[This is a repost from a piece originally published by our friends at Routific.]
The food and beverage space has seen some drastic changes with the pandemic. Dine-in has forced some restaurants to close and others to pivot to online delivery until dine-in can come back. Some businesses have moved away from their brick-and-mortar locations for the first time, opting instead for online alternatives.
Home delivery has become the norm and consumers are linking their sentiment toward your company to the delivery experience you provide. But if home delivery (also commonly referred to as last mile delivery) is new to you, how do you know if you’re doing it well?
According to a 2020 McKinsey Global Survey, “companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years”. This is particularly true for businesses that make deliveries to homes.
After chatting with our friends at Bottle — an all in one ordering and backend platform for local makers — we decided to look at how businesses piece together great delivery experiences for their customers. How do you level up your home delivery, especially if you’ve never scaled this part of your business before? Well, that’s what we’re here to help you with.
In this article, we’ll be breaking down a few things:
- A brief explanation of how last mile delivery works
- A list of last mile delivery best practices for your small business
- Exploring how to optimize your team’s last mile delivery with order management systems like Bottle
Let's get started.
How does last mile delivery work?
Let's start from the beginning.
Last mile delivery is the act of getting a product from the closest hub or warehouse to its final destination, which includes both businesses and private homes. Typically, this is an enterprise problem, tackled by large companies with a large fleet of delivery vehicles (and a large budget, too).
But with the rise in demand for home delivery and democratization of software, owners and operators of small businesses are able to not just tackle this traditionally enterprise problem, but do so profitably — particularly in the food and beverage space.
So here are some best practices for your business to follow to get the best results.
Last mile delivery best practices
A good delivery experience is about more than just planning a route. If that were the case, everyone would be good at delivering goods to the consumer’s doorstep. But the companies that do delivery well are seeing their revenue grow and more satisfied customers.
1) Plan out every step of your fulfillment process
Keeping your customers happy starts with proper planning. Everything from the way you receive orders, to the way your warehouse is set up, to the way your routes are planned out and dispatched, play a role in how efficiently you’re able to deliver packages to customers.
Having customers receive their packages when you promised will keep your customer satisfaction ratings high. An important step towards that goal is to make sure you don’t have any bottlenecks in your fulfillment process. The best companies have a process that allows them to receive orders and prepare them for delivery in a fast and efficient way.
One example is to lay out your packages in the order they will be loaded into your delivery vehicle, according to your planned routes. So, if you are visiting points A, B, and C — in that order — make sure that the delivery for Point A is closest to the door when packing, since your driver will be accessing it first. By doing this, your driver will always have the next package on the delivery route most accessible to them in the truck. This saves your drivers from having to waste time sifting through a handful of orders while on the road, trying to find the right one.
This is where using a system like Bottle comes in handy, to improve efficiency. Instead of doing painful things like calculating order totals, putting together packing lists or reorganizing packages, you can let an order management system take care of it for you.
Another example to help you fulfill orders faster is to print shipping labels after you’ve planned your routes. Doing this will ensure that the labels come out in the right sequence.
Planning deliveries efficiently saves money on time, fuel, and driver salaries.
2) Using route optimization to improve efficiency
As part of a smaller business, your team is always mindful of the bottom line. That’s why it’s important to lower costs wherever possible. One of the easiest ways for home delivery companies to cut costs is to stop driving extra miles. These extra miles often lead to more fuel consumption and delays in final delivery.
By using route planning software, you can ensure that your drivers are taking the most direct route possible to save on fuel and time.
A report released by Mapillary uncovered nearly $6 billion in costs associated with driving extra miles and wasted time alone. Beyond miles and time, inaccurate mapping and routing can contribute to missing delivery times. The report estimates that $2.5 billion is spent on wasted salary and $611 million in extra miles due to map issues alone.
And the time savings is felt even before your drivers hit the road. Manually planning routes with pen and paper, physical maps or online tools like Google Maps, can take a long time. Especially if you have multiple drivers and plan new routes every day.
Routing tools will help avoid human error in terms of finding the most appropriate route and can take into account factors such as traffic, road work, vehicle size, and more.
And while not every route planning software is made equally, we have no doubt that you’ll be able to find the right fit using this guide.
3) Spec vehicles according to your business needs to save money
Depending on the size of your delivery operation, you should consider finding the most efficient vehicles that fit your delivery needs. Finding the right vehicles can help you reduce fuel costs and the time it takes for your drivers to finish their routes.
The last thing you want to do is spend more money on larger, unneeded vehicles. It can result in wasted space and more fuel expenses. Imagine investing in a large refrigerated truck. It’s great and it gives you room to grow — but think about whether or not you are currently using all of that space. If the answer is no, you can probably use something smaller to get the job done for now.
Larger delivery vehicles also have the potential to waste a bit more time on the road because of the detours they have to take to fit under bridges, through narrow streets, or finding parking.
It’s important to note that the opposite case is true as well. If your vehicles are too small for your current operation, it forces drivers to make pit stops back at the warehouse to reload before completing all their deliveries. This wastes fuel and time.
These are headaches you can avoid if you spec your vehicles according to your delivery needs.
4) Train drivers to be more efficient
Consider training your drivers to be a bit more eco-conscious with their driving. This can include reducing or limiting idling time, limiting driving speed, and working to stay on a schedule.
Some tangible ways to put these changes into effect are to provide incentives for drivers with the lowest miles per gallon, with the safest driving records, or the most accurate deliveries during a specific time frame like a quarter.
Keeping your drivers happy with efficient driving practices can increase driver morale and can deliver huge results to your bottom line.
5) Manage the process from start to finish
Some companies let third parties handle their home deliveries. It can take a lot off of your plate, so it makes sense. But it can also present some holes and blind spots for you and your business.
For example, when a third party is managing your deliveries, you don’t have visibility into where your products are, or when they will reach the customers’ doorstep once they leave your depot. This means that if a customer is upset about a missing or late order, they’ll be calling you — and you won’t have any answers for them. That’s frustrating for everyone.
Consider taking full control of your last-mile delivery needs, from beginning to end. Doing this will allow you to weed out inefficiencies and make sure that someone who cares about your business is handling this expensive process.
6) Use technology to improve communication with drivers and customers
The best home delivery companies communicate with their drivers and their customers.
Maintaining good communication with your drivers can help to alleviate any problems they may face on a route. If there are disputes or miscommunication about delivery details, having a line of communication with the dispatcher is important. It lets your drivers know that they are not alone and that they have support.
Maintaining good communication with your customers can keep them happy and reduce the phone calls asking where their orders are. This is where customer notifications come in handy.
Customer notifications have been a game changer for Mindful Meals LA. Samir Hamawe, founder of the gourmet-style meal prep service, uses customer notifications to build strong relationships with his customers.
“As soon as I dispatch my routes, my customers get a notification letting them know a time window for delivery. They love it,” Hamawe continued. “Now they can plan the rest of their day, knowing exactly when I’ll be arriving at their doorstep.”
With Routific, Mindful Meals LA also has the ability to communicate proof of delivery.
“Freshly prepped meals have a shelf life, which is why we drop each order off in insulated bags. If the customer can’t be home during the delivery, we leave the order at their doorstep and take a picture to cover our bases.”
Regardless of the scenario, route planning and delivery management technology is helpful to keep your home delivery business operating at peak efficiency.
How do I optimize my last mile delivery?
What algorithm is used for last mile delivery?
Without getting too technical, route planning software exists to solve what we call the Vehicle Routing Problem (VRP) — being able to plan and optimize routes based on time or distance, while taking into consideration various constraints. It gets complicated pretty quickly, which is why we use computers and algorithms to solve the VRP and optimize our last mile delivery.
But not all algorithms are made the same. Some algorithms take a long time to process, but can give you a very good result. While other algorithms process quickly, but give sub-optimal solutions. It really depends on what matters most for your business.
The important take-away here is that route planning software is essential when it comes to optimizing your last mile delivery. Without it, you might find yourself wasting a lot of time, and experiencing a lot of headaches along the way.
“Just ask yourself: What is taking up most of your time?” continued Hamawe, when asked about tips he would give to other home delivery companies just starting out. “Find a way to automate those processes and use that time to grow your business in other areas. That’s what having route planning software opens up for me.”
Route planning software and order management systems
Before orders can be delivered, order management systems should be in place to help your operation move efficiently.
You could manually take orders, pack orders, and plan deliveries, but that’s not a sustainable practice if you want to scale your business and make more profit. Make it easier for your team and your customers. Provide your customers with an easy-to-use web-based platform where they can buy products, customize their delivery or pick-up options, and pay for their order effortlessly.
Order management systems can typically handle the point-of-sale and customer-facing side of things. When a customer orders from your store, these systems pull those orders together with bits of information that are useful for your team.
When you have an order management system and a route optimization system working together, you can save your business a lot of time and money. Each tool solves an important part of the equation: order management systems give your customers a smooth ordering experience, and give you an organized fulfillment system. Route planning tools improve your overall delivery experience with speed and efficiency. That means you have more time to focus on other aspects of your business.
Mindful Meals LA uses Bottle to manage their orders and Routific to manage their optimized delivery routes. Together, they make his operation run smoothly, especially because sending data from Bottle to Routific is so easy.
“Orders come in until Friday evening, which we’ve set as a cut-off, and then we are able to export all of the orders from Bottle into a .CSV file. We just upload the customer information and addresses into Routific, and Routific builds our routes.”
On Saturday morning, the team takes the order information from Bottle and preps each meal, getting each one packed and ready to go for the next day. On Sunday, the team hits the ground with planned delivery routes from Routific. This process is then repeated weekly.
Having Routific and Bottle work together speeds up the process and gives Hamawe more time to focus on growing his business.
“When people think ‘meal-prep’, they don’t necessarily think of gourmet meals. We want to change that by growing our business and delivering to more people,” Hamawe continued. “Now I can focus on doing just that, knowing that Bottle and Routific automate a lot of the stuff that was taking up my time before.”
If you’re looking to put these best practices into action, then using route planning software to optimize your routes is a necessary step. The good news is that Routific is free to try for 7 days. Start your trial and see if you can make some time and cost saving improvements to your last-mile home delivery.