Thanks to cloud telephony solutions, third party logistics companies worldwide have experienced an impressive increase in operational efficiency and at the same time have been able to drive down operational costs.
Closer to home, here in India, the industry of third party logistics (3PL) has also encountered a similar, swift pace of growth. Industry experts predict that by 2019, the 3PL industry in India will easily gross over 48, 000 crores in revenue.
Such businesses pretty much go by the statement of ‘Time = Money’! This implies that the entire 3PL industry is high on competition and low on margins. Therefore, improving operational efficiency is an absolute essentiality for such businesses to stay afloat and sustainable.
In this article, we shall discuss how Cloud telephony and other cloud based technologies can help deliver efficient logistics. But first, let’s first get an idea about what was going on in the 3PL industry before the start of the business implementation of cloud telephony solutions.
In the past, and a few old-school logistics companies still use the archaic method involving pen and paper to keep track of all order deliveries (sign-off deliveries). The delivery agent, after completing all of their day’s work, updates the order status summary, which is then collated and forwarded to all other stakeholders.
Some logistics companies have left this archaic ‘pen and paper’ method and embraced future technologies by equipping their delivery personnel with custom apps. The delivery personnel then need to use any internet connected device, such as a smartphone or a tablet with the custom app installed to complete their deliveries. However, this method has only replaced the pen and paper with a modern technological solution.
This modern solution might sound and seem better, it still doesn’t address the common operational issues (mentioned below) faced by the third party logistic companies.
Dispute Resolution Issues
Supposedly, if a customer logs a complaint where the delivery agent never showed up on the address. In such a case, the company delivering the commodity or merchandise so not have any concrete operational strategy or policy to figure out what went wrong. Apart from, that, even in cases of misplaced or wrong deliveries, the companies usually need 24 to 48 hours to figure out exactly what went wrong, after which they initiate the necessary corrective measures. Such issues are due to lack of immediate information retrieval, which further creates more inefficiencies down the supply chain.
Inconsistent Internet Connectivity
As we discussed earlier that delivery personnel nowadays use a custom delivery app on a smartphone or tablet. Well for the custom app to work, a stable, high-speed internet connection is a prerequisite. But in India, internet connectivity is sketchy, to say the least, even in Tier 1 cities. In Tier 2 and Tier 3 cities, the chances of finding a dependable internet connection are even slimmer. The lack of proper internet connection makes the custom app inefficient most of the times, which in turn also makes the entire logistics process relying on the custom app to become even more inefficient.
Manual Data Updating Errors
Undoubtedly, logistics is a game with little room for errors. There are two major issues with data updating when it comes to logistics. Firstly, there are no standardized incentives for delivery personnel to see through the entire data updating process, in the proper manner. Second, there is no strategy in place to track complaints or delivery issues while the delivery agents are out in the field delivering packages.
These are only but the common challenges faced by 3PLs nowadays. Upon further research, we found that the most critical challenges faced by 3PLs are order delivery status clarity, lack of communication between the customer and delivery personnel, which leads to high reimbursement costs and in worse cases, increase in COD orders returns.
How Cloud Telephony Promotes Efficient Logistics
We are very well aware of the numerous basic business advantages of Cloud based technologies. In the case of the logistics industry, Cloud telephony solutions allow real-time order tracking, without having to rely on inconsistent internet connectivity. It allows 3PL companies to properly manage their inventory, across all their associated supply chains and also helps speed up issue resolution processes to a great extent.
For example, the delivery agent can simply place a call which has an automated IVR, which helps the agent to processes and updates the order status, right at the time of delivery. This system can be further integrated with the company’s CRM system, which ensures that the order status is updated on all endpoints in real-time.
Equipped with such a simple Cloud telephony based solution, 3PL businesses have described a significant 18% increase in on-time deliveries. And thanks to the real-time order status updates, customers also experience 5% more inventory visibility.
Another benefit of using Cloud telephony solutions for 3PLs is that all interactions between the delivery agent and the customer to where the package needs to be delivered are all recorded. This way such businesses can develop and deploy strategic processes which help avoid failed or wrong deliveries, due to lack of proper communication.
Another consequential business advantage that 3PLs have experienced with Cloud telephony solutions is decreased customer care complaints, delivery failure issues, along with a substantial increase in staff behavior of up to 15%.
According to logistics companies, a major factor for losses in the industry is due to failure to deliver COD orders. This is because, most of the times, the customer is not present at the delivery address, to accept and pay for such orders and sometimes the customer might even deny accepting and paying for such an order. To mitigate this issue, the delivery agents started to call the customer before departing for their address with the package. This ‘confirmation before delivery’ strategy was able to mitigate the issue but resulted in the additional expenditure in the form of call charge reimbursement to every delivery agent.
But, thanks to Cloud telephony solutions, 3PLs implementing Cloud telephony solutions can eliminate the need to reimburse their delivery agents for work related calls to the customers, using as many extensions as needed.
Furthermore, it allows the logistics companies to update the order statuses in real-time and grants them the ability to review and optimize the efficiency of other entire processes like distribution, supply chain, procurement, payroll, etc. According to many leading logistics companies, Cloud telephony solutions like these are able to reduce losses incurred due to COD orders by 30%.
It makes great sense to spend time and other resources to improve operational efficiency, especially in the case of labor intensive logistics companies. Cloud telephony assisted logistics companies to deploy precisely tailored communication and operational procedures, which helps save money as well as time, which is pretty much the same thing.