Among building supplies leaders, the general feeling is that—barring anything truly unexpected—material costs shouldn’t spike particularly dramatically in the coming year. What does that mean for logistics leaders in building supplies and construction? It means that you’ve got a real opportunity to take control of costs across your logistics operations without the rug getting pulled out from under you.
Simply put, there’s never been a better moment to focus on cost efficiency and optimization in your operations. The question is: how do you go from wanting to reduce logistics costs to actually making an impact on the balance sheet?
Here are six key tactics for doing exactly that:
1. Get Your Team off the Phone
One of the biggest sources of time, frustration, and cost across huge numbers of building supplies distribution operations is simply the sheer amount of time spent on the phone coordinating with customers (to say nothing of drivers, 3PLs, and other key pieces of the delivery and logistics process). Here’s the good news: it doesn’t have to be that way.
Coordinating with customers is a huge part of the job, but it’s not something that has to take up tons of your team’s time. Instead, you can automate and optimize both scheduling and customer communications to the point where you only pick up the phone when you really have to.
Sound too good to be true? We can assure you that it isn’t. At DispatchTrack, we’ve helped building material distributors digitize their logistics operations, saving them huge numbers of phone calls and cutting millions of slips of paper out of their processes.
2. Coordinate More Seamlessly with Your Customers
Saving phone time can go a long way towards enabling cost optimization, but it’s not just the scheduling and coordination process that can be a cost center—it’s the schedules themselves. When they’re not efficient, you wind up with your teams driving more miles, using more fuel, and spending more time on the road.
This is a recipe for high cost-per-delivery.
Luckily, the right routing and scheduling capabilities can help you make sure you’re coordinating effectively with your customers’ schedules while still getting the most out of your capacity. This starts with building in visibility into your fleet capacity and driver availability, ensuring connectivity with customers and their schedules, and leveraging sophisticated routing and scheduling capabilities to ensure optimal scheduling.
When you’ve got the right technology foundation, you can turn scheduling from a constant manual headache to a fast, precise, and accurate process that your teams can leverage into a competitive advantage.
3. Ensure Driver and Technician Compliance
One of the biggest challenges in cost reduction comes down to ensuring a minimum of rework and quick realization of revenue. We’ll talk below about how improved delivery documentation can help with both, but before we dig into that it’s important to note the ways that driver and technician compliance can impact those cost factors as well.
There’s a laundry list of things that drivers need to get right. They need to load the right orders onto the truck, deliver the orders not just to the right site but to the right person and/or the right area in many cases, and for many orders they’ll need to ensure that the items have been delivered safely and securely and in some cases they’ll need to have been installed correctly.
It’s why many logistics operators saddle their teams with thick binders full of compliance information that they’re expected to have ready to hand. Unfortunately, even when these binders are actually getting consulted, they still result in longer times at the job site and inevitable mistakes. Simply put, they’re an impediment to actual compliance.
What’s the alternative? Your best bet is to leverage a driver mobile app that automatically presents the drivers with the right compliance forms based on the SKU they’re delivering. This can include anything from requiring a picture of a valve fitted correctly as part of an install process to an image of materials at a safe distance from any hazards to a simple checkbox to ensure that the right person had signed for the delivery.
The trick here is to make things as seamless as possible from the driver’s perspective. This helps you make compliance the default, all while ensuring clear documentation.
4. Capture a Complete Delivery Audit Trail
Speaking of clear documentation: another key to keeping costs in check is to ensure a complete and accurate delivery audit trail, including digital photographic proof of delivery. For every delivery run and every job, drivers should be able to (or even required to) quickly and easily capture a picture, take down a note, and if applicable capture a signature to definitely show what was delivered where and at what time.
Photographic proof of delivery makes it much easier for you to get paid. Rather than wrangling clients who aren’t able to sign off on invoices because they can’t verify the delivery, you can sail through the process of billing and settling.
This has internal benefits as well. It gives you clarity into your operations and improves the quality of your reporting. When you combine this with data about truck locations, when items are scanned on and off of trucks, etc., you can get a total picture of your operations and translate it into data-driven cost insights.
5. Optimize Pickups and Will Calls
If your business doesn’t offer pickup options to customers, you can skip this section and concentrate on the other five cost reduction strategies. But for most building material distributors that offer customers store and warehouse pickup options, there’s a huge amount of money to be saved by treating pickups and will calls more like the last mile.
Here’s what an optimized pickup logistics processes might look like:
- The customer schedules an order online (or calls in and speaks to an associate). They choose a time slot from capacity-aware options.
- The system automatically alerts store and warehouse associates when it’s time to pick specific orders based on the current schedule. It also alerts customers when their timeslots are coming up soon.
- When customers arrive, they let your team know that they’ve arrived via text or through a customer portal, and an associate gets the (already picked and staged) order to the customer.
- The associate captures proof of receipt and marks the order as complete within the system.
Compare that to the typical manual process, which might involve a lot more phone calls, traffic jams, chaos, and confusion.
We go into more detail on this process here, but suffice it to say that it can help your associates process more orders with fewer headaches. More importantly, it can help improve…
6. Integrate the First, Middle, and Last Miles
We’ve focused heavily in this post on last mile deliveries—and with good reason. It’s the most costly leg of the supply chain by far.
At the same time, studies show that huge amounts of lost productivity can be attributed to supply chain handoff points, such as the transitions between the first, middle, and last miles.
What’s the solution here for building supplies delivery operations? It’s to ensure that the first, middle, and last miles are effectively integrated. That means connecting your software solutions to ensure visibility and prioritize transparency across the board.
Much of the burden of ensuring visibility here will fall on your last mile logistics software, so make sure you have a solution that can easily take in data from other tools and capture first-party data throughout the entire lifecycle of an order. When you have true visibility across the entire process, you can shorten order lead times and improve coordination across your own supply chain—resulting in lower costs and happier customers.
Conclusion: Partnering with the Right Technology Provider in Building Supplies Delivery
If there’s a clear theme to these cost optimization tips, it’s that taking control of costs in building materials distribution starts with laying the right foundation of tools and technologies. This might sound like it will come with its own headaches (and costs), but with the right partner the path to ROI is short and sweet.
Curious to learn exactly what that looks like in practice? Reach out to our team today—we’d love to walk you through it.