With delivery costs and customer service expectations both rising, real-time telematics and mobile data solutions will become a core investment for 21st century retailers. In the first of a new series, telematics editor Sharon Clancy reports on how it has become a fundamental building block in many logistics operations.
Telematics is one of those words where context is everything. For Governments, it describes a wide range of activities from real-time traffic management to providing arrival time information at bus stops. For logistics companies, however, telematics has become a broad description describing the automatic capture of data from vehicles and mobile devices.
Transporting goods from suppliers and ports into distribution centres, onward to stores and, for some items, finally to customers’ homes is one of the highest costs for retailers, both for traditional bricks-and-mortar operations and for online offerings. The complexity of the operation is one reason UK retailers were early adopters of telematics solutions such as route optimisation, real-time journey management software, driver and vehicle performance monitoring, location data and electronic signature capture and why they now have some of the most efficient and admired delivery operations in Europe.
However, the changing landscape of the UK retail scene is placing further demands on operations and retailers look set to become even more reliant on telematics and mobile data to deliver the level of intelligence about the business required for future performance efficiencies.
Telematics can deliver solutions to help meet the twin challenges of maintaining high levels of customer service while simultaneously controlling delivery costs. A single piece of mobile data can deliver intelligence about several aspects of the operation: electronic signature capture, for example, eliminates paperwork and automates invoicing, but is also a useful tool in demonstrating KPI compliance and, by confirming real-time location, it enables CRM staff to be proactive in alerting customers about any delays to deliveries.
Telematics can help identify trends and patterns across all elements of the operation and discover where the bottlenecks and inefficiencies are, delivering insights into productivity, business process efficiencies, costs and customer service levels.
Route analysis, for example, can drive future efficiencies. Comparing a planned delivery schedule with what actually occurred helps identify where and why delays in the schedule happen and what actions can be taken. Managing working time and drivers’ hours in real-time maximises utilisation of another precious resource and also helps manage legal compliance.
Indeed, so much mobile data is available, the challenge for logistics and IT professionals is now about how best to use it effectively to drive future performance efficiencies: a lot of data may well be sitting in data silos, used by one part of the organisation but inaccessible to another.
There is growing recognition that data needs to be integrated and readily accessible so that staff have a complete overview of operations in real-time. Starting with job costing and schedule planning, it also means incorporating historic data such as journey times and integrating real-time data such as drivers’ hours, fuel issue data, navigation and two-way messaging.
Deeper real-time data integration may be desirable but there are hurdles to overcome. One is that legacy systems and software may not be able to deliver data in real-time due to outdated programming languages or incompatible processes.
Cloud-based mobile platforms are one solution, especially when it comes to sharing data with third-party contractors. Cloud-based solutions are an affordable way for smaller companies to access mobile data solutions and they can help close the delivery data loop. However, IT professionals report concerns about levels of data security on some remote servers.
Telematics plays a key role in today’s customer-centric world, delivering real-time data to manage tight delivery windows and provide updates on delivery progress. A morning delivery time between 8am and 1pm has become unacceptable to many consumers, spoilt by the game-changing one-hour delivery windows offered for grocery home deliveries.
Tight windows can place extra cost on the business, changing the cost parameters for a delivery. It’s another reason retailers are constantly analysing their performance – to evaluate, for example, warehouse locations and regions where shared-user might be a more cost-effective option, and where to drop.
One growing trend for multi-site retail fleets is a shift towards central planning. This helps maximise asset utilisation across all sites and can be used to optimise home deliveries by combining orders taken in-store or online. It also helps to manage the high stock levels necessary to meet the demand for immediate purchase or delivery – yet another cost to be managed.
Another delivery option is drop-shipments, where goods ordered in store are delivered direct from the manufacturer to the customer rather than via the retailer. Another is to use a third-party warehouse, run by a home delivery specialist who liaises with the customer over final delivery. All of these potential solutions require in-depth data about comparable delivery and operational costs, some of which analysis of telematics data can provide.
Many of these approaches require the delivery partner to share the same commitment to delivering excellent customer service. Online retailers often contract out the delivery operation, but directing the customer to the delivery company website to track progress can be risky: it’s the retailer’s reputation that is at stake, not hat of the carrier.
Sharing real-time information and trusting those partners to interact with demanding customers will be key for online retailers. Keeping delivery contractors in the information can be expensive and impractical, but modern, low-cost, technology is making it easier and more affordable. For example, contractors can be given online access to a delivery schedule which they download using a smartphone app. The app is then used to capture vital delivery information such as time, signature and any discrepancies about the delivery. The data is as granular as if the retailer itself captured all the information.
Supply chain visibility
Retailers now have global supply chains which in turn calls for greater collaboration, more mobile data collection and common platforms for sharing that data. If there is a manufacturing fault requiring a mass recall, integrated supply chains with shared data are essential. The secure supply chain demanded for certain products – pharmaceuticals, cosmetics and tobacco, for example – is particularly reliant on data sharing. Delays in identifying exactly which batch of products are faulty may not be so time-critical if that fault is emissions levels on a Volkswagen car, but speed is essential if it is a case of contaminated food.
This feature first appeared in the fourth print edition of eDelivery Magazine (EDM04). Visit our subscription page for more details on how to get your copy.