However, this exponential growth doesn’t come without its challenges. With a sudden surge in demand and increasing customer expectations, the logistics for the e-commerce players are under pressure like never before. At a time, when the customers depend on e-retailers for their gifts to friends and relatives, and when constant travelling plans of customers mean a stricter and tighter delivery deadline, it is essential that the e-commerce players show more accountability and efficiency when it comes to last-mile deliveries. With home deliveries now the new norm, supply chain managers need to ensure that they adhere to their SLAs and avoid miss-routes to provide on-time deliveries to their customers
Another pressure point during this season is the need for additional man-hours. To cope up with the surge in demand, companies tend to work on two fronts: intake extra delivery personnel and include additional working hours in existing personnels' day. However, the number of personnel required and the additional number of deliveries in the extra hours are factors that are only estimated by supply chain managers based on their experience and intuition. Even though the estimate can be correct for a normal day, the festive spike in demand means that there is always a good chance of the estimates going haywire. In such a situation, a shortage of personnel can affect the delivery and an overabundance of staff can lead to extra costs for the company.
Traditionally companies relied on pin codes (postal system) for delivering orders. However, if the deliveries are spread across the area associated with the pin code, or a single delivery person is given more than one pin code to deliver, the task can become overwhelming for a single person. To account for this situation, and ensure load balancing, companies started creating their own zones for deliveries. Working with delivery density, this method ensures fairness and efficiency in last-mile deliveries. However, during the festive season, uneven distribution or really heavy volumes throws off the usual zones as well. This led Locus to come up with Route Optimization, which provides dynamic clustering that ensures minimum overlap of clusters and guarantees optimum delivery routes.
Modern AI-based solutions account for real-life constraints and consider historical data for future projections. These solutions can also help organizations in their decision-making process such as -- the number of employees to hire during the festive season and the number of deliveries done in the additional working hours. Some solutions available also provide more visibility for the customers by providing them with live tracking links and details of their delivery status, thus increasing customer satisfaction. Tracking of resources also helps the top management in understanding on-ground issues and taking better business decisions.
Certain allocation engines give an automated recommendation on the best-suited vehicle based on traffic, shipment volume, shipment type, vehicle type, stop durations, and delivery timings. The algorithms take into account the new vehicles that might have been added during the festive season and provide optimal utilization of the vehicle capacity leading to less number of vehicles required.
Lastly, and perhaps the most important field where technology helps is with the delivery executives. Our solutions ensure that its optimal routes lessen the hassles faced by delivery executives. The load balancing feature provides fairness and that the delivery executive is never overworked. Maximum deliveries also give better bonuses to employees who are working on pay per delivery model, adding a little glitter to their Diwali as well.
The author, Toshi Prakash, is Vice President - Product, Locus.sh.