Improve the last mile

Studies show that the final link in a product’s journey can make up 30% to 50% of the total cost.

Today’s supply chains don’t end once the product is created. Instead, companies manage the product life cycle through customer delivery, and the last mile — from carrier to doorstep — is increasingly important.

First, it’s one of the most expensive parts of your supply chain. Studies show that the final mile in a product’s journey can make up 41% of the total supply chain cost (View source). Receiving the product is also a significant component of the customer experience.

So how can your company transform the last mile from cost center to a competitive differentiator? The secret is innovating your transportation and delivery management processes with technology.

A new era of delivery

The demand for consumer-friendly delivery services has profoundly affected the entire supply chain. New delivery options impact everything from the location of warehouses to the use of robotics. For instance, to shorten last mile-delivery distances, many companies are moving toward micro-fulfillment centers — placing smaller distribution centers in more places that store fewer products but increased quantities of those frequently ordered products.

To keep costs down, more companies also are using innovative technology that can help optimize transportation routes to deliver goods faster and more efficiently. Data and analytics, available in the cloud-based supply chain management platforms, can also help create more efficient last-mile performance.

Technology for tomorrow

This shift is even upending how established shipping companies such as UPS and FedEx operate. These companies are looking at creating new business models that rely on independent delivery merchants, rather than employees, to go that last mile.

Already, companies like Uber and Grubhub are tapping networks of independent gig workers to deliver everything from food to merchandise. Down the road, you can expect to see autonomous vehicles, drones, and robotic delivery playing a role in this new paradigm.

Along the way, consumers want to know where their product is in its journey. Thanks to technologies ranging from GPS to Internet of Things (IoT) sensors to smart doorbells, consumers can now track their orders over the last mile and even watch the final inches.