Last-mile delivery management was complex enough during off-season times. Peak demand brings challenges that can shake even the most robust logistics networks. Getting it right means mastering the complexities of last-mile logistics, which involves grappling with numerous entities, varied transportation modes, intricate pathways, and diverse geographical locations.
Today, merely achieving end-to-end visibility is insufficient — the current landscape requires the capacity to execute nimbly. Seamless integration of crucial processes becomes necessary. It fosters an uninterrupted flow of information and enables accurate, swift evaluation of pivotal business decisions.
Despite the unprecedented volume of data generated, accessing and effectively using this information poses challenges for many companies. The absence of suitable technology or processes hinders seamless data integration — and this obstruction limits the automation of new actions in complex systems.
Logistics orchestration helps optimize processes, improve decision-making, and foster collaboration for efficient supply chain management. But getting logistics orchestration right is easier said than done. In the following sections, we discuss what orchestration is and how to use it to come out on top of the next peak season.
What is delivery orchestration, and why does it matter in last-mile logistics?
Logistics delivery orchestration tries to optimize all tasks in the delivery pipeline — from planning to deployment and monitoring. The primary goal is to remove inefficiencies, leading to reduced costs, faster time to market, and enhanced visibility.
Orchestration is also different from automation. Automation targets individual tasks, while orchestration automates numerous simultaneous tasks. It creates a streamlined delivery pipeline for enhanced efficiency. Delivery orchestration coordinates and times independent automated tasks, removing inefficiencies and minimizing human intervention.
The benefits of delivery orchestration are vast. It allows for a fully (or mostly) automated workflow, incorporating planning, testing, database creation, and more into a seamless pipeline. This automation saves time and resources and enforces best practices, ensuring standardized processes. Improved visibility into the delivery pipeline helps pinpoint issues, and overall orchestration accelerates time to market. Delivery orchestration is also not your typical Transport Management System (TMS). It goes beyond enabling precise logistics analysis that unlocks significant savings.
Orchestration tools, such as those offered by DeliverySolutions, effortlessly adapt to any data source, be it complex or flat files.
According to the Capgemini Research Institute, last-mile delivery costs constitute 41% of total logistics supply chain costs. Retailers frequently absorb a significant portion, often providing free delivery to consumers. These are fairly substantial numbers, even during regular days. In peak season, poor last-mile delivery management can easily add to significant losses.
Omnichannel fulfillment: A non-negotiable imperative
Omnichannel fulfillment technologies that leverage BI analytics play a crucial role during peak demand seasons. These tools offer insight into order processing, fulfillment, and delivery routes, enabling businesses to identify and address bottlenecks and inefficiencies.
Analyzing historical data and demand patterns allows companies to anticipate customer needs. This strategic alignment of operations provides a smoother experience during heightened demand. The data-driven approach provided by these technologies is invaluable in optimizing complex processes and enhancing overall efficiency in dynamic, high-demand scenarios.
Orchestration makes last-mile operations easier and lets you use analytics for detailed logistics planning. By running "what-if" scenarios, you can use previous peak-season customer behavior to predict future demand.
Navigating peaks: Addressing last-mile challenges
With peak seasons almost always come missed windows and frustrated customers. But it doesn't have to be. Modern delivery orchestration technologies offer capabilities that were unthinkable just a few years ago. These include same-day delivery, curbside, locker, or in-store pick-up options, and customized post-purchase experiences. These features were restricted to the biggest retail brands out there. However, small and medium businesses can offer similar conveniences thanks to modern cloud automation tools.
The problems of peak season
Predicting demand during peak seasons is a logistical challenge that keeps businesses on their toes. The surge in consumer activity can be both a boon and a bane, with sales soaring but the risk of under or overestimation lurking.
In such volatile times, companies may be uncertain whether they'll meet demand or be left scrambling. All retailers face critical questions during peak season. Do you aggressively push sales, risking potential stockouts? Or do you ease up on marketing, risking insufficient sell-through?
Nowhere was this more visible than in 2022. Most retailers were anticipating greater e-commerce sales, and with good reason. However, surveys showed 94% of shoppers heading out to stores for personal service. Unfortunately, failure to heed emerging trends resulted in disastrous consequences. Another study found that over 17,000 stores closed permanently in the UK during 2022.
The signs are clear. Retailers need to keep up or risk losing sales and their livelihoods. This involves embracing technologies and strategies to transform unpredictability into opportunities for efficient operations and superior customer experiences.
Labor challenges due to increased demand
The post-pandemic retail era continues to grapple with fast resignations. In 2023, 46% of retail employees expressed their intention to leave their jobs. Retail already has the highest turnover rate. High workload during peak seasons also results in higher burnout rates and dissatisfaction, exacerbating the problem.
Since 2019, a shift toward automation and self-service retail is clear. Self-checkout and automated operations reduce the need for a large staff, becoming a permanent trend in retail.
The persistent labor shortage defines the retail landscape. Retailers, however, can proactively prepare by integrating technology. Efficient operations through technology can compensate for the absence of labor, allowing limited staff to enhance in-store customer service and drive sales.
Delivery Service Provider (DSP) unpredictability
Managing high-volume demand requires third and fourth-party logistic services. Since such providers cater to multiple clients, they can easily get overwhelmed during peak seasons. Last-mile challenges, driven by high delivery volumes, lead to slower delivery times. Unpredictable demand surges during promotions strain logistics networks, causing delays. A survey of 8,000 consumers in North America and Europe by Descartes found that 73% faced delivery failures in 2022. A quarter of them also didn't buy from the retailer again.
Unforeseen circumstances can also add fire to such problems. For example, the Red Sea and Panama Canal crises are causing significant delays and inflation. The Houthi attacks in the Red Sea have increased shipping times by several weeks and shipping costs by 250%. This is all besides regular peak-season issues such as adverse weather disruptions, strikes, and critical route closures.
Besides, limited transportation resources during peak seasons also restrict the movement of goods. Sorting facility bottlenecks and holiday closures contribute to additional delays. Broader supply chain disruptions, including manufacturing delays, impact product availability and fulfillment timelines.
Staying nimble helps solve peak-season problems
The uncertainty posed by the problems mentioned above forces critical questions onto retailers. As perplexing as these problems are, delivery orchestration can help ward off the worst of them.
The real-time visibility feature of delivery orchestration provides a comprehensive view of the entire supply chain. All stakeholders can track shipments, anticipate bottlenecks, and proactively address issues as they arise.
Optimized routing to streamline last-mile deliveries also becomes possible with orchestration technologies. The system dynamically adjusts routes based on real-time data, minimizing delivery times and resource usage. This adaptability is crucial during peak demand periods when traditional routing strategies may falter.
Delivery orchestration emerges as a multifaceted solution offering real-time visibility, optimized routing, and dynamic resource allocation. It doesn't just navigate the challenges of peak seasons — it transforms them into opportunities for enhanced customer satisfaction and operational excellence.
How to use logistics orchestration to ace peak demand
Logistics orchestration tries to unify all delivery methods, including same-day, next-day, pick-up, curbside, and delivery lockers. A consolidated interface ensures you have a complete overview of your delivery spectrum.
As we stated, the primary issue in peak seasons is that managers often don’t know if their demand forecast models are accurate. This problem can be solved by making quick, data-driven decisions that need real-time data. Logistics orchestration systems are built to collect data from all corners of your supply chain, digest it, and present valuable insights.
Curated business rules for precision automation
Incorporating orchestration enables business rules to be tailored to logistic necessities. These rules can be specific to the order, package size and weight, times of day, DSPs, or customer addresses, enabling precision automation.
For instance, a retailer can automate the process of prioritizing same-day deliveries for high-demand products or specific customer segments during peak hours. The implementation of smart rules within orchestration adds a layer of strategic decision-making. Businesses can consider factors like provider cost, track record, and availability in real time. Such customization makes sure that resources are allocated efficiently, enhancing operational effectiveness.
Retailers can also prioritize a delivery provider with a proven track record for timely deliveries during peak demand, even if their cost is marginally higher. These smart rules contribute to a nuanced and responsive logistics strategy, ensuring that decisions align with business outcomes and customer expectations.
Dynamic adaptability for varied logistical influences
One of the key strengths of orchestration lies in its dynamic adaptability to diverse supply chain influences. Variables such as the number of parcels, weight of packages, and customer location are seamlessly factored into orchestration decisions.
During peak demand, orchestration anticipates a surge in parcel volumes and dynamically adjusts resources and routes. This proactive approach prevents bottlenecks and delays, ensuring seamless and efficient operations. Here's how it might play out.
Consider a furniture retailer using two 3PL partners to deliver items in a city. Its first delivery partner is assigned to deliver to a specific city block. However, the surge in orders during peak demand overwhelms their capacity. However, the delivery orchestration system identifies that a van belonging to its second 3PL is near the required area and on standby.
The system swiftly recognizes the available delivery agent from partner two and redirects the packages to them while optimizing delivery routes. The delivery orchestration software's capacity to dynamically allocate resources prevents bottlenecks. It also enhances the overall efficiency of the furniture retailer's logistics network.
Exception handling and tailored merchant solutions
Orchestration's role extends beyond routine operations to efficient exception handling. Automation within orchestration provides precision in managing exceptions and issues.
Modern delivery orchestration tools can identify issues, follow rule-based resolutions, and reroute packages as efficiently as possible with little human intervention.
Once an exception is identified, the system automatically alerts relevant stakeholders, such as the customer service team or warehouse managers. These alerts provide real-time notifications about the exception and its impact on the order.
Orchestration may also trigger alternative fulfillment paths. For instance, if a specific product is temporarily out of stock, the system might automatically reroute the order to a different warehouse with available stock or suggest a product comparable to the customer's. Continuous monitoring refines processes for sustained efficiency and customer satisfaction.
DeliverySolutions makes logistics orchestration easier
DeliverySolutions platform enables company-wide orchestration and keeps customers in the loop throughout the process. Our orchestration rules facilitate the automated resolution of carrier issues or exceptions, ensuring minimal disruptions throughout your logistics. Should a carrier encounter problems like a flat tire or car breakdown, our system can seamlessly schedule a new rider to ensure prompt package delivery.
Customers benefit from timely notifications, maintaining transparency regarding any delays or issues. The automation in the process ensures orders progress seamlessly, shielding end consumers from disruptions or handoffs. Ultimately, orchestration is pivotal in swiftly resolving issues and safeguarding the customer experience without compromising operational efficiency.
Delivery Solutions' omnichannel experience products for everything after the sale help enterprise retailers scale with flexible options that boost savings and brand loyalty.
Interested in finding out more? Give us a shout-out. We're here to help.
Topics from this blog: Holiday Shipping Logistics