Effectively managing last mile deliveries has always been challenging, but never more so than during the past year. It is one of the fastest-growing and often the most complicated part of a supply chain.
Challenges Facing eCommerce Companies
Demand for all types of goods delivery has increased exponentially, creating major headaches for shipping companies trying to satisfy their customers. A considerable part of the demand has come from the huge increase in e-commerce, and these consumers want faster fulfillment and faster last mile deliveries.
Nowadays, more companies offer online shopping, and consumers have a considerable choice as to how they shop, which places more pressure on brands and retailers to ensure they can adequately meet these demands. Increasingly, companies are offering free shipping for a minimum spend which is often quite low, further eating into the all-important bottom line. Then there is the question of ensuring an adequate supply of inventory to meet consumer demand. The pressure is on to create more efficient delivery premises and to have a good logistics network in place, including transportation for last mile deliveries, and which can meet expansion plans.
Ensuring Your Logistics Network is Ready to Meet Demand and Expand
It is important to know your customer base and understand their needs, so you can meet demands and expand when the time is right. These include product selection and delivery times. You may have some products that consistently outsell others. Think about how best to prioritize this inventory and fulfill orders quickly.
While you need an adequate inventory, it can be risky to tie up large amounts of capital with a product that may fail to sell promptly, especially given the fickle nature of consumer demand. Work out the percentage of sales from best-selling inventory and identify items that may be slow to move but need to remain in stock.
Smaller Fulfilment Centers
Adding smaller fulfillment centers nearer to high-density areas can reduce costs and ensure faster delivery for best-selling items. Although adding more fulfillment centers can increase warehousing costs, it will reduce transportation costs and increase sales through more efficient last mile deliveries to customers.
Another important part of the logistics network is the packaging. Inefficient packaging can increase costs greatly, especially for companies that choose to offer free or low-cost shipping. It can also be extremely irritating for customers to receive a poorly packaged item. They may be left with an excess of packing material to dispose of, or the item is more likely to arrive damaged.
This is where MagicLogic can help. One of the main applications of our BlackBox® software is Cartonization. It selects the correct box for eFulfillment orders in near real-time, order after order. Maximum fill rate is its main objective, and it is lightning fast so that the results can be used during checkout. Add sophisticated loading rules into the mix, and you can be sure customers receive well-packaged items in properly sized cartons in perfect condition. Your company saves time and money in packaging costs and fewer returns due to damaged goods.
BlackBox is compatible with any WMS/ERP system, and minimal work is needed to achieve integration. Many companies are already leveraging the power of BlackBox, including multiple Tier 1 logistics service providers. To get an idea of how we could help you, read our case study on Toysmith here.