Is Your Parcel Technology Prepared for the Future? Part II
Key elements to evaluate whether your platform is enabling or hindering your ability to respond to the ever-increasing magnitude of change [a three-part series].
We are back with the second installment of our three-part series in which we dive into the key elements crucial to understanding if your platform is enabling or hindering your ability to respond to the ever-increasing magnitude of change in the shipping industry. In Part I, we discussed how to increase cost savings and customer satisfaction through expanding your carrier services and agility, understanding DIM weight, and exploring freight consolidation. In part two, we will discuss how to collect the right data and how to utilize it effectively.
Part II: Data Collection & Utilization
You can directly impact your business through the manner in which you collect data and your ability to distribute that data. Data collection/distribution can be one of the easiest and most often overlooked tools that can help improve overall performance.
Collect and distribute
Data collection should start upstream, prior to receiving your freight: establish advanced shipping notifications. “This may seem like a no-brainer, but many distribution centers still have not implemented electronically transmitted advanced shipping notifications (ASN). Relying on a “regular” shipping & receiving schedule can result in inefficiency throughout the distribution center. Delays happen, disruption happens- and it causes deviation from the “regular” schedule. The resulting issues start with improper staffing at the receiving dock and ripple through the warehouse. However, by leveraging electronic advanced shipping notifications within the purchase order and inventory management functions, labor can be planned with more certainty. Order fulfillment and transportation activities can be adjusted to ensure proper service time requirements are met, and transport modes are optimized to keep costs down.” – 11 Warehouse and Distribution Center Best Practices for Your Supply Chain, Legacy Supply Chain Services
Additionally, every time an outbound shipment is processed, there are many points in its life cycle which crucial data can be collected, stored, and analyzed to help improve both upstream and downstream flow.
This shipping data can include, but is not limited to, average weight and zone, cost per shipment and cost per pound, service level usage, zone density, actual vs. billable weight, package density, and effective incentives. It can be time consuming to manually track all of these individual cost points in an attempt to save as much money as possible (which is why most shippers believe they are overpaying carriers). As such, you should rely on the appropriate technology to capture this data to ensure you are spending appropriately and finding areas for improvement.
With parcel shipping data in hand, you may find the magnitude of potential areas of improvement to explore intimidating. We suggest that you start with the low-hanging fruit. One example is late deliveries, which account for approximately 80% of any recovery potential according to Jared Fisher via Parcel.
Once you are collecting all the data that you need on your shipments, it is critical to share this data with your organization’s employees across functional areas. (If you keep it to yourself it is difficult to enable change.) The promotion of information visibility company-wide will not only create a sense of urgency and ownership in your staff but according to The Warehouse Management Benchmark Report, Aberdeen Group - “The Best in Class point to an extensively proliferated warehouse visibility infrastructure that allows them to share information throughout their operation and across the company. Another respondent points to visibility as a means to improvement. A senior vice president in supply at a large retailer indicates that ‘faster information access to critical users coupled with extended shipping-receiving hours,’ led to a decrease in cycle times between 11-20%.”
Control the data feed to your customer
Parcel data is not just valuable to your organization, you should also be sharing information with your customers!
Customers always want to see more about their delivery; they love details about where the package is at any given time and when the package is out for delivery. Although UPS, FedEx, and USPS all have tracking options for the customer, they are branded for the carrier – not you. Instead, consider a technology solution that can translate up-to-date tracking data for you to communicate to your customer.
Imagine the time your customers spend tracking their order at FedEx or UPS – wouldn’t you rather them be on your website? Integrate technologies to allow customers to view detailed delivery status at your own website. Keep the thought of your brand fresh in the consumers mind from the time they purchase through every notification along the way to delivery (and possibly even increase the chance of an additional purchase).
One growing customer demand is text message notifications: 66% of consumers prefer to be reached by brands via text messaging over other methods (with some research reporting even higher). Consider taking advantage of additional opportunities to touch your customer and communicate in your brand’s voice.
Finally, don’t forget, once increased tracking/visibility is in place, it can add value to your returns processing. Customers want the fastest refund (or reship) possible; the sooner you can confirm an item is on the way back to you, the sooner you can respond. (Stay tuned for “Part III,” where we explore best practices for your returns processing.)
Knowing what data to collect, and how to collect it may seem like a daunting task of collecting ones and zeros and working with analysts to decipher meaning, but this is a fallacy. When working with the right technology that is both robust and flexible, the ability to create specialized reports to fit your precise needs is an easy task. Using this data will provide you with increased visibility on shipments, help improve your overall supply chain, and provide crucial customer data to help improve the brand – in turn creating longevity in the company. As W. Edwards Deming said, “Without data, you’re just another person with an opinion.”
We realize this piece is very high-level, and if you’d like to drill down on any of our observations, please reach out to us with questions or comments. We also welcome opportunities to deliberate or dispute our insights and recommendations – no conversation is off limits. You are an expert and we'd love to speak with you.