How to Optimize Same-Day Delivery in Your Supply Chain?
Customers expect a new standard in terms of delivery speed when placing orders online. Amazon and other market leaders have reset the benchmark by optimizing their supply chain to achieve same-day delivery. The potential for same-day delivery to revolutionize the way customers shop is enormous. This is the ultimate in eCommerce. It combines the convenience of online shopping with the ‘here and take it’ speed of offline retailers.
A growing number of companies are now piloting new models of same-day delivery. These include logistics providers such as FedEx, UPS, and DHL. As they try to offer the fastest shipping options for consumers, Amazon and Walmart continue to invest heavily in their supply chains.
Walmart introduced next-day delivery in 2019, which was only available to 75% of US residents at the time. They also provided Walmart 2-day shipping promise. Amazon also made their 2-day Prime free shipping program into an all-day, one-day shipping program that year.
Why is same-day delivery important to your supply chain?
Retailers offer a variety of delivery options to meet customer demand. Today’s customers can place orders on their phones and receive them within 24 hours thanks to services such as Amazon Prime or Next Day Delivery by Walmart. A global survey found that 80% of consumers want their products delivered within 24 hours.
Here are some reasons that same-day delivery is crucial for your business’s supply chain, considering the increasing consumer demand.
1. Immediate solutions to supply chain problems
Sometimes, parts of your supply chain get stuck, delayed, or lost. Your business may need a solution. You can be sure that you will have what you need the next day with a same-day courier service. Sometimes, it may even take an hour, if your supplier is not too far. You don’t have to limit your options to small packages. There are rush couriers that can transport anything, from small boxes to palletized materials up to 10,000 pounds.
2. Delivery guarantees
Delivery guarantees are also available for same-day couriers. Traditional delivery options don’t guarantee delivery and can lead to delays or total loss of packages. You can be confident that your delivery will be handled by a courier service in a hurry with GPS guidance and expert drivers.
3. Prepare for uncertain situations like COVID-19
Contactless delivery is possible thanks to COVID-19. Courier drivers know how contactless delivery can help reduce the risk of COVID-19. The driver can notify the customer by sending a text message, email, or simply calling the doorbell after delivering the package. This will eliminate the possibility of a COVID-19 transmission to the customer. This protects the driver from transmission damage.
4. Keep your business up and running
It is crucial to make sure your business runs smoothly in today’s challenging times. Your business will need bonded courier drivers and drivers who are well-versed in health safety best practices. They must also ensure that your business is running smoothly, despite any hiccups.
How can you optimize your supply chain to ensure same-day delivery?
A company’s supply chain aims to connect production with the sale, distribution, and shipment of its product. Optimizing production processes is essential to maximize revenue. This will prevent unnecessary warehousing and product shortages that can negatively impact customer satisfaction.
To maximize profits, the best-case scenario would see products being sold and shipped within 24 hours of their clearing factory. This is impossible in the real world. There are a few ways you can modify and optimize your supply chains to meet the same-day shipping demands. Let’s take a closer look at each of them:
1. Assess realistic demands
Smart inventory management is essential for same-day delivery. You must first assess your real demand before you offer same-day delivery. You will need to answer multiple questions.
- Are you able to sell last-minute groceries or gifts?
- How often do you get requests for same-day shipping?
- Are you able to deliver same-day in a particular location?
- Also, you need to evaluate your existing staffing and delivery channels.
If your assessment suggests that customers are looking for same-day delivery, there are two options. Either you handle the whole process yourself, or outsource fulfillment to third parties (3PL). You can keep the process internal if you choose. To ensure a smooth operation and customer satisfaction, you’ll need to develop an integrated supply system. Third-party operations offer several benefits, including the ability to save time and increase your reach and be scalable and adaptable depending on demand.
2. Utilize distributed order management (DOM) systems
Companies that offer same-day delivery must have a central system to manage the supply chain. A distributed order management system is essential for customers who purchase through multiple channels. DOM gives you a 360-degree view of your inventory, orders, and shipments. This allows you to track and monitor product status from production through delivery.
A distributed order management system (DOM) that is effective includes software that prioritizes automation as well as system integrations. Automating fulfillment allows companies to maximize fulfillment, while system integrations transform DOM systems into centralized hubs that handle all fulfillment activities.
3. Ensure regular audits of the supply chain
Auditing a supply chain plays an important role in monitoring its performance. This helps you to identify weaknesses in the supply chain and gives you a better understanding of how to improve delivery speed.
There are many ways to approach supply chain audits. This involves assessing the efficiency of distribution centers workers and measuring their accuracy. Distribution centers are vital for a retailer’s supply chain because they provide a reliable and efficient service to customers.
Auditing the distribution center can help you ensure that it is operating at its best. Spot-checking vehicles is another common method of auditing. This allows you to verify that stock is loaded on vehicles correctly and orders are being completed correctly. These tests can identify potential errors in the supply chain, and allow for the generation of accurate performance reports that will help you to optimize your operations.
4. Enable efficient distribution model
Businesses can change to a different distribution model based on the results of the audit. Many organizations depend heavily on the hub and spoke distribution model. Argos is one of the first major U.K. retailers to offer same-day delivery.
Companies can use hub-and-spoke systems to have a mix of large distribution centers and cross-docking locations located near their customers, rather than in a central warehouse. A hub-and-spoke system allows drivers to make timely runs among suppliers, distribution centers, cross-docks, and customers based on anticipated demand. This helps reduce the transport cost of same-day delivery.
Partnering with third-party logistics providers (3PLs) can further enhance these benefits. This allows businesses to quickly test the success and demand for same-day delivery without having to invest in long-term contracts or make large upfront investments.
5. Prepare an effective warehouse
When upgrading their supply chain to allow for same-day delivery, businesses must ensure that their warehouses are well prepared. To meet delivery deadlines, a warehouse management system (WMS) is necessary.
A short interval waving WMS is a tool that many companies use to better coordinate their warehouses. Short-interval waving divides orders into smaller intervals called “waves”. This simulates a day’s workflow, based on order characteristics and order departure plans, labor constraints, and equipment constraints. The WMS will only accept a satisfactory plan and release waves throughout the day. This technology allows for coordination of activities to ensure same-day delivery of large quantities of items.
A cartonization software is another way to set up a warehouse ready for next-day delivery. Cartonization is a process that evaluates items in order to determine the size and number of shipping cartons required. To calculate the best way to pack each carton, we use the weight, height, length, width, and depth of each item. This allows warehouses to pack orders faster and has a quicker turnaround.
Failure to meet fast shipping demands will eventually lead to companies losing out to market leaders such as Amazon and Walmart. This is why such companies must adapt quickly to the new model, no matter how daunting it may seem.
Third-party logistics providers can be contacted by organizations to help them achieve their delivery goals. There is a shortage of 3PL available in the market. In order to achieve same-day delivery, it can be a benefit to focus on seamlessly linking your supply chains to these third-party logistics providers.