Today, delivery has become a critical factor in defining the future of ecommerce companies — millennial consumers want their products and services delivered in short timelines. Whether online or offline, the economics of every retail business is measured based on its logistics and delivery mechanism. In this dynamic digital retail environment, the logistics battle keeps getting bigger, especially with same-day delivery coming into focus for many logistics providers. This article explains ways to optimize supply chains for same-day deliveries.
A ‘new normal’ has come to the fore for the delivery speeds that customers expect when they order online. The benchmark has been reset by the likes of Amazon and several other market leaders by optimizing their supply chains to accomplish same-day deliveries. Same-day delivery has the potential to fundamentally change the way customers shop. It is the holy grail of ecommerce, as it marries the convenience of online stores with the ‘here, take it’ immediacy of the offline players.Â
In recent years an increasing number of companies have started piloting and operating new models of same-day delivery, including logistics providers, such as DHL, DPD, FedEx, UPS, to name a few. Amazon and Walmart have continued to invest significantly in their supply chain as they compete to provide the fastest shipping options to consumers.Â
In 2019, Walmart announcedOpens a new window its next-day delivery service, which was available to 75% of the U.S. population back then. Besides, they also offered the Walmart 2-day shipping guarantee. That same year, Amazon transformedOpens a new window its two-day Prime free shipping program into a one-day free shipping program.
Why Is Same-Day Delivery Crucial to Your Supply Chain?
To meet consumer demand, retailers tend to offer options like same-day delivery, next-day delivery, and two-day delivery to customers. Thanks to services like Amazon Prime and Next Day Delivery by Walmart, today’s consumers can place an order on their phone and expect to receive it within 24 hours. A Â worldwide surveyOpens a new window revealed that 80% of consumers want their products delivered the same day.
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Same Day Delivery – Statistics and Trends
Source: INVESPOpens a new window
Looking at the growing consumer demand, here are some reasons why a same-day delivery solution is essential for your business supply chain.
1. Immediate solutions to supply chain problems
Sometimes, a part of your supply chain gets stuck, delayed, or even lost, and your business might be in absolute need of a potential solution. With a same-day delivery courier solution, you can ensure that you have the means to get what you need within the same day, sometimes within an hour if the supplier is not too far. This may not be restricted to small packages, as there are rush couriers capable of transporting anything from small boxes to 10,000 pounds of palletized materials.
2. Delivery guarantees
Same-day delivery couriers also have features such as delivery guarantees. Most traditional delivery solutions don’t guarantee delivery, resulting in delays or complete loss of packages. With the help of GPS guidance and bonded drivers that are experts in an area, you can feel at ease when a rush courier service is handling your deliveries.
3. Prepare for uncertain situations like COVID-19
With COVID-19, contactless delivery has sprung to light. These days, courier drivers are well aware of how contactless delivery can fight the risk of COVID-19. After delivering the package to a location, the driver can send an alert via text, email, phone call, or simply ringing the doorbell before leaving the premises. That way, the customer will be free of the risk of a COVID-19 transmission. This also keeps the driver safe from the transmission.
4. Keep your business up and running
In today’s testing times, it is vital not only to ensure that your business keeps running properly but also that it runs as safely as possible. Hence, your business needs bonded drivers and courier personnel who are familiar with health safety best practices. They also need to ensure timely deliveries to keep your business up and running despite hiccups.
Also read: COVID-19 Vaccines: Moderna and IBM Join Hands to Strengthen the Supply Chain
How to Optimize Your Supply Chain for Same-Day Deliveries?
The primary objective of a company’s supply chain is to link production to the sale, distribution, and shipment of a product. To maximize revenues, the company must optimize its production process to avoid unnecessary warehousing costs or product shortages, both of which impact customer satisfaction.Â
In a best-case scenario, products would be sold and shipped as soon as they clear the factory to maximize profits. However, this is hard to achieve in a realistic world. Yet, there are some approaches you can use to modify and optimize your supply chain to meet same-day shipping demand. Let’s look at each one in detail:
1. Assess realistic demands
Same-day delivery requires smart inventory management practices. Before you decide to offer same-day delivery, you need to assess your realistic demand first. For that, you need to answer several questions:Â
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- Do you sell items that customers require at the earliest, such as last-minute gifts or groceries?Â
- How often do you receive requests for same-day shipping?Â
- Do you have the fulfillment capacity to provide same-day delivery in a specific location?Â
- You also need to assess your current staffing and delivery channels that are in place.Â
If the assessment hints that there is a demand for same-day delivery from your customers, you have two options, either handle the entire process all by yourself or outsource your fulfillment to third-parties (3PL). If you decide to keep your process in-house, you will need to work on an integrated supply mechanism to maintain a streamlined operation and consistently deliver customer satisfaction. On the other hand, third-party operations have several advantages — they save time and money, expand your reach, and are scalable and flexible depending on the demand.
2. Utilize distributed order management (DOM) systems
A centralized system that oversees the entire supply chain process is critical for companies that want to offer same-day delivery to their customers. As customers purchase from various channels across your business, implementing a distributed order management system becomes essential. DOM provides a bird’s eye view of your inventory, orders, and shipments, allowing you to track and monitor the status of products from production to delivery.Â
An effective distributed order management (DOM) includes software that prioritizes automation and system integrations. Automation allows companies to optimize fulfillment while system integrations turn DOM systems into centralized hubs to handle all fulfillment activities.Â
3. Ensure regular audits of the supply chain
Supply chain auditing plays a crucial role in monitoring the performance of a supply chain. It helps identify any shortcomings in how it operates, thereby giving you a clearer picture of what needs to be changed to speed up the delivery process.
There are various ways to approach supply chain audits. It entails measuring the accuracy of deliveries or assessing the performance of distribution center workers. As today’s retail sector relies heavily on customer availability, distribution centers providing an accurate and efficient service to their stores are crucial for their supply chain process.
Hence, auditing the distribution center is a great way to ensure if it is working to its optimum level. Another common auditing approach is to spot-check vehicles. This helps verify whether a stock is being loaded onto vehicles properly and whether orders are being carried out correctly. Such tests identify errors in the supply chain and enable accurate performance report generation, making the path to peak optimization clearer.
4. Enable efficient distribution model
Depending on the findings of the audit, businesses can switch to a new distribution model altogether. Various organizations largely depend on the hub-and-spoke distribution modelOpens a new window . This includes retailer Argos, one of the first major U.K. companies Opens a new window to offer a same-day delivery service.Â
Hub-and-spoke systems provide companies with a combination of major distribution centers and cross-docking facilities situated near their customers rather than a central warehouse. With a hub-and-spoke model, drivers can make timely runs between suppliers, distribution centers, and cross-docks based on predicted demand to help mitigate the transport expense of same-day delivery.
These benefits can be further extended by partnering with third-party logistics providers (3PLs). This enables businesses to test the demand and success of same-day delivery without much upfront investment or long-term commitment.
5. Prepare an effective warehouse
Businesses must prepare their warehouses well when upgrading their supply chain for same-day delivery. Implementing an effective warehouse management system (WMS) is essential to match speedy delivery demands.
Many companies look to a short-interval wavingOpens a new window WMS, as it allows managers to coordinate a warehouse better. Short-interval waving assigns batches of orders into small intervals called ‘waves’. This helps simulate a day’s workflow based on order characteristics, order departure plan, labor, and equipment constraints. Only when a satisfactory plan is created will the WMS accept it and then release waves throughout the day. This technology enables coordination of the activities needed to achieve same-day delivery of a large number of items.
Another way to prepare a warehouse for same-day delivery is to invest in cartonization softwareOpens a new window . Cartonization works by evaluating items to determine the number and size of shipping cartons needed. The weight, height, length, and width of each item are used to calculate how to pack each carton. This enables warehouses to have a much faster packaging turnaround to get orders out the door quicker.
Also read: International Women’s Day: 5 Most Powerful Women in Logistics
In conclusion
Companies failing to keep up with fast shipping demand will ultimately fail to compete with top retailers and market leaders like Amazon and Walmart. Thus, such companies need to adapt to this model soon, however daunting it may seem.
Organizations can approach reliable third-party logistics providers to help them meet the delivery goals, as currently, there is no shortage of such 3PL in the market. Thus, focusing on seamlessly linking your supply chain to these third-party services to ensure smooth and on-time delivery for your customers can turn out to be beneficial in the quest for same-day delivery.
Do you think the above tips can prove handy to optimize supply chains for same-day deliveries? Comment below or let us know on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . We’d love to hear from you!