Improve On-Time Delivery with a Route Optimization Tool

There’s a quote that people often attribute to the late Packers’ coach Vince Lombardi: “If you are five minutes early, you are already ten minutes late.” In fact, Lombardi was such a stickler for punctuality that the Packers set their stadium clock 15 minutes ahead as a tribute.

Now, we can get into whether or not early deliveries are better than late deliveries (for many consumers, showing up early is worse than showing up at the right time). But Lombardi’s head is in the right place when it comes to last mile deliveries: you absolutely want to keep your on-time delivery rate as high as possible.

On-time delivery (OTD for short) is a key performance indicator (KPI) used to measure a business' supply chain efficiency. It reveals whether your company is meeting its promised delivery times, helping you measure both customer satisfaction and driver/carrier performance.

Tracking OTD shows the effectiveness of your in-house fleets or third-party logistics (3PL) partners. Measuring this KPI also enables you to improve your customer satisfaction and return purchase rates—which is especially crucial these days, considering that companies are facing a number of new challenges in ensuring high on-time delivery rates and customer satisfaction. 

At the same time, missing or failed deliveries are real sources of frustration for customers. Many customers who have experienced poor delivery experiences will refuse to patronize the same brand—which makes it particularly imperative that you optimize for this KPI. 

And how should you make that happen? Start by focusing on your delivery planning software. 

The Importance of On-Time Delivery

On-time delivery is one of the ways customers evaluate the delivery experience, making it a crucial element in customer experience overall. Low OTD rates result in a higher number of (expensive) customer service calls, customer complaints, and irate customers. Naturally, it also increases the operating costs for your business.

Ensuring on-time deliveries is especially crucial now that consumers have greater demands and competition is stiffer. Customers these days don't care about your inventory management issues, supply chain problems, or any other reasons for delays. All they care about is that orders arrive in the promised delivery windows on the right date.

With social media and the internet, you can expect customers to raise their complaints online. And this is before we even talk about the cascade effect that even a couple of late deliveries can cause for the rest of a given route. Simply put, on-time delivery is crucial in ensuring customer loyalty and achieving high customer retention rates. 

What Causes Late Deliveries? 

There are several reasons for late deliveries or failure to deliver after a specific time and date: 

Poor route optimization

Many businesses still use manual route planning, which relies heavily on planners' expertise, spreadsheets, and paper. When you can’t effectively take things like driver skill and customer preferences into account, it becomes harder and harder to create efficient routes that will actually result in on-time deliveries. 

Effective route optimization helps companies deliver as many orders as possible without risking late deliveries. The key here is to leverage technology that’s designed not just to generate the fastest routes and schedules, but to ensure accurate ETAs for each stop as well. 

Lack of visibility

The lack of visibility on the fulfillment process, especially during transportation, makes it impossible for decision-makers to know what exactly is causing the delays in deliveries. For instance, if you can’t gain easy visibility into your available delivery capacity, you can’t make the most of it in your logistics process. 

By the same token, a lack of real-time visibility makes it impossible to be proactive about managing potential delays on the day of delivery. Too often, your routes are a black box as soon as the truck leaves the warehouse. 

Disconnect between delivery and inventory management

Customers can end up placing orders for goods that are not in stock if you fail to manage inventory efficiently—or if your inventory management and your last mile logistics aren’t integrated effectively. This will result in delays and long lead times, which means your teams will be stuck handing more order cancellations and customer complaints.

Improve OTD with a Route Optimization Tool

It’s no secret that a lot can go wrong on the last mile—but the challenges that impact on-time deliveries can increasingly be mitigated by modern logistics software. In fact, a connected route optimization tool is key to improving on-time delivery rates. Here's how it helps:

AI-powered route optimization

AI-powered Route optimization can consider a laundry list of relevant factors in determining the best routes, thus allowing you to provide customers with accurate expected times of arrival (ETAs). 

This might include variable service time calculations for different order types, traffic predictions based on historical data, capacity limitations and driver speed factors, and more. By leveraging all of this granular information into routes that are realistic in addition to being efficient, you can boost your on-time rates by a huge amount. AI can easily help you reach 98% ETA accuracy or better, which has a huge impact on overall delivery efficiency. 

Automation and visibility

Automation is key to efficient last mile deliveries. Likewise, knowing where the orders are at any given time enables you to spot potential problems before they spin out of control. Automating as many processes as possible and keeping track of packages in real-time eliminate human errors and speed up the order fulfillment process.

This means speeding up the route optimization process itself (modern route planners can speed up routing by 70% or more), as well integrating your routing engine with your delivery tracking technology to instantly update ETAs with live information and flag potential late deliveries. 

Integrated systems

Many companies using multiple systems for different elements of the fulfillment process run into issues when they find that the different systems cannot connect to each other. The best route optimization software is one that can be integrated into your other current systems so that you can make the order fulfillment process more seamless.

The goal here is connected logistics across the board. Your routing should sit at the heart of a fulfillment ecosystem that also includes driver management and delivery tracking—this helps ensure a close relationship between planning and execution. 

Automated, real-time updates to customers

No order fulfillment process is perfect, which is why you should always expect things to go wrong once in a while. But the right routing software offers automated updates and notifications to customers throughout the process, keeping them apprised of the occasional delay. 

This way, customers will know what's happening to their order and won't be kept in the dark about their order status. Keeping customers informed in real-time will lessen their frustration over delayed deliveries, boosting customer satisfaction and decreasing churn.

How DispatchTrack Can Help

In the end, the key to ensuring on-time delivery is to invest in advanced logistics route planning software that can help you automate processes, optimize routes, gain real-time visibility, and provide live updates to customers. If you can make that happen, you can increase both on-time delivery rates and customer satisfaction.

DispatchTrack has helped its customers to achieve 98% ETA accuracy with our AI-powered route optimization—while regularly helping to speed up routing time by more than 50%. The result is that our customers improve their on-time delivery rates, improve customer experience, and save time and money across the board. 

If you’re ready to level up your logistics processes with the right route optimization tool, get in touch today.