You may not know it, but your eCommerce fulfillment center and last-mile delivery operations are not cost centers. In fact, eCommerce businesses are beginning to recognize logistics and transportation are critical for a delighted customer experience. That is why if any of your shipments have a delivery exception, it is a horrific experience for both your business and your customer. This article highlights for you four tips for using your shipment data to eliminate every delivery exception in your control. This will assure your supply chain is delighting your customers.
1. First, Fully Realize the Impact of Delivery Exceptions on Customer Experience.
Delivery exceptions have a significant impact on customer experience. When a shipment is delayed or lost, it can lead to frustration and dissatisfaction among your customers. This can result in negative reviews, decreased customer loyalty, and lost revenue.
As a rule of thumb, 10 percent of shipments have some type of delivery exception. Now many of these may not actually result in a delivery being late. However, it is delivery exception that causes late shipments and result in disappointed customers.
To bring home to you the horrific impact of delivery exceptions, let’s look at Amazon. The question you need to ask yourself is why did Amazon become everyone’s favorite eCommerce retailer. This includes your customers. Indeed, the main reason that Amazon became the leader in eCommerce was because they focus on eliminating delivery exceptions and achieving high on-time delivery performance.
As evidence of Amazon’s obsession with on-time delivery, let’s look at their Seller Fulfilled Prime (SFP) program. Here Amazon merchants enroll in the SFP program so that they can have the Amazon Prime designation. With this designation they have to meet certain service levels, most notably free 2-day delivery. To do this Amazon monitors these merchants closely. This is because the standard for the SFP program is 99% on-time order fulfillment and 97% on-time delivery. It is safe to assume that this is Amazon’s internal standard as well. Thus if you want to be an eCommerce company that really delights customers, you need to be obsessed with eliminating delivery exceptions.
2. The Need to Measure, Diagnose the Root Cause of a Delivery Exception.
To improve delivery performance and customer experience, it’s important to measure and diagnose the root cause of delivery exceptions. This involves analyzing shipment data to identify patterns and trends that may be contributing to delays or other issues. By understanding the root cause of delivery exceptions, businesses can take targeted actions to address the underlying problems and prevent similar issues from occurring in the future. For a detailed explanation, see SC Tech Insights’ Best Data Analytics Practices for Measuring eCommerce On Time Delivery. This article explores the data analytics of determining a ship date, a delivery date, a promised date, delivery exceptions root cause analysis, and order fulfillment click-to-ship metrics.
Measuring eCommerce On Time Delivery: Instructive Advice To Best Avoid Pointless Mistakes. All eCommerce operations need to ask themselves are they as good or better than Amazon with on-time delivery. Further, do you really know what your on time delivery rate is and is it good or not? Worse, do you know if your on time delivery rate is accurate?
To answer these questions, click here for details on the 9 most common mistakes with measuring on time delivery performance. Also, this article details how to use data analytics to correctly measure on time delivery. Lastly and more importantly, find out how to use on time delivery data to identify the root causes of delivery failure.
3. Every Shipment is a Gold Mine of Data – Here’s Where To Get The Data.
Every shipment contains valuable data that can be used to improve delivery performance and customer experience. However, accessing this data can be a challenge for businesses that do not have the right systems in place. To get access to shipment data, most businesses need to work with transportation carriers and logistics partners. Further unless you rely on a third party partner, you will need to invest in technology solutions that can provide real-time tracking and analytics. So where does this shipping data come from? Well for most of us, it is not all in one system. To list, below are the major data sources for measuring and improving shipping performance.
Shipment Data Sources
Transportation Management System (TMS).
Either a shipper or 3PL partner may have a TMS. Key shipment data in this system would be the ship date, delivered date, and promise date. Additionally, this system may have more details on the shipment order detail, shipment characteristics, shipment status, and delivery exceptions.
Carrier provide shipment data by various means. Specifically, shipment status data can include the carrier’s web site, downloadable files, subscription data like Electronic Data Interchange (EDI) or Application Programming Interfaces (API). Normally, you will need IT staff to establish a subscription or API data interface. Now, this data should include all key shipping events and exceptions. Some carriers are better than others at providing good shipment status. Additionally, usually API and subscription status interfaces provide better data. Also, carrier invoice data is very useful for capturing shipment characteristics like billed weight, zone, service, address corrections, and so on.
Also, there may be other systems that are key for getting shipment data such as ERP, CRM, WMS, order fulfillment systems, eCommerce systems, and even financial systems. These systems can be internal shipper system or 3rd party systems. The warehouse and fulfillment systems will have detail information about the promised delivery date, the ship date, detailed shipment order information. Also, many shippers have a separate financial system or they outsource carrier bill payment to a 3rd party, So these financial systems will normally have all the carrier billing data. In many cases, it is easier to get the shipment financial data from these sources instead of getting a dual feed from the carrier.
For more perspectives on shipment data sources, see Descartes’ Analytics For Improving Carrier and Supplier Performance and CustomerThink’s 5 Ways To Use Shipping Data To Enhance The Customer Experience.
4. Find Out Who Can Help You Eliminate Delivery Exception Problems.
Eliminating delivery exceptions requires a collaborative effort between businesses and their logistics partners. 3PL providers have expertise in managing shipments and can help businesses identify areas for improvement in their supply chain operations. By working together with logistics partners, businesses can implement strategies to prevent delivery exceptions and improve overall delivery performance, leading to better customer experiences and increased revenue.
If you have an IT department, they can work with your transportation carriers to get the data. Worst case, you can pull the data into software like MS Excel. If you have a 3rd party logistics (3PL) company, they should provide you with your shipping data or provide service performance dashboards. Additionally, these 3PLs and eCommerce fulfillment companies should already be proactive in reducing your delivery exceptions. Lastly, there are independent shipping analytics companies that can help you. These companies can consolidate data from various carriers and provide you shipping performance dashboards for you to take action to minimize delivery exceptions.
For more ideas and references on reducing your delivery exceptions, see Bringg’s How To Handle a Delivery Exception For Greater Efficiency and Customer Satisfaction, Getconvey’s Delivery Exceptions: What They Are And How To Handle Them, and Optimoroute’s What the Heck Is a Delivery Exception? (And How to Avoid It). Also, for more on how a shipping data analytics company can help you, see ShipMatrix.
For more from SC Tech Insights, see articles on transportation.
Greetings! As an independent supply chain tech expert with 30+ years of hands-on experience, I take great pleasure in providing actionable insights to logistics leaders. My background includes implementing 100s of innovative solutions using emerging technologies and a data-centric development approach. I have also provided business intelligence (BI) solutions for 1,000s of shippers. For more about me, click here.