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Last-mile logistics: tips for increasing efficiency Options for optimising a long-standing discussion point
The "last mile" continues to preoccupy people's minds, as it is precisely on this route, which is so important for the overall performance of the supply chain, that problems accumulate. The cumulative effect is rising transport costs and end customers who often have to wait longer than expected for their desired consignment. But why is the delivery process on this final leg of the journey so complicated and expensive? What impact do delays have on customer satisfaction and what optimisation options are there from an organisational and technological perspective? We address these questions in this blog article and present solutions that are already taking effect in certain areas. Others fall into the "dreams of the future" category.
FAQs
The last mile marks the final stage of a supply chain that parcels and goods ordered online usually have to cover during transport from the sender to the recipient or end customer.
Last mile logistics has the task of delivering orders from a distribution centre to the end customer as efficiently and quickly as possible. This involves coordinating retailers, freight forwarders and courier services as well as the use of delivery vehicles.
Increasing parcel volumes, traffic jams and an inadequate transport infrastructure are a major challenge for last-mile logistics. The delivery process is therefore difficult to plan and involves a great deal of organisation and communication.
"Construction sites" and conflicts over the last mile
The current drop in consumer sentiment is also reflected in the balance sheets of online retailers, according to which sales have fallen by 12 per cent: A permanent downturn is not to be expected - the convenience of e-commerce is too tempting for end customers. However, providers are faced with the daily challenge of managing problems with last-mile delivery, which is difficult to plan.
For example, we are familiar with the image of delivery vehicles parked in the second row at their destination and obstructing traffic - especially in city centres, where exhaust and noise pollution is also high. Delivery services operating under time pressure are also confronted with constantly increasing parcel volumes, often ambiguous addressing and recipients who cannot be found on site. Retailers are suffering in particular from falling margins caused by the increased time and cost of parcel delivery and the fact that they have to compensate for a parallel increase in the volume of returns.
Solutions at the mobility level
In the case of vehicles in particular, we are working flat out to bring alternatives to vans , which are often still used as combustion engines, onto the roads. Cargo bikes, e-scooters and e-bikes are proving their worth in some cases, but are still a long way from becoming widespread. Autonomous vehicles, robots and drones are also being tested in particularly critical traffic areas. However, these technologies are not yet fully developed and are still subject to criticism in terms of liability. The extent to which artificial intelligence (AI) can contribute to optimisation is also still an open question.
Solutions from a strategic perspective
The growing number of parcel stations is another opportunity to make the delivery process more efficient. Bundling orders from several customers into one consignment helps to minimise traffic and environmental impact at the same time. There is also the option of having parcels delivered decentrally by local courier services. The biggest advantage of this is that senders do not have to maintain their own resources such as vehicles and staff, which saves time and money. However, the coordination effort involved should not be underestimated and often cannot be reliably afforded.
Another solution is "Click & Collect", which allows retailers to collect goods ordered online from the shop themselves. But you have to be honest: Even if the effort for suppliers is massively reduced, fundamental responsibilities are shifted to the customers, who usually travel by car and accept a (re-)journey that would otherwise not be absolutely necessary. Logically, the same also applies to parcel stations, unless they are set up in the immediate vicinity of the recipient.
EWM packing table – pack shipments quickly and accurately
So how about taking the reins into your own hands and taking precautions to optimise the shipping process and eliminate cost drivers even before handing over to the last mile interface? This process can already begin in the warehouse - with the so-called "Extended Packing Station". After all, in addition to adherence to delivery dates, delivery quality also has an influence on customer evaluation behaviour. All dispatch functions are integrated directly into SAP via IGZ Best Practice: The employees at the packing table call up one delivery at a time and are guided through the entire packing process via visual overlays. In addition, weight data is automatically read out, tracking numbers, product codes and routing information are assigned and service provider-specific shipping labels are generated. Several CEP service providers can be integrated in the SAP standard.
Control and Track & Trace paired in one system
The IGZ Best Practice "Extended SAP Express-Ship-Interface" for SAP EWM and SAP TM is a convincing extension of the SAP standard for connecting parcel service providers and freight forwarders. This means that the entire shipping process is fully mapped in the standard software, eliminating the need for additional subsystems for shipping and label printing. It is also possible to determine shipment status data online using the tracking number of service providers and assign it to a delivery.
Their Track&Trace functions can also be integrated into SAP so that information on the current "whereabouts" of a parcel can be called up online at any time. SAP standard tables are used for the routing and postcode-based control of consignments, minimising interfaces and eliminating unnecessary time delays and the associated costs. We have described the functionality and added value of "Extended Packing Station" and "Extended SAP Express-Ship-Interface" in more detail in the article "CEP connection in SAP – optimise shipping and save costs: Dispatch processing directly in SAP".
Conclusion
As already mentioned at the beginning, not all problems with the last mile can be mastered with the help of both IGZ best practices - nevertheless, both shippers and service providers benefit in important areas from these and other solutions outlined in this article. Ultimately, however, the last mile is and remains a mammoth task in which a large number of stakeholders from different disciplines in logistics and the mobility sector should be involved (in close cooperation where necessary). This is the only way to achieve results that are ready for implementation more quickly and hold out the prospect of fully optimising the last mile.
On the one hand, this would benefit the environment; on the other hand, it would also serve the increasingly demanding customers, who are increasingly looking at "events" from two perspectives: They want the goods they order to arrive at their destination on time, in the desired quality and quantity, without any delays in delivery. At the same time, they are attaching increasing importance to a much more sustainable organisation of the last mile.
Do you have any questions or would you like further information on the subject of last mile logistics?
We look forward to hearing from you!
