How to Optimize for Same Day Delivery in 3 Easy Steps
Do you have a problem with same-day delivery? Here are some tips for evaluating and improving your supply chain.
Amazon’s Prime service has changed the way we think about online shopping. When it was first introduced in 2005, Amazon inadvertently started a new trend — convenience.
With the growing demand for faster shipping and a competitive market, retailers are under pressure to provide fast delivery or risk losing customers. Click To Tweet
For example, Amazon Prime subscribers can now expect two-day deliveries thanks to their cutting-edge technology investment cutting-edge invest.
As Walmart and Amazon compete for consumers, they are investing in their supply chain to provide faster shipping options. For example, by the end of 2019, Walmart’s next-day delivery service will be available to 75% of Americans; on the other hand, Amazon is set out a plan that, if successful, would reduce its two-day Prime free shipping program into one day with $800 million allocated.
This recent “shipping war” with Amazon has changed customer expectations for delivery. According to Deloitte, only 42% of US online shoppers consider 3-4 day shipping as fast, and 89% believe 1-2 days is considered “fast,” which is down three percent from two years ago. This trend shows that even one-day shipping can be slow if you think about it.
I will have difficulty competing with more prominent brands if I can’t offer same-day delivery. For my business to grow, 57% of DTC brand leaders surveyed said they would need profitability to deliver goods on the same day.
Warehouse same-day delivery can be difficult for smaller retailers that don’t have the same resources like Amazon and Walmart. This article will explain how to optimize your supply chain to still offer this service without breaking down under pressure.
“The biggest reason why TKEES is implementing a multi-warehouse framework is to provide a higher level of speed and service to our customers. While same-day shipping is the standard set by Amazon, we want to get to a point where we can fulfill orders within one or two hours after an order is placed. That level of service would be unparalleled, and in certain metro areas, it is possible to do this with little operational risk.” – Daniel Abramov, CDO, TKEES. Find more insights in our latest report – Here & Now: A Guide for the Modern D2C Brand.
In our latest report, we explore the world of D2C brands and how they have been affected by changes in technology.
The Effects of Same Day Delivery on the Supply Chain
Retailers are becoming more and more competitive, with the newest trend being same-day delivery. Consumers can now order items online to be delivered within 24 hours, thanks to services like Amazon Prime or Next Day Delivery by Walmart. Surveys show that 80% of consumers want this option.
While customers are attracted to speedy delivery times, it’s not just the acquisition that benefits retailers. Tiered pricing options can increase profit margins for same-day and next-day deliveries.
Customers are willing to pay more for fast delivery so that companies can charge a premium on this service. Businesses use data collected from price tests to find the optimum balance of cost and speed.
But, retailers are burdened by the process of providing this convenience.
- When distribution centers are understaffed, there is a higher risk of errors or incorrect shipments because the employees quickly process orders.
- The increased number of shipments also means that the rate of returns will increase. This is a problem because it puts more pressure on fulfillment teams.
- Increased same-day shipping volume means that companies need to hire more staff. Even if they automate the process, it takes time for employees to learn how to use this new technology.
- many things need to be taken into account when restructuring warehouses. The first is the shipping zones and should be aligned with carriers for pick-up and delivery times.
There are a lot of consequences to fast shipping. Retailers have been trying to avoid angry customers and potential financial penalties by outsourcing fulfillment services for faster delivery times.
The key to success in this area is finding a trusted third-party logistics provider – by outsourcing some of your transportation needs, you will improve performance and shipping times.
Tips for Optimizing Same Day Delivery and Logistics
The goal of any company’s supply chain is to link production with the sale, distribution, and shipment of a product. The more efficiently you can do this process without spending too much money on warehouse space or having out-of-stock items affects customer satisfaction.
It would be a perfect world if products were sold and shipped as soon as they cleared the factory. But this is unrealistic, so here are some ways to modify your supply chain to meet the demand for same-day shipping.
1. Assess Your Demand
Same-day delivery is an excellent option for customers who need something as soon as possible. However, before you start offering this service to your clients, assess the demand first and ask yourself if people will be asking for same-day shipping often enough that it’s worth taking on all of these extra costs.
Suppose yosurertain that same day delivery is a service your customers need. In that case, there are two options: 1) hiring and training employees to take care of the process themselves or 2) outsourcing fulfillment. Hiring people can be costly because they will also require wages for each package shipped and an efficient supply chain toto maintain customer satisfaction.
- To get the best employees, it is essential to provide them with pay and benefits that they are happy with.
- Safety gear
- Warehouse equipment
- Warehousing space
If you are trying to do same-day shipping for your company, it may be good to partner with third-party providers who have warehouses and resources.
Here are some reasons why you should get help from someone else:
Save time and money
Outsourcing logistics to a third party allows you more time to focus on other aspects of your business that will help it grow. Furthermore, the cost savings from not having an in-house warehouse or hiring additional staff is significant.
Expand your reach
The 3PLs can leverage their network in areas where your company does not have a presence. For cost efficiency, they can also track same-day shipping and route inventory near those regions.
Scalable and flexible
When retailers are faced with the challenge of delivering products to customers, they should consider 3PLs. These companies can meet any storage and transportation needs because they have the flexibility needed in both busy and slow times.
2. Use a Distributed Order Management System
Suppose you want to offer same-day delivery, a centralized system that oversees the entire process. Customers will purchase from various channels across your business, making it essential for an efficient order management solution. Distributed order management provides customers with accurate time information about inventory, orders, and standoff products throughout production and shipment.
A DOM system should have software that prioritizes automation and integrations with other systems. Automation helps companies optimize fulfillment, while integration turns the DOM into a centralized hub for all of your order processing needs.
If you are interested in DOM systems, it is important to look for features such as:
- The Shipping Lab offers shipping providers like UPS, FedEx, and the USPS. It also connects with other companies for freight brokers or Amazon Partnered Shipping.
- A DOM system will select the best fulfillment warehouse and then determine which rates to use based on how much inventory is available. It can also split orders to get a better rate if multiple shipments are sent sends in one shipment.
- One way we use technology to improve our business is by automating inventory replenishment. This means that the system will look at your warehouse and suppliers, anticipate any changes in demand before they happen, and then send you a purchase order for anything it predicts you’ll need.
- Centralized data models can monitor inventory across all channels, allowing companies to make changes without interrupting service. This cloud-based system is an excellent optionupdatingpdate their systems quickly.
- The system is accessed through the cloud, which allows for a distributed workforce and greater mobility.
Skubana is a software platform that provides the foundation for companies to create logistics infrastructure capable of fulfilling orders on-demand.
Skubana, a logistics c is a logistics company thatagencye for demand forecasting and rates to help save customers money.
The Same Day Delivery Challenges of Supply Chain Management
To avoid logistical nightmares, it is essential to consider some questions when offering same-day delivery.
- How close are your warehouses to the customer’s delivery zones?
- If you are running a warehouse, do your shelves have the right products?
- Are your products in enough different places that they can be delivered to customers the same day?
- How do you know when to reorder products?
- Same day delivery is costing you money.
- How will you change your infrastructure to ensure that all the product is delivered on time?
If you want to know what your future customers will order, the best thing is to predict in advance and prepare for their needs. For example, if they need a specific product on Christmas Day or New Year’s Eve, then make sure that enough people are available who can work during those times.
How to Prepare for Same Day Delivery
Planning for same-day delivery can be difficult, but these steps will help you to succeed:
Study past consumer habits
It is essential to know what your customers order and how they like their orders delivered. This will allow you to create a custom package that best suits them.
Keeping track of your inventory can help you figure out what items to always have in stock. It would help if you also kept tabs on the shipping history for any sudden changes, indicating a growing demand or seasonality among customers.
The supply and demand forecast can help a company plan for future work.
Get third-party help
Logistics providers are a common way for e-commerce companies to outsource their shipping. It can be expensive, but it will help your business scale in the long run and you’ll have more time on your hands.
I learned that I needed to ensure the third-party logistics provider was reputable. In my opinion, the company had to be able to meet all of our needs for shipping goods.
It is essential to keep them updated on their work status when managing a team. This can be done through email or by giving your distribution management system access.
If you’re looking to cut down on costs, consider the added expense of faster delivery. Though this may be desirable for customer support or ensuring up-to-date inventory, it will cost more than standard shipping.
Despite a 46% increase in shipping costs for Amazon, implementing automation and outsourcing fulfillment can help you save money.
Resources on Same Day Shipping and Supply Chain Integrations
Logistics and supply are two very different things. Logistics refers to the shipment, warehousing, and transport of a product from raw materials up to finis products, w. In contrast, the supply chain has a more complex meaning as it includes those contributors who help manufacture a product – from the beginning stages until it’s ready for shipping.
Companies that want to offer same-day shipping need to make sure they integrate logistics into their supply chain. Click To Tweet
It doesn’t matter if you use a 3PL for order fulfillment; it is still your responsibility as the company’s owner-manager to ensure everything goes smoothly and satisfies customers.
Before you work with any third-party partners, such as those who provide logistics and manufacturing services, it is essential to do your research. For example, make sure that they will not steal or use your data for their own purposes before signing a contract.
You can learn more about the Skubana platform and its competitors by reading reviews on G2, GetApp, or Capterra.
Big brands are at a disadvantage when it comes to the competition with Amazon and Walmart. This is because these two companies have mastered fast shipping, which puts pressure on other retailers who can’t keep up.
Many third-party logistics providers can help you meet your supply chain needs. Make sure to find the ones who will work with what you have and won’t disrupt your business operations.