Delivering intelligence: How AI automation transforms the last-mile workflow

Experts had predicted e-commerce, home delivery, and other conveniences would take over the market this decade, but the pandemic lockdown dramatically accelerated the timeline. In fact, McKinsey estimates that 10 years’ worth of e-commerce growth happened in the first three months of the pandemic. Research by Adobe Analytics found that e-commerce sales surged by 55% in the first two quarters of 2020, and that order volume has hardly changed in the past two years. Demand also increased dramatically for other contactless services, such as grocery and meal delivery.

The entire supply chain has been in chaos since the start of the pandemic, but the key role of freight forwarding and the fragile systems that manage last mile to fulfill e-commerce orders and local deliveries have been particularly strained. When it comes to solving supply chain problems, most experts are focused on the challenges of international procurement and shipping, but last-mile workflows need solutions as well.

For years, major players in the global supply chain implemented increasingly advanced artificial intelligence-powered automation into their workflows, improving efficiency and benefiting everyone downstream. Now, it’s time for the stakeholders involved in the complex issues around freight forwarding and last-mile delivery to make their own upgrades with AI automation.

The challenges of the last mile

There’s a reason there’s so much potential for waste and mismanagement during the final stage of the supply chain: it has the most variables to consider and balance. In a survey by Accenture, over 61% of logistics companies agreed they were most ineffective when it came to last-mile delivery.

Last-mile delivery depends on labor more than many other legs of the supply chain journey. Freight forwarding determines the best options, then workers are tasked with driving through traffic to a customers’ destination. Once they get there, they may lose valuable time to locked gates, confusing apartment complexes, pets, and other obstacles, just to drop off a package. There are other operational difficulties as well:

High delivery costs

Labor is one of the most expensive budget items for every company. It’s easy to achieve a high ROI by paying one driver to deliver high-value raw material to a single manufacturing site. Last-mile delivery, however, has razor thin margins, with drivers making 170 to 350 deliveries per shift. In fact, an estimated 28% of all delivery costs are for last-mile delivery. The cost of gas and mileage reimbursements adds up quickly as well. Even with the best freight forwarders optimizing for the last mile, slowdowns or small mistakes can add costs.

Lack of transparency

Last-mile delivery is deeply tied to customer service. Tech savvy consumers value fast delivery speeds, as well as clarity about when their package will arrive. Without specialized location tracking apps, it can be difficult to provide accurate estimates.

Freight forwarding and delivery optimization

So much that can go wrong during last-mile delivery, and every delay can dramatically eat into profit margins. Management teams can avoid wasting time by ensuring the workflow of every driver on duty is fully optimized. But how can they effectively plan routes and balance workfloads when critical data is trapped in documents?

AI automation to the rescue

Major ERPs like Oracle and SAP don’t have a lot of options for last-mile delivery, but that doesn’t mean solutions don’t exist. Given the document-heavy nature of supply chain processes, intelligent document processing platforms like Automation Hero’s are ideal for managing the paperwork — digital and physical — involved in delivery, while providing end-to-end process management for other aspects of an organization.

Automation Hero can help freight forwarders and delivery managers with every aspect of their work with AI automation, including:

Planning delivery routes

Ahead of each shift, users can leverage the AI’s data extraction capabilities to pull delivery addresses from each order document wherever they’re stored, be it databases, emails, or other channels. Managers can then use AI automation to enter this data into route-planning software. Automating data entry makes it easier to log and convey more information to drivers, such as gate codes for apartment complexes, drop-off instructions, or issues reported by previous drivers. Users can manage more information with less effort. 

Streamline logs, mandated reporting, and final delivery reports

With intense margin pressure, any time drivers spend not driving or dropping off packages is time that cuts into profit. Automation Hero can minimize paperwork by extracting data from drivers’ app-based logs and inputting it into their managers’ databases. Managers can further increase this time saving by extracting this information from logs for reports, performance evaluations, and other needs.

Remap workflows

Automation Hero connects seamlessly to every type of data source and destination. In case of unexpected obstacles in a pre-planned route, users can extract current and past delivery data and run an AI model to analyze the information, then find an optimal solution.

E-commerce and home-delivery represent a vast new opportunity for profit  — but only if companies can control its high costs. Optimizing last-mile delivery is one of the most complex parts of the supply chain to manage, but delivery managers don’t have to go it alone.
Thanks to platforms like Automation Hero, AI automation that has helped every other part of the supply chain can now extend all the way to delivery drivers. Learn more about how our platform is transforming the supply chain in our new e-book, Remapping the supply chain: How AI helps supply chain and procurement teams stay agile in times of chaos.