Addressing the challenges of urban logistics for retail deliveriesMarch 1st, 2016
At a time when retailers are looking to the home delivery side of their operations to grow business, efficient logistics are becoming an increasingly challenging proposition. The response to consumer demand is clear with 72% of retailers now offering next day delivery and 56% being able to deliver worldwide (Source: 2014 MICROS Multi-channel Retail Delivery Report). Over the last five years, home delivery vehicle fleets have increased in numbers steadily, but the common focus now is on “sweating the assets more heavily”. This means the microscope is now out to identify where a retailer can add one or two extra deliveries on each vehicle shift or fine-tune a multi-shift pattern to maximise vehicle use. Failed deliveries are a serious issue for the industry, with the IMRG Valuing Home Delivery Review 2014 forecasting that they will cost £771m this year alone across marketplace and multi-channel retailers. Detailed analysis of your operation to reduce failed deliveries and identify additional cost savings is challenging, and successful retailers have a range of tools to help optimise the logistics side of their home delivery operations. Their efficiency is dependent on the quality of the data used however: let’s look at a couple of examples of road data in scheduling solutions and postcode data in tracking systems.
Planning and scheduling
Key to cost reduction, the scheduling system calculates the least cost routes and schedules for each vehicle, taking such details as capacity (weights and volumes), delivery area and driver shifts into account. To calculate optimal journey times and distances, scheduling systems need detailed mapping with realistic speed values. Typical issues faced by retail delivery operations include routes not being as efficient as possible or the scheduler sending vehicles down roads and streets that can’t be accessed due to vehicle size or it being a one-way system. Poor use of available space within delivery vehicles is another common problem, which then necessitates inefficient additional runs by other vehicles.
Fortunately these issues can be addressed by incorporating the right data into your system. Harnessing road speed information allows access to average speeds of cars and trucks which also vary according to time of day. Your scheduling system such as Oracle Real-time Scheduler or TRUCKSTOPS VRS can then use these speeds to create more realistic delivery windows. Road restriction data – including one-way systems, banned turns, low bridges and weight-restricted bridges – is another good choice. This data will stop your scheduler (if it is capable of taking the data into account) from directing vans and trucks down roads that they aren’t able to use. It is also important to consider the road network’s tendency to change, with new roads being built, roads being closed and major road-works continuously taking place. To account for this, it’s a good idea to keep your map data updated. Once per year is recommended as an absolute minimum, twice per year or every quarter is even better. Additionally, for long-term road works or closures, best practice is to build these into your model to reduce the impact on fleet scheduling.
Monitoring and tracking
Comparing the plan with what actually happens on each run enables the retailer to fine-tune the scheduler and continuously improve efficiency and customer service. Tracking systems can check when the vehicle is close to the delivery point and automatically report whether it is within the planned time window, for example. To do this it uses a process called “geofencing” which relies on geographic co-ordinates to locate the customer’s premise. The co-ordinates are usually derived from the customer’s postcode. The area around the co-ordinates (e.g. a 50m circle) is then set as the geofence and the tracking system automatically reports when the vehicle enters or leaves the area. In rural locations the postcode can cover a wide area, meaning that vehicles may make a delivery without ever triggering the geofence. This makes it difficult to consistently report on issues such as customer service and time window adherence however. So what are the steps you can take to address these problems? Use the most accurate postcode information available to place your customers on the map and make your geofencing even more reliable. Alternative approaches can make use of the location data captured from the handheld terminal when the driver completes the job, or be based on vehicle statuses such as ignition off and on and rear doors open.
Getting the most out of your logistics systems
With no sign of online shopping slowing (the BRC reports 19.8% growth for online non-food sales in August), the challenge now is for retailers to provide a speedy, efficient and cost-effective service to their customers. Make sure your systems are using the most up to date, detailed data with as many variables (e.g. heights and speed per vehicle type) as possible. Take care that the data is geographically correct (e.g. location information is as precise as possible) and finally: don’t be afraid to spend what’s required. Don’t scrimp on systems or datasets costing thousands of pounds when they are targeted to underpin £1 billion plus of annual revenue.
So how can you find this data? Allmapdata and Truckstops has worked with spatial data for 30 years and have seen ever increasing complexity in the choices available in terms of licensing and formats. To help you find your way through the options, visit www.allmapdata.com where you will find all the data discussed above, ready to use straight out of the box in whichever software solution you favour. Investing in the right data is one simple way to make a quick win, saving money and improving customer service. As one key retail customer explained:
“Efficient, timely delivery is a fundamental feature of our home shopping proposition, so it is essential for us to use the most appropriate software and data available for our delivery planning system.”