Peak Season 2018 - Part 2
Now is the Time to Prepare for Peak Season...2018
Finding actionable insight from Big Data in Parcel Shipping, Part 2 of 3-part series.
NOTE: Parts 1 and 3 focus on Table Stakes and Looking Forward, respectively.
In Part 1 (Table Stakes) we offered predictions to help you manage the things you face every day as you prepare for 2018 peak season volumes, carrier trends, the need for advance rate shopping, and dealing with extreme weather conditions.
In Part 2, we dive into taking action from the insights that bubble up through parcel shipping data. If you're like most organizations, getting big answers from big data - to increase customer satisfaction, loyalty, and operational efficiency - still presents a challenge. We believe there are three areas where the analysis of big data can make a significant difference in how you manage your operation.
|I.||Provide transparency into the complete order lifecycle.||Customers want status alerts and visibility throughout their order's journey (from you vs the carrier).|
|II.||Derive actionable, management insight from data.||You can't take management action from data if it isn't centralized, accessible, and properly structured to reveal the insight you need to make good decisions.|
|III.||Leverage data to improve edge case management.||Many of you have plans to improve outlier, or edge case processes in concert with 3rd party vendors or intercompany shipping (perhaps submitted by a consulting firm).|
I. PROVIDE TRANSPARENCY INTO THE COMPLETE ORDER LIFECYCLE
Ten years ago, rapid consumer adoption of Amazon Prime raised the bar for everyone as the demand for free shipping and faster delivery began to escalate. While we've all worked hard to meet demands for "free and fast," the bar keeps rising as the economy become even more hyper-connected. As a result, customers expect complete transparency of their order's journey, via proactive communications and alerts from you, that respond to the question that just keeps getting louder: "tell me, any time I want, where my order is and when I will receive it."
Why customers are demanding more. Linking the customer's order status to your carrier's site met expectations for years. Now, the modern buyer finds this approach archaic because:
- The required customer effort is too high. While it may only take 60 seconds, the process of logging into your site to search for an order, then tracking down the link to your carrier represents an effort most customers find intolerable (see Customer Effort Score, CES).
- Customers want a unified experience from a single source. The experience offered by your carrier is different than the one you've worked hard to design (and, requiring buyers to navigate more than one site adds to customer effort). Customers want one source of information, and they expect YOU to provide it.
- Customers expect inbound alerts. Buyers want continuous status alerts that clearly communicate where their order is and when they can expect to receive it.
|Customer Effort Score (CES)|
|Organizations that reduce customer effort create customers that are more loyal, more profitable and more satisfied according to in-depth research from the Customer Contact Council, a division of the Corporate Executive Board.
Learn more about how CES is proving to be a superior measure of performance here.
Unpacking customer demands. How do you reduce these demands into manageable pieces to meet customer expectations?
Notify customers of major milestones
- Customers want to know when their order left your facility, when it arrived in their city, when it went out for delivery, and when it was delivered.
- During this journey, buyers want to be alerted about any delays. The challenge lies in satisfying these questions with the right number of communications since customers don't like excessive alerts, rather the right alerts.
- Yet, some customers will want more detail than others. And, your alert strategy can vary by product, order type (for example, an anniversary gift versus a monthly subscription for coffee beans).
Meet expectations for single source communications
- Customers didn't order from FedEx, they ordered from you.
- In fact, customers don't really care which carrier is delivering their order as long as its delivered within their expectations.
- Hence, a text from the carrier only confuses buyers as they ask, "Which order is FedEx texting me about?"
Make use of multiple communication channels
- This will vary by customer; some want SMS, others prefer email.
- Some customers have a preference for going to your site to check their order status within the context of their larger order history.
- Some customers will express a preference for Facebook Messenger.
Create a customer communications plan
- Deploying a modern customer delivery alert system requires you collect real-time status data from all your carriers - which you can translate and store - then filter by situations worthy of an alert (based upon customer-defined preferences, rules you create, or specific products for example, like a gift versus a regular subscription order).
- Next, programmatically create the message that is consistent with your brand voice (e.g., witty versus sophisticated) in customer's preferred channel (text, email, site, or FB Messenger).
- Rest assured, this is not as daunting as it may sound. With focused planning, you can implement your plan by next peak season.
Improve operations with added-value you derive from status data
- Sending customer communications to alert them or order status is important. But, you'll soon find that this data has even more value to help you understand and identify trends and areas of opportunity.
- For example, which carriers or regions have OTD or damage issues? Which ship methods are trending toward problem spots?
- Mining this data against your shipping system data will reveal key insights you can use for a whole range of process improvements.
II. DERIVE ACTIONABLE MANAGEMENT INSIGHT FROM DATA
Just say no to Excel. We are far beyond managing complex businesses with multiple versions of spreadsheets over email. If you're like many organizations, you spend a huge amount of time merging and manipulating information from WMS, ERP, OMS, TMS, and even your carriers to create spreadsheets that don't reveal anything actionable to you, or your boss. We believe all that data is worthless if it cannot be reduced into management actions you can take to be more competitive.
What data do you actually need? We suggest you bring three data sources into one location for analysis: shipping system, carrier status, and carrier invoice data. This single step will make huge strides in helping you achieve greater transparency in your shipping performance. While you could certainly add more, scoping your initiative to these three areas gets you on your way to achieving business advantage from data insights (as opposed to misguided attempts to boil the ocean).
Keep in mind: data exists to help business people make better, more informed decisions. Hence, the first question you should answer: who will use this data? For example:
- Operations people need to solve immediate, pressing issues such as "which parcels are delayed, which have shipped but have no carrier records, or how many open trailers need to be addressed?"
- Middle managers need visibility into problem areas to improve operational performance such as volume trends by DC, trends occurring in OTD by carrier, percent shipments that are delayed (against historical performance), and damaged parcel rate trends.
- Senior executives want a highly visual, intuitive dashboard of major Key Performance Indicators (KPIs) such as time-to-ship, volumes by carriers, OTD and damage percent, and cost per pound trends. They may also want ad hoc data such as peak surcharges to date.
- Analysts, accounting, and finance professionals need reports to support audit carrier invoices; they might also want to conduct analysis to find savings opportunities or to reveal shipping cost allocation across cost center or incentive program status.
There is no such thing as the perfectly completed system. Avoid thinking this initiative has an end date. You're never really finished when it comes to data and analytics. Build the right set of reports that present big answers for key stakeholders, and they will inevitably ask for more (a key signal that you've achieved success).
III. LEVERAGE DATA TO IMPROVE EDGE CASE MANAGEMENT
Improvement opportunities you might be overlooking. Many companies we talk to invest heavily in the Direct-to-Consumer shipping processes fulfilled via Distribution or Fulfillment Centers while overlooking what we call edge cases: fulfillment processes outside the DTC via a DC/FC process (which includes Ship From Store, Ship To Store, Drop Ship, Third Party Vendors, and intercompany shipments). These processes may pale in comparison to mainline DTC volumes, but they may be costing you money with shipping costs that can be avoided. Overlooking ways to improve edge cases may also be diluting customer satisfaction.
A hidden problem. Are you, your drop shippers, and your third-party vendors using a common transportation management system? If not, is your system populated with the shipping data of others (or do you rely on the carrier's reports and invoices for the data)? If you answered "no" to either question, you are missing an opportunity to create a consolidated view of your shipping status and audit capability. Consider intercompany shipping: do you use your TMS for those transactions, or the carrier's system?
Centralized shipping in a distributed environment. As omnichannel shipping adds to the overall expansion of the shipping ecosystem, it is more important than ever to centralize the shipping process, systems, and data for those shipping parties outside your DCs and FCs. This is particularly true when you shop outside the corporate walls for third party and drop ship vendors. If you are counting on these outside parties to leverage your account (based upon rules you send them) you could be exposing your organization to unnecessary costs and potential customer satisfaction issues.
The three data projects we've highlighted can create value for your organization by next peak season - if you start now. While you may not complete your larger initiative by next peak season, you will definitely begin to pave the way to building higher value for your organization through data.
Next up: Part 3: Looking Forward. Throughout the industry, you hear a lot of noise about what to expect "someday." Let's talk about what to do about it now.