Demand for same day and even one-hour delivery is rising. Tim Fawkes explains how manufacturers could make it happen
Online retailer Amazon has thrown down the logistics gauntlet to a whole range of industries with its new one hour delivery service for Prime customers. Announced earlier this year, the service is being phased in across parts of London and is expected to include all of the capital and some UK cities by the end of this year.
Whilst it remains to be seen how sustainable the service will be, there is a strong commercial reason behind its introduction. By offering the quickest delivery service around, Amazon hopes to sign up more Prime users (who currently pay an annual subscription of £79). This will enable the company to increase its market share and maintain its assault on high street retail.
Raising the bar in transport management
Whatever your feelings about Amazon as an organisation, there’s no denying the increasing demand amongst consumers for ‘immediate service’ – which the company has recognised and acted upon. Amazon’s actions also have significant implications for the manufacturing industry as a whole, raising the bar even higher in transport services – and customer expectation.
So, is it possible for manufacturers to meet the one-hour delivery challenge in the near future? Many manufacturing supply chains are complex with supplies coming from different cities, countries or even continents, often involving tier 1, 2 and 3 suppliers. Manufacturing may involve a multi stage, timeconsuming process and when complete, finished products may need to be shipped to warehouses, customers and end users across a range of geographically diverse locations. The whole chain involves a complicated set of processes involving planning, purchasing and distribution – all of which can be difficult to predict with accuracy.
What’s certain is that demand for same day (and quicker) delivery service is on the rise. Whilst a one hour delivery service may be untenable for certain products and processes for various reasons (product range, shelf life etc) there is increasing pressure on the manufacturers to provide a more dynamic service, with a wider variety of options and quicker turnaround of orders.
Meeting the demands of 2015 and beyond
Despite encouraging figures in the UK over the past two to three years, it’s important to remember that the manufacturing industry as a whole is still recovering from seven years of market stagnation following the last recession when investment levels were been low and the focus was largely on staying in business. This means that some of the legacy logistics systems put in place by manufacturers in the 1990s and 2000s are now fundamentally out of date and unable to deliver the flexibility required in 2015 and beyond.
The bottom line is, no matter how great your product is, if your logistics processes are sluggish and in need of modernisation, companies will find it difficult to meet demand – as well as retaining and winning business. Often logistics is the main service element experienced by the end client. Ultimately, manufacturers need to introduce more dynamic systems to facilitate demand planning, supply management, distribution and sustainability.
How technology can help
The main reason that Amazon and other organisations have been able to reduce delivery time so drastically is due to the fantastic advances in technology that we have experienced over the past decade. The newest mobile technology offers increased visibility and control of the transport element, enabling companies to better forecast and dynamically change their transport plan to meet the demands of a changing manufacturing plan.
A dynamic multi-carrier transport solution is better equipped to cope with different volume demands and changes in requirements. Integrated transport management systems (TMS) that are independent of carriers can also ensure that the manufacturer has better controls in place to manage the transport aspects of all carriers.
Smart phone tracking apps are some of the newest, most affordable and accessible systems on the market. They can track the location of all consignments through transport management systems, generating instant real time information for supplier, carrier and customer. The resulting improved system based forecasting can then be used to provide suppliers and the transport management system with enough information to plan in advance of requirement.
Furthermore, with webbased visuals for suppliers, carriers and manufacturers available via web portals, there is no longer a need for complex systems installations and hardware on all parties’ systems. These web portals can be used to communicate demand, provide live tracking visibility, provide confirmation of delivery and POD, manage carrier payments and provide data to feed into forecasting tools to predict future demand.
From robots to self-driving cars, many things which seemed unlikely a decade ago are now increasingly viable. And so it is with the one-hour delivery. It’s true that manufacturers and their suppliers will need to find a way of measuring and managing processes to meet demands for increasing speed. However, the technology exists to make it happen – which means that it is only a matter of time before one-hour delivery becomes a reality.
Tim Fawkes is Managing Director of 3T Logistics and has over 20 years’ experience in the logistics industry. 3T Logistics combines systems solutions and transport expertise with the express purpose of reducing clients’ transport costs – whilst improving service. Formed in 2000 from a background in 3rd party and 4th party logistics, 3T offers a range of products and services to suit all clients’ needs: from those seeking lesser levels of support, through to organisations looking to completely outsource their transport management department.