When it comes to logistics management, there is a huge scope of wastage and errors that have a direct impact on your cost, service level compliance and obviously your customer’s satisfaction.
When it comes to logistics management, there is a huge scope of wastage and errors that have a direct impact on your cost, service level compliance and obviously your customer’s satisfaction.
With so many aspects to handle such as vehicle reporting, order scheduling, vehicle routing, delivery tracking and management, reconciliation, invoicing, etc; continuing to do this manually can lead to serious wastage in terms of time, resource and productivity.
Still majority of the businesses, including large enterprises, still manage their logistics in the conventional pen-paper / spreadsheet way. This is true especially in India, where I have seen enterprises (having turnover of more than US$ 500 M) relying on rudimentary methods to manage their operations.
The following illustration would help you understand how these inefficiencies form a cascading effect on the business performance.
Let’s analyze how an act as simple as manual scheduling and routing of the vehicle can lead to dire results.
Generally, scheduling and routing of the orders are done based on the pin codes where a specific vehicle would be dedicated to serve certain number of pin codes. Now, in this process the load is hardly balanced and this leads to under or over utilization of vehicles almost persistently.
Under-utilization leads to capacity wastage which is a direct impact on cost; whereas, over-utilization leads to missed or delayed deliveries which leads to serious implications on service levels and customer satisfaction.
Simple, our scheduling and routing algorithm creates a cost function on the basis of following constraints -
It fulfills the above constraint to automatically create run-sheet that has the optimized route accommodated in the minimum number of vehicle required to process the load.
Using reverse geo-coding and predictive traffic information, we are able to create more robust routes. This further helps in minimizing failed deliveries (which currently forms major chunk of the operational cost due to several re-attempts) by giving out definite alerts to the customers about their delivery.
Next, let’s take the case of delivery management which currently has little or no operational control and reconciliation which are done via hard papers and require a whole bunch of team and a whole month to sail through.
Currently, once the vehicle is dispatched from the hub they are siloed. Leveraging IOT over vehicles ensures that the hub has full control on them and its deliveries all time. Further, the mobile and cloud based infra transcends the delivery documents (POT, POD, LR) into an electronic format which eliminates dependence on manual accounting as well as significantly curtail the time taken to reconcile (which typically runs in weeks). This not only has a direct cost saving on the cost but also acts as a source for better vendor relationships through early payment cycle.
Though, technology has paved a way to tackle the long drawn problems that is plaguing the businesses; however, we are still scratching on the surface level. As we start foraying into Machine Learning concept and start leveraging Big Data to utilize the insurmountable amount of data coming in from live vehicles and shipments; the dent on the problems would become deeper!
Tech Entrepreneur and a Product Guy.
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