The Future is in Precision-Guided Logistics
More and more companies are offering their customers delivery options. CoolBlue offers "Ordered today, delivered tonight" service, for example. In the construction sector, it's: "Ordered today, delivered to the site between 7 and 9 tomorrow morning" – unless you'd rather pick up your package at the pick-up point yourself tonight. Agreed is agreed.
Customers expect precision-guided logistics. That demands a lot from the logistics processes, planning and IT.
Just before Christmas, panic struck in my home. Our oven stopped working, so we quickly ordered a new one. I made an appointment with the suppliers for the oven to be delivered at a specific time, two days before Christmas. Unfortunately, something went wrong. The minutes ticked by...until I simply had to leave the house. Without track-and-trace information I had no way of knowing when the oven would arrive. Even the supplier had no idea about where the shipment was.
We ended up spending Christmas without an oven. When I got home later, I found the familiar “You were not at home” notification on my doormat. It said I would need to call for a new appointment. There was no way it could still be delivered before Christmas; by then it was much too busy.
They had reached my house 10 minutes too late. Why hadn't they just called to say they would be late? It was three days after Christmas by the time the oven was delivered. It looked great, but what a waste, all those needless extra kilometers, costs and stress.
With my online groceries it was an entirely different story. Not only did I get another complete delivery, but half an hour before they showed up I got a text message with the estimated time of arrival, accurate to within a quarter of an hour. So evidently that's also possible.
Your Uber is arriving now
Only a couple of years ago, the blogs were full of articles about “slowing down” and “taking it easy” in logistics. Well, you can forget that! These days, web stores are offering us more and more delivery options."Ordered today, delivered tonight," "Ordered today, delivered tomorrow morning between 8 and 10," or "I want to be able to pick up my package from the Kiala Pick Up Point sometime after noon." It all has to be even faster and even more precise. And: agreed is agreed. After all, we're paying for it.
Customers – both consumers and business clients – are getting more and more used to receiving better service. My Uber taxi sends me a message three minutes before arrival: "Your Uber is arriving now." That's not only handy for the customer, but also for the driver, who won’t need to wait for me. You can follow the Uber driver's route and see the arrival time on your smartphone. That's handy.
How long until carriers will start offering a service like that? Just a simple message with "We'll be there in 15 minutes." So then if you are not at home, you can just click on "I'd prefer some other time" or "I'd prefer a different address." Or: "Deliver it to my neighbors at number 68," who will then receive a text message that they can use to identify themselves.
Customers expect precision-guided logistics. That requires collaborating with the best partners: both in the warehousing and in the transport. Those partners will need to coordinate their scheduling seamlessly. And that scheduling won't concern the coming days or hours; it will be about the coming minutes. Then, if things unexpectedly go wrong, both the customer and the sender will need to be informed of that, so they can quickly come up with a solution together.
Unless reliable, up-to-date data is shared within the fulfillment chain, the planners will be blind. Precision-guided logistics requires planners who are essentially clairvoyant. Prevention is better than cure. Logistics information needs to acquire predictive value.
It’s no easy task to collect up-to-date, real time information from a complex distribution network in order to be able to make the right planning decisions. Fortunately, thanks to the Internet of Things, the IT sector is facilitating better and better information processing capacity. We’ll be hearing a lot more about this in Amsterdam on Feb 17-18 during the Logistics CIO Forum.
That can only work if all partners have a perfect data quality. But that is often lacking. Moreover, that information only becomes valuable if it matches the needs of the receiver. And, doesn't the customer really just want convenience? Make sure it will be good in one go; on time, in full, no error and no contact.
A lot still needs to happen before we really get a grip on that precision-guided logistics.