How to boost efficiency across your transport operation
What does an efficient transport operation look like? How can you execute one effectively, balancing the needs of your business and the demands of your customers?
If managing transport is one of your responsibilities, then you will be aware that there are many plates that you need to keep spinning. When it comes to running a distribution operation there are many costs involved, you must keep customers happy and getting a good return on investment on your drivers and vehicles is key to success.
Whether you are looking to overhaul historical paper-based processes or to get competitive edge through delivering great service, here are some things you should bear in mind as you review your day-to-day delivery processes.
Know your operation
You may think this sounds obvious but how well do you really know your distribution operation? How many drops do you have going out a day, how many vehicles, how many customers, how many delivery notes, how many sheets of paper per delivery note, how much fuel are you using, how many customer calls are you dealing with each day? This may sound obvious but do you really know exactly what’s going on across one of the most expensive divisions of your business?
You need to have information, and if you are running a paper-based operation that can be difficult. But if you have an ERP solution in place some of this information may be available to you more easily. For starters, have the following information at your fingertips:
- How many customers do you have?
- How many drops do your vehicles do per day/week/month/year?
- How many delivery discrepancies are you dealing with every week?
- What is the cost implication of those discrepancies on your bottom line?
- What is your time to invoice?
- How much admin is involved in the process from order confirmation to order completion?
- How does your operation compare to that of your main competitors?
- What is the lifetime value of a customer?
If you know what you have moving where then that’s a very good starting point. If you don’t then you are not alone. At least 30% of the companies we speak to don’t have all the metrics they need at their fingertips; it’s because in a fast paced, high service demand environment, there is always someone else, or something else that requires your attention.
Be clear about your KPIs
You need to know exactly what metrics to measure and how to get that information from your business. If you are running a manually planned system just working out what work has been completed can be difficult. If you have some form of transport planning system, we suggest that you have the following information available for regular review:
- How much are you spending on fuel each month?
- What is the cost per drop across your operation?
- What is the average value per delivery?
- How much revenue are you losing to delivery discrepancies?
- What is your first-time delivery success rate?
- What is your On Time In Full (OTIF) delivery performance like?
- What is your customer churn?
Data is key when you are trying to make decisions around change or process improvement, but we know that it’s not always easy. If you don’t have some form of route optimisation or distribution planning system in place it will take time to drill down to what KPI information you have. It’s do-able, not impossible, but some form of intelligent transport management system will help, especially if you are reviewing your final mile delivery performance.
Understand your customer requirements
What is the lifetime value of a customer? If you operate a multi drop distribution operation, that relies on repeat orders for revenue growth then understanding the needs of your customers is going to be essential in reducing churn.
Various studies have shown that the likelihood of a new customer buying from you is anywhere between 5-20%, whereas existing customers are 60-70% more likely to buy from your business. So, are you keeping track of what’s happening once your vehicles leave the depot? Are you meeting customer expectations? How many deliveries are on time vs late?
- What do you need to know about your customer experience?
- Are you drivers following the routes you are setting?
- Are your deliveries getting to the right place at the right time?
- Are customers being informed if deliveries are running late?
- Are your drivers well presented, courteous and reflecting your brand values?
- Is your customer churn increasing?
If you have answered ‘yes’ to any of the above questions, it might be wise to take a long hard look at what is going on across your operation once your delivery vehicles are out on the road. Irrespective of whether you are delivering to businesses (b2b) or consumers (b2c) the lines around service expectations have changed massively since the pandemic. We all know how important good service, reliable time windows, and delivery tracking information is to the overall experience and how we feel about a company. It’s worth bearing this in mind!
Is it time for a change?
Costs are rising, service expectations are high and keeping customers happy and your business profitable is or critical importance. Help is there if you need it – if you are running a manually planned operation, relying on the movement of paper tickets then you are not alone but it may be time to consider a change.
Here at Podfather we specialize in the development and delivery of route planning solutions that help transport operators cut costs and deliver great customer experience with one back-office planning system and an easy-to-use driver app.
We are one of the many route optimisation solutions out there. Our USP is both our solution and our team; for us it’s all about the journey from initial engagement with us through to a successful ongoing working relationship.
If you are one of the many transport operations people that we speak to who are spinning plates then may be it’s time to give us a call on tel: 0131 553 0400 or drop us an email at email@example.com It doesn’t have to cost the earth to release the huge benefits that we know you can bring to your operation.
Podfather specialises in the development, delivery and support of route optimisation and electronic proof of delivery technology. We are a UK-based team, located in Edinburgh, and we are passionate about what we do. We work with companies of all shapes and sizes, from industry giants such as Tarmac and Breedon to well-known names such as Rexel and ODDBOX and everything else in between. It doesn’t matter what you are delivering but if you have a multi drop distribution operation and are looking to make changes then we can help. Our solution includes the following as standard:
- Route planning and optimisation
- Vehicle checks
- Customer ETA notifications
- Driver tracking
- electronic Proof of Delivery (ePOD)
Together we can help you improve cashflow, reduce empty running across your fleet, improve delivery performance and get costs under control. Get in touch with us today!