What is Supply Chain Management?
Supply Chain Management (SCM) involves the coordination and optimization of all activities involved in the creation and delivery of goods and services. For a delivery business it involves everything from storage of inventory to transportation to execution of the delivery.
In this blog we’ll have a look at the 3 components of SCM for a delivery business and understand the importance of SCM.
Components of supply chain management for a delivery business:
- Inventory management
A key component of supply chain management for delivery business is – inventory management. This involves ensuring that the right packages are at the right place at the right time. Inventory management can be a complex process and requires forecasting the demand.
Your business will have to plan the storage infrastructure accordingly. Excess storage space and not enough inventory will lead to unnecessary rental costs. Whereas, not having enough storage for when the inventory level increases, for example in holiday season, can lead to inefficiencies. It is important to constantly review inventory levels to avoid unwanted expenses.
One way to improve inventory management is through the use of technology. Modern inventory management software can help businesses track inventory levels, forecast demand, and automate the ordering process. This can reduce the risk of overstocking or understocking.
- Transportation logistics
The second element of effective supply chain management for delivery businesses is transportation logistics. This involves managing the movement of goods from the warehouse to the doorstep of the customer. Transportation logistics can be complex, especially for businesses that operate in multiple regions or countries. However, it can be streamlined through the use of route optimization software.
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Route optimization helps in planning the most efficient route for your deliveries. While planning the route, the software takes into account factors like stop type (pickup/delivery), stop priority, stop duration, delivery time window, vehicle capacity and driver availability. You can also track the live location of your delivery drivers via the dashboard and take action in case of any unexpected delays.
Route optimization enables faster deliveries to the customer leading to customer satisfaction. It also saves you time & costs and improves the bottom line of the business.
Transportation logistics also involves reverse logistics which means picking up the package back from the customer’s address in case of returns. The return process should be easy and convenient for the customer.
- Customer Service
The last leg of the supply chain for a delivery business involves finally delivering the package to the end customer. This component of SCM ensures that customers receive their deliveries on time and in good condition. The packaging of the product should be durable enough to keep the products safe while in transit.
Communicating with the customers and keeping them in loop regarding their delivery helps in improving customer experience. You can share the tracking link with the customer along with a customized message via the route planner itself.
Providing exceptional customer service can be a differentiating factor from the competition and will build customer loyalty.
Importance of supply chain management:
- Improves efficiency
Supply chain management streamlines the various phases of a delivery business. It enables a smooth flow of operations from managing the inventory to final delivery of the package. It improves the efficiency by accurately forecasting the inventory and optimizing the delivery routes.
- Reduces overall costs
Supply chain management helps in controlling the overall costs by ensuring maximum utilization of the available resources. It keeps the costs in check by keeping a tab on the inventory, optimizing the deliveries and embracing technology.
- Improves customer experience
SCM enhances customer satisfaction by enabling faster and on time deliveries. It is necessary for the businesses to keep up with rising customer expectations regarding delivery speed.
- Quality control
SCM keeps a strict check on the quality in terms of the quality of the final package being delivered. It also monitors any delays in the delivery hampering the quality of customer experience.
It is important to have a well oiled supply chain management system for smooth functioning of business operations. By leveraging the latest technology, delivery businesses can stay ahead of the curve and continue to grow in a rapidly evolving industry!