What is delivery management? (And how to improve it)

By Indeed Editorial Team

Published 13 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Recently, many factors have increased the relevance of e-commerce and have compelled many businesses to move towards online sales, making delivery traffic more rampant. An efficient overseeing of delivering processes builds customers' loyalty and distinguishes a brand from others. If you're considering expanding a business and improving the post-purchase experience, you could benefit from understanding this management technique. In this article, we discuss what delivery management is, explore a list of eight key KPIs for this concept, how to improve it and its importance.

What is delivery management?

Delivery management involves the organising, administering and deploying of efficient logistics processes that digital tools power, to ensure that goods are properly and efficiently moved from one place to another until it reaches the end customer. With e-commerce, this concept involves overseeing and optimising the last-mile delivery process for shipping customer orders. The person responsible for this role is the delivery manager or director.

Related: Strategies for effective administrative management

Key KPIs to track delivery experience

Here are eight crucial delivery KPI metrics that can improve your delivery experience if properly tracked:

Route efficiency

This is the process of determining routes that are most productive and cost-efficient. Route efficiency involves finding the shortest path between two points. It also covers relevant factors, such as the vehicle capacity, delivery windows, driver schedules, traffic patterns, number of stops possible in the delivery route and even suggests the optimal route for delivery. All these factors facilitate timely deliveries and improve revenue generation for the business.

Fleet productivity

Fleet productivity measures critical metrics like the driver's behaviour, compliance and service hours. It also involves fuel usage, vehicle maintenance and total usage. This measures the entire performance of the fleet, controls the delivery costs and improves the maintenance and efficiency of the fleet.

Identifying delayed deliveries

Accurately identifying delivery delays gives insight into the effectiveness and efficiency of the planned delivery routes. This helps the management to know those routes that prolong the delivery time frames. In most companies, the hardware or mechanical errors encountered during packaging or stock pickup cause these delays.

3PL performance

To prevent the loss of efficiency that normally occurs when companies outsource delivery services to third-party logistics providers (3PLs), it's important that you monitor deliveries. You can monitor the delivery performance using several metrics. These include order accuracy, order time-to-fill, on-time shipping percentage, shipping accuracy and cost per unit shipped.

SLA and OTIF adherence

A service level agreement (SLA) is a bond between a customer and the delivery service provider that defines, in measurable terms, the objectives and key performance indicators the delivery service provider can achieve. The on-time, in-full (OTIF) adherence is a crucial facet of SLAs that businesses need for targeting consistency. With digital delivery administration tools, SLA is more reliable and efficiently monitored as it triggers alerts in case of any inefficiencies.

Related: What is waterfall project management and why is it useful?

Data on POC efficacy

It's crucial to equip your proof of concepts (POC) with measurable data, as it would help you evaluate the success rates of a delivery operation. Relevant KPIs to track your POC include, auto dispatch rates, time on site, orders per driver and on-time delivery. If you use your POC system as planned, the KPIs generated on that data would be accurate. On-time delivery is, therefore, an important KPI to track. This KPI is the ratio of orders that shipped before or on the shipping date.

Estimated time of arrivals

You can generate an estimated time of arrival (ETA) using the route optimisation tools to aid customer and internal communication. To estimate the actual time of arrival, businesses use several reliable parameters to predict the actual time. You can calculate these parameters based on data histories from traffic conditions, road network variables, accidents, unprecedented events or vehicle characteristics.

Customer satisfaction metrics

Customer satisfaction metrics is an important KPI to note, given that it has a significant impact on a delivery business and its profits. Many companies may not collect information on how the customer feels at every stage of their delivery order fulfilment. This means that it's essential to monitor how they carry out the delivery to meet the customer's expectations.

For instance, the 3PL may not provide the customer's experience of the delivery or a delivery partner may not be able to deliver a parcel within the ETA and is unable to communicate this to the customer. The customer may not have the best option about your delivery services and if the management is unaware, this can pose a challenge to the company in the future. Therefore, collecting and collating customers' data is paramount to the success of a delivery business.

Related: What is customer satisfaction?

How to improve your management system for deliveries

Below are a series of steps that you can follow to boost the management system for deliveries in a business:

1. Plan

Every phase of business includes planning. Adequate planning prevents unnecessary stress and hassle when fulfilling deliveries. Therefore, it's important you plan the processing and production of your orders and how to properly assign the deliveries to your team members so they know exactly when and what to deliver. It's also important to have a clear understanding of your plan so that it's easy for everyone to follow it.

2. Set priorities

Setting priorities is an easy way to improve your delivery operations. You can organise and prioritise your order based on the order's importance, specified date of delivery or location. By setting the priority of the orders, you're simply providing the algorithm with the necessary information on what to include in the route optimisation. As new orders arrive, you can then prioritise them according to the parameters you've already established.

3. Stick to your commitments

Businesses that stick to their commitments through their delivery operations tend to be more successful. Customers tend to want transparency and prefer companies that deliver within the promised time windows. Businesses that are accounting for time windows within their route plan can meet their customers' commitments. They're able to do this because their algorithm always assigns the right order to the right resource at the right time. As a result, they tend to have increased accuracy, precision and reliability with their customers.

4. Gather team feedback

A business that improves obtains feedback on the services they've rendered. So, if you're looking to boost your management system for deliveries, it's essential to gather team feedback to facilitate your growth. You can do this by requesting customer and employee feedback. Doing so helps you know what tools you require to aid delivery, what to change and what challenges to overcome.

5. Real-time order tracking

Customers often prefer to know the location of their order as soon as it has shipped. The ability to track orders in real-time is a feature that optimises the management system for deliveries. This transparency benefits both the customers and the delivery companies. It provides customers with the satisfaction that they can track their orders in real-time and for the company employees, it gives them the assurance that they're working to meet the delivery schedule.

6. Reduce paperwork

If you're looking to take charge of your logistics, it's essential you reduce the amount of paperwork as it can slow the pace of your delivery operations. You can easily switch to a digital management system that's capable of documenting and processing your essential documents. Reduced paperwork would also enable you to communicate more efficiently with SMS, email or messaging platform.

Why having a good management system for deliveries is important

Below, you can find the main points that outline the importance of having a good management system for deliveries:

  • Increased efficiency: Having a well-structured and dependable delivery process in place helps increase the efficiency of the business. It does this by reducing the time spent in handling and managing parcels and provides you and your team with enough time to improve other aspects of the business.

  • Maximised profit: A company with a good management system for deliveries not only ensures the package gets to the customer, but it also ensures the package isn't damaged. This prevents a large number of returns and complaints, which helps you maximise the business's profits.

  • Improved customer satisfaction: Purchasing goods from e-commerce businesses with an efficient management system for deliveries improves customer satisfaction. This is because they receive their goods promptly and without any damage to the goods.

  • Increased supply chain communication: A good management system for deliveries has a working supply chain of communication between the third parties involved in the delivery process. This increases delivery efficiency.

  • Faster delivery options for customers: There are several factors that influence fast delivery, such as store stocks and how you fulfil orders. Irrespective of these factors, businesses with a good management system for deliveries can provide fast delivery options to customers.

  • Access to real-time data: A good management system for deliveries provides more visibility and transparency with a real-time order tracker. This allows customers to conveniently track their parcel at any time.

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