We live in a fast-paced world. Consumers want convenience as well as instant gratification. Delivery speed is now a crucial part of the last-mile logistics business. Same-day delivery has become a must-have offering in e-commerce segments. Almost 88% of customers are ready to pay extra for same-day delivery. The global 'Same-day Delivery' market will rise from USD 4.8 billion to USD 16.8 billion by 2027, with a CAGR of 19.5%. Most e-commerce companies are already offering same-day delivery. And if you are planning to do so in the near future here are some challenges you might face.

Inadequate drivers and delivery vehicles

Availability of last-mile delivery resources has always been a challenge for logistics companies. And same-day delivery specific requirements have increased those challenges. A significant number of vehicles and drivers in last-mile delivery operations are on-demand. Same-day delivery gives very little time to logistics companies to identify such resources. And hire them for a short period.

Disorganized dispatching and routing

Most logistics companies use manual routing and dispatching processes which takes a lot of time. It can be a nightmare for a same-day delivery operation. The routing and dispatching should be efficient. And happen within an hour to ensure most time is available for delivery operation.

Lack of well-distributed fulfilment centre model

Same-day delivery needs hyperlocal fulfilment centres. But hyperlocal fulfilment centres are small ones and can only accommodate limited inventory. So, there is a need for a structured hub and spoke model. Big fulfilment centres at strategic locations can support micro fulfilment centres (MFCs). These big fulfilment centres can supply stocks daily to the micro fulfilment centres based on the forecasted demands and available inventory levels.

Real-time monitoring of delivery and faster response to changes

In same-day delivery operations, companies need to respond to any unforeseen change in orders within a few minutes. It is to ensure delivery SLA. For that visibility of vehicle locations and shipment progress are an absolute necessary. Also, these operations need to accept last-minute addition/ deletion of the delivery order.

Accurate demand forecasting

The right amount of inventory at micro fulfilment centres is critical for same-day delivery. In MFC neither stock-out nor excess inventory pile-up should happen.

How to overcome these challenges?

A well-organized same-day delivery operation is a profitable one. You can leverage technology for automation, anticipation and planning. Using a proper Routing Software can play a crucial role to overcome some of the challenges we have listed. A Routing Software can ensure the best usage of resources, create routes and dispatch details within a few minutes. The software can generate delivery routes from big distribution hubs to micro fulfilment centres as well as from micro fulfilment centres to customer locations.

A routing software suitable for same-day operation should be able to take care of constraints/optimization needs such as:

Ability to have different start and end locations for vehicles

Same-day operations have a short time and distance. Having a vehicle's current location as its start or end location makes operation more optimized and cost-effective. A suitable route optimization software should be able to generate different start and end locations for the vehicles.

Use of one vehicle for both pickup and drop

Most same-day operation involves the delivery and pickup of items from various MFCs locations. Hence the route optimization software should be able to take various pickups and delivery points as inputs. And it should optimize the routes so that a vehicle can do both pickups and deliveries. It will reduce the number of vehicles required.

Selection of vehicles with ideal capacity

The daily weight or volume of items for delivery in a specific area varies in same-day operation. So, the optimizer should choose the vehicles with the ideal capacity to reduce the operation cost. Using large vehicles for a small number of items means unnecessary expenses. And using smaller vehicles for a large number of items means inferior packing of orders and unnecessary expense.

Incremental planning or Manual change

Same day operation is more dynamic and involves last-minute addition or deletion of delivery or pickup. Running full optimization for a small change of order means longer software running time. It also means a re-start of accumulation and loading of items in vehicles from scratch. A good optimizer should be able to do incremental optimization of new orders. And keep the already generated routes untouched. This ensures the accumulation and loading of items for only the new orders. Thus, manual editing of orders from the generated route can accommodate last-minute changes.

Automatic communication of routes to Drivers or Delivery persons

There is wide adoption of smartphones amongst the contracted drivers and delivery personnel. A good routing software should be able to send automatic messages to the drivers' smartphones with generated routes. It reduces the manual communication burden. And provides more time for delivery operations.