delivery service will make it possible to handle more orders and maximize the capacity of your service.
When demand outstrips your ability to meet it, scheduling orders on a first-come-first-serve basis isn’t an option. Instead, you can selectively choose which customers to serve first, and relieve some of the stress brought on by high delivery volumes.
Ranking customers as top tier based on the value of their purchase or their loyalty as a consumer helps prioritize deliveries to them and ensures you meet their expectations.
Capacity constraints and these methods of dealing with them are bound to affect the relationships you nurture with your customers. And while you might think that prioritizing would negatively impact the service experience of lower-tier customers, it doesn’t.
A study on the topic found that prioritization didn’t affect organizations’ relationships with bottom-tier customers. It only increased the satisfaction of top-tier customers and improved their perception of the company.
But determining which orders are more important is difficult when large volumes of orders arrive at your headquarters.
Delivery Management Software can enable you to automatically assign priority to each customer. The system will flag top-tier orders and schedule them for delivery first, which will minimize the workload of your fleet. Or rather, increase capacity so you can fulfil more orders.
Knowing how to deal with demand when it exceeds the capacity of your delivery service, also means understanding when is the best time to use your internal fleet vs external delivery fleet.
Outsourcing delivery overflow to a third-party provider is an affordable way to quickly boost capacities and the competency of your service.
But unless you operate a mixed fleet, it is difficult to dynamically re-route deliveries on a day-to-day basis.
Instead, organizations usually use last-mile carriers to increase their capacity when they know a spike in demand will happen, such as during special sales offers, peak seasons, or holidays.
That’s why it’s useful to predict movement in demand levels. And for that, you will need to do some forecasting.
Forecasting demand is a powerful way of maintaining an optimal capacity of your delivery service based on information.
Estimating probable demand based on past and current cycles gives you an oversight of movement during certain periods and helps you plan for them in advance.
For example, if a retail company observes spikes during the final quarter of the year, it can easily accredit them to Black Friday or Christmas sales, and actively take measures to ensure those orders are met in those periods.
However, successful forecasting requires exact data. Advanced analytics tools are by all accounts the best way to track, record, and observe information associated with your delivery service.
But for those tools to monitor key metrics in delivery logistics, they will have to be connected to delivery management software.
Automation is the key to successfully increasing your capacity. From what is route optimization to digital proof of delivery, it can raise the performance and output of your entire service.
But when you want to deliver goods beyond your abilities, having a Delivery Management software system that accurately measures estimated times of arrival (ETAs) is paramount. And automating your delivery can get you there.
What digital delivery systems can provide you is greater visibility over your available resources and capacities. This allows you to use the previous steps to schedule deliveries to the full extent of your service in real-time, and in the case of a capacity overload, to automatically spill orders to later drop-off runs.
At the other end of the spectrum, customers should also have the option to see more accurately when their deliveries will arrive. Not to mention select a different time slot in case their initial choice was unavailable.
So, automating the entire delivery process with delivery logistics software is equally important for customer experience, as it is for the efficiency of the operation itself.
Balancing supply when demand exceeds your capacity to fulfil isn’t easy. But it is achievable if you use these steps to scale your operations with it.
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