E-COMMERCE Reliability and control The Covid-19 pandemic emphasised the value of meeting service-level key performance indicators (KPIs) such as on-time deliveries and first-time delivery success. Covid-19 represented a reliability test for delivery networks: could their capacity and cost structures withstand such peaks? • On-time delivery You can no longer talk vaguely about “shipping in three to five business days”. As you design your last-mile delivery strategy, you need to align your network design with achievable on-time delivery targets. That’s the only way to consistently meet customer expectations. • First-time delivery success The faster you move into e-commerce, the more important it is for you to minimise your delivery quality defects – customer-reported damages, missing packages, incorrect items, or incorrect delivery locations. Such defects not only disappoint customers but are also exceptionally costly. They typically result in customer service contacts, promotions, reverse logistics, or loss of future business. To meet rising expectations and minimise your cost-to-serve, you must succeed in first-time delivery. • Experimentation to flex During the Covid-19 crisis, large players experimented with ways to flex their capacity, expanded their ability to deliver a wide variety of products at hyper-speed, and learned how to reprioritise deliveries. Most of their solutions used crowdsourcing, some existing in-house and others coming from third-party transportation providers. • Diversification to reduce risk However, when you depend solely on a crowdsourced last-mile delivery solution, you increase operational risk; you should also seek to diversify your volumes across third-party transportation providers. It all boils down to cost per package Large players keep pursuing faster delivery options, which makes it tempting to assume that all categories and product segments must be delivered within two days, or faster. But if you use this as a blanket strategy, your costs will soar. Stop chasing this prescribed strategy; instead, perform a needs-based segmentation across your products (eg groceries, apparel, furniture) and customers (eg metro/rural, subscriber). ___ __ During the Covid-19 crisis, large players experimented with ways to flex their capacity, expanded their ability to deliver a wide variety of products at hyperspeed, and learned how to reprioritise deliveries. Most of their solutions used crowdsourcing, some existing in-house and others coming from third-party transportation providers. Flexibility and resilience If you have to respond to an unpredicted large-scale event by retroactively remodelling your last-mile network, that’s costly. Instead, you can ask upfront about how network flexibility and resilience could control unexpected costs. • Large and responsive supply base The biggest benefit of crowdsourced delivery solutions is that a large and responsive supply base can flexibly respond to spikes in demand while minimising costs during lulls. Different segments of your product-customer portfolio have different delivery needs (eg one-two hours for urban groceries, same-day for urban apparel, five days for rural furniture). Pay particular attention to the segments requiring two-day, same-day or ultra-fast delivery speeds, because the implications of increasing your delivery footprint vary. A well-executed needsbased segmentation can reduce last-mile costs by 20-30% while improving service where it counts by 10-20% and identifying the right carrier and technology partners for execution. 32 | www.opportunityonline.co.za
A BETTER B-BBEE SOLUTION FOR ALL IT’S A BALANCING ACT OF MAXIMISING THE OUTCOMES OF B-BBEE REQUIREMENTS WHILE REDUCING THE COST IMPACT AND PROVIDING INCREASED VALUE TO STAKEHOLDERS. Over the past decade, we have perfected a sustainable and compliant solution. Increased B-BBEE levels Through Preferential Procurement, Skills Development and Socio-Economic Development Reduced financial impact Through savings on skills development spend No additional administration A 51% black-owned, Level 2 B-BBEE and SAQA Accredited organisation, Atvance Academy is creating a better South Africa, one learner at a time. Partner with us to reduce youth unemployment while gaining business growth. Contact us today to be a part of the change. +27 (0)10 786 0223 academy@atvance.co.za www.atvance-academy.co.za
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