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Consistent performance leads to competitive advantage

Consistent performance leads to competitive advantage

In any high-volume, efficiency dependent business, inconsistency is disastrous – impacting not only profit margin but also customer experience and brand value. Yet for the logistics industry that is by its very nature dependent upon a fast changing cast of temporary workers, with different expertise, experience, even language skills, achieving consistent processes and performance has, to date, been impossible.

But as the industry gears up for the next peak season and responds to the demands from retailers and customers alike for a better service, including hourly delivery slots, it is clear these inconsistencies need to be eradicated, however inexperienced the personnel.

Pól Sweeney, managing director Europe & CTO, Airclic, explains the role scanning and automated route planning can play in creating a highly consistent business operation despite the transient nature of the workforce.

Human Fallibility

"Over the past decade, the logistics industry has worked hard to streamline processes and improve accuracy of package sorting and delivery. However, despite the use of automated label scanning within sortation centres, organisations are still reliant on human intervention – from checking postcodes before transfer to local service depots, to drivers responsible for determining the best route for parcel delivery.  

"While any level of human intervention will undoubtedly result in a degree of inconsistency in performance, for an industry that depends upon a high proportion of temporary agency workers the divergence in productivity and results can be significant.

"Combine this with a working environment where adequate lighting can be difficult to achieve and the simple task of verifying postcodes on a label becomes a challenge, especially when volumes are high in the peak periods of the year. The end result is a package meant for Enfield is now on the road to Edinburgh. A simple error which is compounded by the fact that nobody realises it has occurred until the package arrives in Edinburgh many hours later.

"Recovering the error is costly in time and in reputation, particularly if the package is perishable or has a short shelf-life. In this scenario when the package eventually makes it to the correct destination it often has been spoilt or is in a state well below the quality that the sender had intended it to be received in.

"This adds further damage to the reputation of the retailer supplying the product – not only is it late (potentially missing Mother’s Day or another key day) but the condition of the product delivers nowhere near the positive experience expected by either sender or recipient.

"When high volume intensive processes rely on humans in this way it is inevitable that there will be errors. Without the use of systematic verification these errors continue; by their nature they are slow to be identified and difficult to quantify and analyse. It is, for example, a challenge to correlate that the five mis-sorted packages found in Edinburgh today were in fact due to a new temporary agent working a trailer door, 14 hours ago in your southern sortation hub, not spotting the postcode began ‘EN’ rather than ‘EH’.

"A simple mistake and five packages out of the hundreds handled by the agent on their first shift is probably a low percentage, but the stakes for on-line retailers are high and so is the impact on reputations of an error.
However clearly defined the processes, humans are fallible – especially under pressure. Yet in a highly competitive market with huge price pressure, this inconsistency clearly creates an unacceptable degree of business fragility and fundamentally undermines essential attempts to improve the quality of the business offer."

Big Ask

"By continuing to rely on manual decision-making at these key stages of the process, companies cannot avoid inconsistent performance. How can an agency worker, potentially new to the UK, confidently check postcodes and addresses? Whilst in theory the task is simple, when faced with a high volume of information to process every minute, errors will inevitably creep in.

"Typically, mis-sort rates are notoriously difficult to quantify but can run at around 20 per 8,000 parcels – with higher levels for non-standard items such as perishables/delicates or large items such as bikes, which often have to be manually processed at every stage. The impact of such errors can be significant: mis-sorts that arrive at the wrong local delivery centre have to be sent back to the central sorting depot and processed again – by which time an edible fruit arrangement will have spoilt and the critical delivery date (for wedding, birthday or Mother’s Day) has been missed.

"Furthermore, the divergence in performance at the final delivery stage of the process is even higher due to the industry’s requirement for each driver to manually map out his or her own route every morning. Expecting the driver to make an assessment of the best way to make upwards of 100 different deliveries to multiple locations and then attempt to match his preferred delivery path with the arrival time expectations of the end consumer is a big ask.

"Even assuming the driver has good local knowledge, the entire process is time consuming, inefficient, and prone to error. And for those with no local knowledge the process is nigh on impossible - hence experienced drivers can deliver up to three times the number of packages of a new temporary staff member."

Consistent Performance

"This level of inconsistency not only affects productivity and profitability - especially at peak periods – but also undermines the quality of customer experience. The question surely has to be: are there ways of automating aspects of these processes to minimise inconsistencies and improve overall performance and productivity?
Rather than manually checking each postcode, why not use scanning to auto-verify the destination?

"A tone-based solution – that pings for correct and bleeps for incorrect, for example – is easily understood by any worker, irrespective of language skills and quickly adopted. In trials such solutions drive the mis-sort rate down to near zero, making a significant improvement in performance. Critically, rates are consistent across (and despite) frequent changes in personnel.

"Taking the onus away from the driver to plan to the delivery route can also transform operations, enabling inexperienced drivers to perform far better by reducing the reliance on local knowledge whilst improving driver confidence and productivity. Drivers can be provided with the route information when they arrive – or receive it via a mobile App before leaving home – and, as a result, the time spent loading up is typically reduced by 40% or more."
 
Business Confidence

"The skills and expertise of long-standing employees will always be incredibly valuable for any business. But as employment levels rise, logistics companies are finding it ever harder to attain and maintain a consistent workforce, even before the huge additional influx in temporary staff required to manage the Christmas delivery peak. Indeed the Freight Transport Association has recently warned customers to expect Christmas delays due to the lack of experienced drivers.

"By introducing tools to automate critical processes such as route planning, organisations can overcome the risks associated with less skilled and transient staff and create a far more consistent and high performing business.

"It is only by achieving high levels of consistency throughout every stage of the process that organisations will attain the confidence required to introduce the added value services increasingly demanded by the market – from location tracking to guaranteed shorter delivery slots."

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