Analyst Insight: When customers place an order for delivery, they anticipate receiving it exactly as expected. Having grown accustomed to ordering online and finding the package sitting on their front porch, they have high expectations. Yet the last mile of delivery is a complex area, with room for improvement in the coming years. 

To understand this complex part of supply chains, APQC gathered insights on last-mile delivery from 1,157 global organizations. Last-mile delivery requires complex cooperation and coordination across multiple organizational silos, and three main areas emerged for improvement: consistently providing proof of delivery, enhancing customer order visibility, and increasing vehicle capacity utilization. 

Obtaining electronic proof of delivery for orders may include getting customer electronic signoff or taking delivery snapshots. At the median (or midpoint), 80% of organizations do this. But bottom performers are not obtaining proof on 30% of deliveries. It is an important part of last-mile delivery that some organizations have yet to embrace consistently.

Emerging transportation methods, like drones and sidewalk delivery robots, are adding to last-mile complexity. Regardless of the form of delivery, customers uniformly want to receive proof, especially for high-value or dangerous products. Supplying delivery proof can prevent disputes about whether an order was received, when it arrived, its condition and whether it was complete.

Increasing customer order visibility for the last mile is an area where organizations should act. APQC examined the availability of digital assistants that enable customers to see real-time order status. Less than half of organizations provide digital assistants to customers to view the real-time status of their order or shipment to a significant or very great extent. Enabling this visibility decreases the volume of inbound contacts from customers seeking their order status.

For those organizations that do give customers real-time visibility, only 47% extend that visibility into the last mile of delivery. For almost one-quarter of organizations, this visibility is present to only a small extent (or not at all for 3%).

Consumers have been trained by shopping and ride-sharing apps to expect complete visibility. Just knowing an order has “shipped” is no longer enough. As some companies stretch the definition of “shipped” to mean that a label was printed, customers increasingly want to know exactly where their orders are until delivery.

One more measure to look at: last-mile vehicle capacity, referring to the percentage of available capacity utilized or filled when the vehicle is loaded at a departure location (such as a plant or fulfillment center) and departs to deliver products to their final destinations.

On average, median vehicle capacity is 85% full. A full truck enables the organization to get more orders to customers sooner, depending on routing. If fewer trips are needed, then the organization can reduce empty truck miles, which in turn saves overhead costs. Fewer trucks on the road means less traffic and pollution. Since even an empty truck in motion emits carbon dioxide, organizations can reduce carbon emissions by filling trucks as much as possible. 

Outlook: Increasing performance on key last-mile delivery measures requires organizations to improve multiple processes within end-to-end fulfillment. As supply chains become more digital, it should get easier to provide proof of delivery, enhanced order tracking and real-time visibility. Filling delivery trucks completely and evolving transportation methods can also help. The last mile is difficult and often expensive, but to the customer it’s the most memorable and important part of receiving their order. 

Resource Link:

www.apqc.org