In 2020, consumer online shopping generated some $861 billion, marking a 44 percent rise over the previous year. The logistics of getting the product to the consumer, or shipping, was a key factor in this growth. Often referred to as the last, or final, mile, the process of shipping the product to the consumer is arguably the most important aspect of supply chain management. However, according to Business Insider and various industry experts, it is also one of the most inefficient.
Importantly, the last mile contributes to customer loyalty. Good last-mile logistics translate into happy customers, while last-mile logistics rife with inefficiencies bring the potential to lose customers. According to the online publication Supply Chain Brain, 56 percent of customers will not return to a retailer if not satisfied with the shipping.
One major challenge that appears in the last mile involves the inability for customers to track the exact location of their product. While some larger businesses offer customers tracking codes, the reality is that customers want to know exactly where their packages are in real time at every stage of the delivery journey.
Shipping can be expensive for both the customer and the business. Many of the costs that are passed down to the consumer are related to paying for complex routes, extra stops, failed deliveries, driver salaries, and fleet operations. Moreover, if a delivery fails, costs are doubled. Ultimately, the consumer pays, but data shows that 55 percent of shoppers will not make a purchase if faced with higher shipping costs. Relatedly, late deliveries negatively impact a brand’s reputation, as they lead to angry, unsatisfied customers.
Outdated technology is also a major contributor to inefficient last-mile logistics in regard to tracking packages, making predictions regarding future challenges in the supply chain, and devising strategies for dealing with these problems.
One of the major ways in which companies can reduce inefficiencies in last-mile logistics is by implementing updated technology. Incorporating Internet of Things technology into their platforms can assist businesses in automating the storage of data, regulating and planning traffic routes, and communicating with customers and businesses to keep them abreast of any changes.
Automation is also key to reducing inefficiencies. Drones and other robotics can be used to take care of repetitive activities, allowing the business to divert employees to other high-need areas.
In addition, transportation management systems can centralize information in one place. Creating a centralized order fulfillment system will help businesses maintain order with last-mile expenses.
Finally, big data can provide a company with insight into its operations. Typically, data analytics assist businesses with making future predictions by looking at their past performance.
Outside of technology, businesses should look toward opportunities to outsource. For example, parcel services are experts at shipping, and contracting with such a company reduces the stress of having to devise an efficient way to get products to consumers. Furthermore, the gig economy is filled with nontraditional driver services, such as Uber and Lyft, that companies can use to make deliveries in large urban centers.
Importantly, the last mile contributes to customer loyalty. Good last-mile logistics translate into happy customers, while last-mile logistics rife with inefficiencies bring the potential to lose customers. According to the online publication Supply Chain Brain, 56 percent of customers will not return to a retailer if not satisfied with the shipping.
One major challenge that appears in the last mile involves the inability for customers to track the exact location of their product. While some larger businesses offer customers tracking codes, the reality is that customers want to know exactly where their packages are in real time at every stage of the delivery journey.
Shipping can be expensive for both the customer and the business. Many of the costs that are passed down to the consumer are related to paying for complex routes, extra stops, failed deliveries, driver salaries, and fleet operations. Moreover, if a delivery fails, costs are doubled. Ultimately, the consumer pays, but data shows that 55 percent of shoppers will not make a purchase if faced with higher shipping costs. Relatedly, late deliveries negatively impact a brand’s reputation, as they lead to angry, unsatisfied customers.
Outdated technology is also a major contributor to inefficient last-mile logistics in regard to tracking packages, making predictions regarding future challenges in the supply chain, and devising strategies for dealing with these problems.
One of the major ways in which companies can reduce inefficiencies in last-mile logistics is by implementing updated technology. Incorporating Internet of Things technology into their platforms can assist businesses in automating the storage of data, regulating and planning traffic routes, and communicating with customers and businesses to keep them abreast of any changes.
Automation is also key to reducing inefficiencies. Drones and other robotics can be used to take care of repetitive activities, allowing the business to divert employees to other high-need areas.
In addition, transportation management systems can centralize information in one place. Creating a centralized order fulfillment system will help businesses maintain order with last-mile expenses.
Finally, big data can provide a company with insight into its operations. Typically, data analytics assist businesses with making future predictions by looking at their past performance.
Outside of technology, businesses should look toward opportunities to outsource. For example, parcel services are experts at shipping, and contracting with such a company reduces the stress of having to devise an efficient way to get products to consumers. Furthermore, the gig economy is filled with nontraditional driver services, such as Uber and Lyft, that companies can use to make deliveries in large urban centers.
