Today’s shippers face difficult economic and market headwinds. E-commerce growth and market share have stalled slightly but are still expected to grow. Meanwhile, inflation and recession fears are creating uncertainty on the horizon. In addition, many shippers have moved from centralized, hub-and-spoke to more decentralized, omnichannel fulfillment models, creating a complex and challenging shipping environment. Add to that fluctuating carrier capacity, restricted volumes during peak holiday times, increasing shipping rates and surcharges, and it is a near perfect storm.
All of this makes it difficult for shippers to meet consumer expectations, make and keep delivery promises, and increase order through-put while preserving margins. A final-mile maturity model can help. It can provide insight to where you are as an organization and a pathway for responsible growth and expansion, faster speed to benefit, increased ROI, and continuous improvement.
An organization’s final-mile delivery practice will advance over time on the road to delivery excellence. From isolated to integrated to automated. From single carrier, mode, and fulfillment location to multi-carrier, multi-modal, and multi-location. From decisions made by tribal knowledge to system knowledge to predictive intelligence.
E-commerce, logistics, and warehouse maturity models do not always apply to final-mile delivery. What’s needed is a final-mile maturity model that provides shippers with a roadmap to grow their parcel practice alongside their business.
Below are five stages shippers can use to evolve, improve, and mature final-mile delivery as their business grows, expands, and adapts to the changing market environment.
Stage 1: React & Act
Typically marked by independent autonomous departments with manual processes – often relying on a single location and a single carrier. This results in order fulfillment inefficiency and inconsistency with limited customer choices. Expanding carriers and rating & routing can help meet customer delivery expectations more consistently and reduce shipping costs, helping to protect margins.
Stage 2: Anticipate & Standardize
Shippers in this stage have begun to digitize key processes but still may suffer from data silos and manual entry across disparate systems. Begin to connect different systems through file import/export to eliminate manual entry. Shift tribal shipping knowledge to multi-carrier management system knowledge to make better delivery decisions and achieve even greater efficiency, redundancy, and predictability.
Stage 3: Connect & Automate
At this stage, shippers will have a more diverse carrier network with multiple users and integrated shopping-cart-to-shipping-station core systems for e-commerce, order, and warehouse management. To perfect within the warehouse walls, look to integrate multi-carrier parcel management into the fulfillment system and take shipping decisions out of the hands of IT and into the hands of logistics managers.
Stage 4: Collaborate & Expand
Businesses at this stage are going beyond their warehouse walls to realize omnichannel fulfillment, to support multiple sales channels, and keep inventory closer to customers. With the expansion to multiple locations comes a greater need for control over delivery decisions to accommodate non-traditional fulfillment locations like storefronts as well as 3PL partner warehouses. It is also when greater flexibility is needed to adjust shipping decisions based on customer delivery choices and carrier performance.
Stage 5: Orchestrate & Optimize
At this stage, businesses are likely to fulfill orders globally, drop-ship from supplier inventory, and leverage an intermodal carrier network to execute zone-skipping consolidations. Dynamic planning and modeling are needed to carefully plan, optimize, and execute shipping. This provides company leadership with broader visibility and the ability to make timely, fact-based decisions to increase market share and profitably take care of growth opportunities.
Determining the stage you are in on the final-mile maturity model, and what you need to do and track to get to the next stage, will help shippers achieve the ‘perfect order’ predictably and repeatedly. If you would like to learn more about the final-mile maturity model, watch the recent Pierbridge on-demand webinar, “How to Achieve Delivery Excellence Through the Final-Mile Maturity Model”.
Mark Picarello is Managing Director, Pierbridge, part of the WiseTech Global Group. Mark joined Tracer, Inc in 1992, where he was responsible for Channel Management and was instrumental in growing its international VAR network. He was appointed Director of Product Marketing for the eCommerce division when Kewill Systems acquired Tracer, and later served as VP of Sales and Marketing. In 2004, he joined Pierbridge as COO, responsible for Product and Operations. Now, as Managing Director at Pierbridge, Mark is leading the expansion of delivery services and integration to WiseTech’s CargoWise platform.
How is your progress on the quest for delivery excellence and the ‘perfect order’?
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