Last-mile delivery constraints are increasingly affecting logistics providers. Peter Ristevski, Dassault Systemes Consultant reveals how the challene of diverse delivery locations, autonomous vehicles and future obstructions can be solved.
E-commerce has disrupted the global supply chain and transformed industrial transportation networks. To meet demand, companies are looking for a faster and more efficient way to ship goods to consumers.
Whilst consumers are met with their expectations by retailers, the surge in online shopping has put pressure on logistics operations, particularly for the last mile, the final and crucial step in delivery from the distribution centre or warehouse facility to the consumer.
So how can companies get goods to consumers faster and more efficiently when road freight carriers capacity is limited and potentially costly? Peter Ristevski, Industry Process Consultant at Dassault Systemes, says planning is key in times of disruption. COVID-19 has put disruption at the forefront, uncovering vulnerabilities in supply chains, affecting the capacity to fulfil last-mile solutions.
Future of last-mile
At the time of the interview with MHD, Peter says two delivery drivers had approached his home this morning from the same courier service. “The orders I had probably came from the same DC and shows the emphasis on urgency in the logistics sphere right now to get orders dispatched fast,” he says.
According to global research by a US-based research company, the autonomous last-mile delivery market, including both aerial and ground-based vehicles, is expected to grow at a rapid rate in the next seven years. However, an increase across all e-commerce markets in B2B, B2C and C2C has already rapidly increased the need for urban freight and put a spotlight on the challenges around the time sensitivity of freight deliveries.
“Covid has definitely magnified the era of the new consumer. This demands a greater fulfilment service and flexible delivery options for the consumer,” Peter says. Recent research from Roy Morgan has found that nearly one third of Australians are working from home, which has changed the landscape for ‘traditional’ delivery methods as more people explore adaptable options for their goods and services.
“People can receive deliveries at any point of time and are available around the clock. Retailers have had to shift their options to meet their customers’ expectations,” Peter says. On top of that, is the time sensitivity to delivery dispatched from the warehouse to the home. Orders are tracked and any form of delay, no matter how small, leaves a sour taste in the consumer’s mouth. These forms of difficulties presented in today’s market are challenging the operational abilities of logistics providers for retail and retailers.
The future of last-mile ensuring an array of delivery options are available, but also sustainable. Peter says in order to cope with the future of last-mile solutions and face the challenges, retailers must begin with a better plan, adjust and ultimately be more agile across the supply chain landscape. “Retailers need a plan that is flexible as the current diversity of deliveries. The timing of the consumer and the ever-changing environment of the consumer requirements need to be accounted for in an adjustable manner,” Peter says.
E-commerce relies heavily on the trucking industry in the form of long-haul transport, then regional and urban transfers, and then finally the last mile, which is usually completed with vans and app-based delivery services. The boom of e-commerce and with it, distribution and last-mile logistics, has been noticeably affected by transport.
An increase in the number of road freight carriers is leading to greater traffic congestion and costly delays in the delivery of goods to end users. This is why e-commerce home delivery planning is essential in the advancement of technology for managing complex supply chains that operate across various modes of transportation.
There are plenty of companies who offer planning as part of their solution, Peter says that focus isn’t entirely fixated as it should be. With world record breaking DELMIA Quintiq, Dassault Systemes is able to provide advanced home delivery planning from the first to the last mile.
Peter says it’s a planning solution that matches the detail of your home delivery operation using a Virtual Twin Experience. “Instead of a black box optimizer full of obsolete data from an original implementation, the solution uses optimization that continuously considers all constraints of the business and requirements of the store or consumer such as, pickup and delivery time windows, driver rest times, employee agreements, skills and qualifications etc. for any planning horizon including the day of operation. This now unlocks ways for planners to make faster and better decisions to execute plans collaboratively with constant feedback from drivers out on the road through a driver supported app,” he says.
Further, the route planning is based on advanced mapping data with high resolution and global coverage. This allows for a single control tower connected to transactional systems (TMS, WMS, ERP etc.) for the efficient flow of enterprise information between planning and fulfilment.
“We’ve found that black box solutions don’t cater well for what happens next in the world of disruption. Our planning solution matches store delivery, home delivery for consumers and models your network through the information that is absorbed and streamlined through the system,” Peter says.
Retailers are able to ship products to the consumer, to a delivery point of their choosing, in a time slot of their choosing, while keeping them updated and informed. Peter says the solutions enables last-mile logistics of the future with flexible fulfilment models and dynamic delivery models for savings in actual transport costs. “The technology allows you to have that decision-making support at all times with real time KPI’s to show.”
Inbound & Outbound Optimization
As e-commerce continues to skyrocket, retailers will see all types of properties to be converted to last-mile distribution and delivery stations where goods can make that final trip to the front door. Solution providers like Dassault Systemes are constantly evaluating how to streamline delivery from wherever point A is to the end consumer, whether that be a DC, retail store or click-and-collect.
To compress costs and connect this growing network of facilities, Dassault Systemes DELMIA Quintiq solution for Inbound and Outbound Optimization provides fast and on-demand decision support for planners and drivers regardless of the planning horizon.
Peter says this advanced planning optimizes store replenishment delivers, making efficient use of logistics resources. “The delivery plan is optimised to minimise the number of trips needed and to make use of return journeys to make collections from suppliers,” he says.
Planners use real time KPI-focused reporting tools along with automated capabilities to implement the ideal delivery strategy that assist’s lowering costs of transports and order fulfilment. “Essentially, it’s a key tool that enables flow optimisation between suppliers and DC’s and DCs to stores with retail special rules and load types whilst working within the operational constraints of the supply chain,” Peter says.
Globally, major organisations have implemented this solution to transform their well-established delivery network. “In Europe, a major global logistics provider efficiently supplies their evolving network and they reduce the distance in delivery time by 8 per cent. They increased their driver retention and the reduction in delivery time came from optimizing the driver’s route and making it as efficient as possible,” Peter says.
“Back home in Australia, the solution takes real responsibility in ensuring fast decision support for planning purposes. Understanding that it’s possible to better re-allocate orders and use planning beyond logistics is a gamechanger for the Australian retail landscape.”