| Sr. Director- Digital Transformation & Innovation Advisory, SAP | Ensuring Customer Success & Building Winning Teams

3 Mantras to decode the Last-Mile deliveries in congested cities

Written by: Bharti Maan
About the author: Sr. Director- Digital Transformation & Innovation Advisory, SAP  | Ensuring Customer Success & Building Winning Teams  

As Covid spread its nasty pangs, the business of prophecy started working overtime to define how will it change the world and how the new normal will emerge. But almost ten weeks since the near shutdown in most parts of the world, the predictions of new normal have started to fade. The new normal of the world fortunately or unfortunately is the same old stuff with masks, extra focus on hygiene and low touch. People are longing to leave home, go to work, meet friends, go shopping, travel and even gather together to protest against their governments. And wherever they have a chance, they are doing it. Life is turning to what it was in the pre-covid era . The risks of economic recessions, unemployment and people dying of hunger now far outweigh the risks of the pandemic.

So pandemic or no pandemic, statistics will change only marginally. Migrants who had left the cities vouching “never to return” are already booking their tickets to return. It will be a world of urban centers- cities and mega-cities and this is where retailers will continue to focus. Attuned to the nature of the modern retailing, these urban centers are suitable for both classic retail concepts as well as disruptions. The sheer size, population growth and economic scale have transformed these urban centers into the most compelling landscapes for international retailers on a global scale. Most urban centers imply equal opportunity for all- mega-retailers are expanding, e-commerce is buzzing and owner manned small shops are mushrooming at every nook and corner.

Last-mile defines a huge opportunity. Over the last 10 years, buyers’ journeys have evolved. Consumers have moved to purchase tickets online, banking virtually, and they are not interested in setting foot in electronic stores. Increased focus on customer experience management in the final segment of supply chains where products are delivered to customers in this vast market is the key to their conversion. And it is not just about e-commerce deliveries. Small Retailers have a big role to play as people shops for a wide range of products. Today, there are hundreds of use cases out there showing how solving one small part of the customer journey yielded X in conversions.

Time to move to urban centers. Most mega-cities have arcane city planning and regulations. There are time restrictions and infrastructure constraints. Not all vehicles can reach all parts of the city. Sudden traffic congestion need smart route and vehicle planning. Fragmented demand, the wide array of products and SKUs add more dimensions to the complexity of last-mile delivery. Mega retailers stay focused on offering choices, e-commerce cares for on-time and small stores offer instant gratification but carry an inventory of 2-5 days and their stocks must be replenished frequently.

Organizations are continuously evolving their supply chains to succeed across the formats and exploring innovative models. But one innovation will not solve this problem. Organizations must mine and model the wealth of data on vehicle movements and product sales and re-purpose the business models to improve the design and customer experience. Innovations in distribution network modelling, combined with simulation and visualization technology, can dramatically transform the way companies view, design, and manage the last mile in densely populated urban centres.

Leverage Insights from Old Wealth to make more informed decisions

Technology’ has the alluring promise to remake the last mile. The starting point toward even the most dramatic improvements is making more vigorous use of the data that companies already own. Basic assessments like delivery network performance based on essential Key Performance Indicators, such as total time and distance traveled, and the percentage of goods delivered hold the key to an aggregate view of last-mile operations.

Gradually it is time to build more aspirational models using multiple data sources — transactional data, census and geo-spatial data, and information on driver activities, the voice of customer and partner data. Analytics and management dashboards provide decision makers with insights both on the strategic and day-to-day patterns of last mile deliveries like retailer behaviours patterns adding to inefficiencies, recurring patterns around service time, anomalies and discrepancies, congested areas to choose the right delivery vehicles, the time needed to find parking spaces, theft and snatching prone areas. This helps forecast the likelihood of service failures due to disruptions or unanticipated demand spikes, improvise on the efficiency of different delivery models, load configurations, decide on vehicles and correctly estimate the money it takes to serve specific customers in certain parts of cities. In Santiago de Chile, the municipal government, in conjunction with the national Ministry of Transport, is using a last-mile model to improve the availability of dedicated parking bays for freight vehicles supplying the inner city.

New real-time data models can help companies develop entirely new last-mile supply chain strategies and enable them take decisions about the risk factors in any supply chain like potential and future risk signals from suppliers. Organization can combine contracts, invoices, and open purchase orders, sales, marketing, finance together with internal and external factors that signal financial, operational, regulatory, environmental, and social risks emanating from the supply chain. They can identify at risk- suppliers and identify alternate sources.

Envision the Future, Simplify the Present

Supply chain models are becoming more and more granular. Augmented-reality visualizations are another set of innovations changing the last mile delivery. Supply chain professionals are now using a visual displays like city map for planning better. They can now move, add, or remove objects/elements within the map to change the network configuration and market environment. The advanced systems can immediately displays the cost implications on the map for any point within the city.

Deploying interactive simulation and visualization tools in this way enables faster and more dependable decision making.

Perfect the Customer experience- Initiate your Customer Journey Orchestration Today

The customer journey impacts every business function of the company. Customers want and expect a more concise, more personalized journey than they had yesterday. Most successful companies are using the wealth of insights hidden in your data to shape their business strategy around the most important part of their organization: the customers. They are perfecting the customer experience (CX) and using analytics to create exhilarating customer journeys, omni-channel strategies and ideating business-led and impact-driven, scalable, production-ready use cases.

Leave a Reply

Your email address will not be published. Required fields are marked *