Each spring some of the world’s fastest drivers compete for one of the most coveted spots in sports: the starting pole position at the Indianapolis 500. 

Since pole position is awarded to the driver with the fastest qualifying time, it would be easy to assume that he or she is a shoe-in for first place. Yet fewer than 25 percent of these honorees have gone on to win.  

There’s a similar phenomenon taking place in the world of transportation. 

Although companies place considerable emphasis on the start of their supply chains, it’s often how they move and manage materials closer to the finish line that determines whether they actually win or lose customer loyalty. 

Case in point: According to a survey conducted by the Warehouse Education and Research Council several years ago, customers are willing to accept no more than two negative service experiences before deciding to take their business elsewhere. And in a December 2008 report, Forrester Research indicated that the quality of a customer experience can mean as much as a $184 million difference in revenue for large retailers.

In other words, customer service functions such as last-mile delivery count for more than you might think. 

To some people, the mere mention of last-mile may seem like a blast from the past. It’s been missing from headlines since the early 2000s, when dotcom fever reached its peak. And it’s been conspicuously absent from many corporate agendas for just as long. 

However, it’s been anything but dormant. Government statistics say that online sales are nearly 30 times higher than they were in 1999, and many of these sales ultimately involve a home, business or job site delivery. Plus the value of the large-product home delivery market alone has been estimated at $8 billion.

While these figures admittedly could decline as a result of the ongoing economic downturn, there’s every reason to believe that last-mile delivery should continue to be an important part of the retailing equation. After all, it’s highly likely that price-sensitive consumers could seek out Internet sales channels more often as they search for the best deals on products. And no matter how bad things get, people will always purchase certain necessities such as major household appliances that are too large to transport without professional assistance.  

There’s also every reason to believe that last-mile should continue to be the area of the supply chain where there’s the greatest degree of inefficiency—and hence the greatest opportunity to make improvements and carve out a competitive advantage. 

Timing is everything

Consider, for example, the matter of delivery timing. 

Few consumers enjoy being tied down to their homes for half a day while waiting for a new sofa, big-screen television or treadmill to arrive—especially not if they’ve had to leave work or cancel an important appointment to receive it.

Companies that can shorten—and consistently arrive within—their delivery windows could win huge service kudos and more repeat business from their customers.

Knowledge is power

The same holds true of companies that are willing to invest in true end-to-end shipment visibility. 

At the moment, many retailers track shipments only until the time they’re loaded onto a delivery truck, leaving a 50- to 100-mile, multi-hour blind spot while a product makes its way to a customer for delivery. This may be fine if all deliveries on a truck happen like clockwork. However, it can pose an immediate problem if a truck winds up being delayed and a customer calls looking for an explanation or revised ETA.

By committing to a higher level of last-mile connectivity, companies can save their employees a considerable amount of troubleshooting time and credibility.  

Help the customer get things right

There is much to be gained in the area of customer education, too.

In a traditional distribution scenario, where one business is delivering to another, both parties are highly aware that a smooth hand-off is a two-way street, and recipients are often as delivery-savvy as shippers. 

By contrast, receiving shipments is usually not a common occurrence for consumers, which is why many fail to hold up their end of the last-mile delivery efficiency equation. 

They may, for example, neglect to reserve service elevators if they live in a high-rise; forget to measure things like doorways and hallways to make sure the item they’ve purchased can fit through; or engage in one of the most common lapses of all—failing to clear the delivery path of debris before the truck arrives. 

All of these oversights can either extend the length of a delivery stop—setting up a domino effect of late deliveries and disgruntled customers—or compromise a product delivery altogether.  But thankfully, most can be nipped in the bud simply by supplying a detailed delivery brochure at the time of sale or providing similar directions via e-mail after a delivery is scheduled. 

Stop wasted effort

Speaking of productive stop rate, no discussion of last-mile delivery inefficiency would be complete without a more thorough look at this critical industry metric.

Loosely defined, a productive stop rate consists of the percentage of last-mile shipments that companies are able to deliver on their first try. It’s one of the primary yardsticks by which last-mile efficiency is measured, because redeliveries are some of the most costly—and wasteful—activities throughout the supply chain. And with a current average of just 90 percent, it’s safe to say shippers are missing the mark.

Fortunately it’s possible to boost this figure by as much as 6 percent without breaking the bank.

By increasing their rate of pre-delivery communications companies can create dramatic improvements in the percentage of customers who are at home and ready to receive their shipments the first time around.

For example, if a company typically makes a single phone call phone call to customers in order to schedule a delivery appointment, it could easily migrate to a two-call advance notice or a pre-call/e-mail combination with just a small increase in cost. Ditto with companies that are already engaged in two forms of advance notification; the third time may be—as they say—the charm, especially if that third time takes place less than an hour before a truck is scheduled to arrive. In fact, this same-day communication has proven to be such an effective way to reduce not-at-homes that it’s become standard operating procedure throughout our national network. 

Anything but the last word

One caveat before closing: These suggestions by no means represent the full spectrum of last-mile inefficiency. 

Nor are they meant to imply that companies should exclusively focus on last-mile to the exclusion of other global supply chain activities.   

In today’s hotly competitive business world, there’s no doubt that first efforts and first impressions count for a lot. However, so do last ones.

Companies that recognize this could find themselves on the inside track to far greater savings and customer retention. And companies that don’t might just find themselves “lapped” by competitors. wt



Will O’Shea is chief sales and marketing for 3PD, Inc. (www.3pd.com), one of North America’s largest focused providers of last-mile delivery and logistics.