How Operations & Logistics are Crucial for Delivery Management

by | May 9, 2023 | Blog, Routing & Dispatch

You’ve probably heard that most online shoppers will be quick to abandon their orders if the delivery takes longer than a week. But have you heard that nearly a quarter of online shoppers would leave their order if no delivery date was provided? Reign in your operations and logistics management to ensure you can provide accurate and reliable ETAs for your customers and prevent losing them during check out.

Operations & Logistics - No Delivery Date Statistic Graphic

Operations and logistics are the processes that connect the customer to the product or service they need. It encompasses everything from order fulfillment to transportation and delivery, as well as any other activities that involve moving goods from point A to point B. By having a smoothly running system in place, companies can meet their customers’ needs quickly and efficiently.

Having a reliable operations & logistics strategy is especially important for eCommerce businesses, which need to be able to deliver their products on time and in the condition promised. That means having the right processes and systems to track inventory, fulfill orders, and package items for shipping. Additionally, companies must ensure a reliable system for tracking orders right from the warehouse to the customer’s doorstep.

Curious to discover more? In this article we will cover:

The Key Difference Between Operations & Logistics

The differences between Operations & Logistics Graphic

While both operations & logistics are connected to the movement of goods, they are distinctly different processes. Let’s discover what both terms mean and their key differences:

What is Operations?

Operations focuses on the production, development, and maintenance of services or products. It is responsible for all activities that take place within a company, such as marketing, finance, customer service, production, and distribution. Operations aim to maximize efficiency and ensure quality control.

Put simply, operations refers to the activities needed to create a product or service and make it available for sale. Regarding delivery management, there are three primary categories of operations: purchase order management, transactional procurement of goods, and inventory management. Here’s a closer look:

  • Purchase Order Management: POM involves the management of orders and purchase information. It includes tracking the order from placement to delivery, including any changes or cancellations. Moreover, POM ensures that every purchase is justified, necessary, and cost-optimized.
  • Transactional Procurement of Goods: Transactional procurement involves purchasing goods from suppliers and ensuring they are delivered on time and in the right quantities. It is vital to have solid processes for this operation, as it can be complicated and require coordination between multiple parties.
  • Inventory Management: Inventory management is tracking and managing the stock of goods available for sale. This includes knowing the quantity of goods, their condition, and where they are stored. It’s crucial to have a comprehensive inventory management system in place to ensure that items are ready for sale and delivery when needed.

What is Logistics?

Logistics focuses on planning and executing the delivery of goods or services. It involves managing the transportation, storage, and distribution of goods from point A to point B. Logistics also includes activities that support the movement of goods, such as warehousing, packaging, tracking, and customer service.

Put otherwise, logistics refers to the activities needed to deliver a product or service to the customer. It is especially important for eCommerce businesses, as customers expect their orders to arrive on time and in the condition promised. Here’s a quick look at the five elements of logistics:

  • Storage, Warehousing, and Material Handling: Here, goods are stored, retrieved, and managed. This includes stock control, loading & unloading of goods, and the physical movement of items.
  • Packaging: Packaging is essential for protecting goods during transportation. It also affects how customers perceive the product – ensuring appropriate packaging to protect against damage and create a good impression.
  • Inventory Management: As mentioned above, inventory management tracks stock levels of goods available for sale. It’s a key logistics component, as the correct inventory levels must be maintained to ensure that orders are fulfilled on time and in the right quantities.
  • Transport: Transport covers the physical movement of goods from one place to another. This includes selecting suitable transportation methods and managing associated costs.
  • Information and Control: Information & control covers the collection and management of data related to logistics operations. This includes tracking shipments, monitoring stock levels, and ensuring orders are fulfilled on time.

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The Key Difference

In business management, there are several distinct segments and departments that work interdependently to ensure success. Operations & logistics are two of such that contribute to the overall success of deliveries.

The critical difference between operations and logistics is that operations focuses on the activities needed to create a product or service. In contrast, logistics focuses on the delivery of goods or services. Mainly, operations deals with designing and controlling the production and business operations process to ensure the efficient delivery of products or services. At the same time, logistics focuses on the planning and execution of the delivery of goods or services.

Why Both are Important for Efficient Deliveries

Overall, operations and logistics are crucial elements in efficient delivery management. A well-managed operation system ensures that goods are produced on time. In contrast, a well-managed logistics system ensures that customers receive their orders in the proper condition and by their ETA.

But that’s just the tip of the iceberg; here are six ways logistics and operations impact the efficiency of your delivery management:

  1. Accurate Inventory Management: Operations and logistics work hand-in-hand to ensure accurate inventory management. Logistics helps monitor the inflow and outflow of goods, while operations focus on producing the right amount of goods at the right time. That way, you don’t end up with too much or too little stock in your warehouse.
  2. Reduced Costs: By streamlining operations and logistics processes, businesses can reduce costs. This is because efficient operations & logistics processes require fewer resources. For example, if an eCommerce business optimizes its delivery route planning, it can save money on transportation costs. Likewise, an optimized supply chain can help reduce inventory costs.
  3. Improved Customer Satisfaction: Customers expect their orders to arrive on time and in the proper condition. Operations and logistics processes must be streamlined to ensure that orders are fulfilled quickly and accurately. This will improve customer satisfaction and lead to more repeat business, thus, higher sales.
  4. On-time Deliveries: Logistics and operations are crucial for ensuring orders reach customers on time. Streamlined processes ensure that goods are delivered in the right condition and as quickly as possible. Similarly, efficient operations processes ensure that goods are produced and shipped on time.
  5. Increased Visibility: Logistics and operations provide a comprehensive view of the delivery process, from production to delivery. And it’s easy to see why; every step of the way, from production to shipment, is tracked and monitored. This helps businesses identify potential issues, allowing them to address problems quickly and efficiently.
  6. Better Planning: Logistics and operations help businesses plan better by providing them with the data they need to make informed decisions. For instance, you can use your operations and logistics data to forecast demand, plan production, and manage inventory. The reward? Your business will stay ahead of the competition and ensures that orders are fulfilled on time.
  7. Increased Productivity: Efficient operations and logistics processes help increase productivity as fewer resources are required to fulfill orders. For instance, by combining optimized route planning and on-demand third-party delivery, you can reduce your delivery costs significantly since you’ll save on transportation expenses like fuel, driver salaries, storage, vehicle-related costs, and more. At the same time, you’ll improve productivity by using the most efficient routes, providers, and processes to fulfill orders quickly.

Impact on the Overall Supply Chain

Logistics and operations also have a significant impact on the overall supply chain because they are the two key elements that work together to ensure a streamlined supply chain management process. With a well-managed logistics system, goods are shipped and delivered at the right time and place.

At the same time, efficient operations help optimize production processes, ensuring that items are manufactured in the most efficient way possible. By streamlining operations and logistics, businesses can reduce inventory costs, optimize deliveries, and increase customer satisfaction.

Last but not least, accurate information & control systems are necessary for the efficient supply chain management. A well-managed information system helps businesses track the status of orders and shipments, while a robust control system ensures that all processes are running smoothly.

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Working Together: How to Coordinate Operations, Logistics, and Delivery for a Seamless Experience

To ensure a seamless delivery experience, operations and logistics must work together. Thankfully, there are proven ways to accomplish just that! Here are some tips on how to simplify the delivery management process by coordinating all three crucial elements:

  1. Use Updated Technology: Utilizing the latest technology can be a game changer when it comes to streamlining operations and logistics. For instance, route optimization software can help you plan the most efficient delivery routes, while inventory management systems make it easier to track where goods are in transit. Other delivery management technology solutions you may consider include automated order processing, returns management software, freight management systems, and warehouse optimization tools.
  2. Establish a Unified Process: A unified process is essential for effective operations, logistics, and delivery. Businesses should ensure that the data gathered from their operations and logistics processes are accurate and up-to-date. For instance, if you’re an on-demand delivery service, you should unify the process of keeping track of customer orders and deliveries, as well as the status of vehicles and drivers.
  3. Set Clear Objectives: Defining clear objectives is fundamental for successful delivery management. This includes setting up key performance indicators, KPIs, such as on-time delivery rates and customer satisfaction scores. That way, your team will know what’s expected of them and be able to optimize the operations and logistics processes accordingly.
  4. Utilize Automation: Automation helps streamline operations, logistics, and delivery processes. This includes automating order processing, tracking, and returns. Automation tools such as AI chatbots can also help enhance customer engagement by providing accurate information about orders & shipments in real time. But you can also utilize returns automation software for automatic returns validation, product returns tracking, and returns policy enforcement.
  5. Ensure Quality Control: Quality control is essential for ensuring a seamless delivery experience. To that end, businesses should ensure that their operations and logistics processes are up to date and that all shipments are of the highest quality. This includes conducting regular checks on products and packaging materials to confirm that they meet the standards set by your company. Additionally, you should use tracking tools such as GPS technology to monitor the progress of your shipments.

By following these tips, you can ensure that operations, logistics, and delivery are in sync. It will help your business achieve an efficient delivery management process while providing customers with an outstanding delivery experience.

Elite EXTRA Can Help You Optimize Your Deliveries!

Operations and logistics are the key pillars of efficient delivery management. To ensure a seamless customer experience, businesses must coordinate these three crucial elements. You can effortlessly achieve this using technology, establishing a unified process, setting clear objectives, utilizing automation tools, and ensuring quality control. Doing so will help businesses optimize their operations and logistics processes while still maintaining stellar customer service.

But the success of a delivery management process also depends on the right software solutions. That’s where Elite EXTRA’s last-mile software suite comes in handy. Our solution is completely configurable to help businesses automate their operations, logistics, and delivery processes.

From optimized route planning to automated returns, Elite EXTRA’s last-mile software suite promises to streamline your logistics processes without breaking the bank. And the best part? All our software solutions integrate seamlessly with each other to offer top-notch functionality and scalability.

So if you’re looking for a powerful solution to help you achieve a successful delivery management process, look no further than Elite EXTRA. Request a live, customized demo today, and let us show you why our software is one of the best last-mile solutions in the market!

Sources

https://www.conveyco.com/blog/ecommerce-order-fulfillment-statistics/

https://www.businessnewsdaily.com/10613-effective-inventory-management.html

https://www.netsuite.com/

https://extension.psu.edu/the-economics-of-a-transport-and-or-delivery-business

Mallorie Barabas

Mallorie Barabas

Author

Mallorie is the Marketing Strategist at Elite EXTRA; if you ask her about her job, she will immediately tell you to follow @EliteEXTRA on LinkedIn (that is your cue;) When she isn't at the office, you can catch her teaching aerial yoga, swimming, or just generally enjoying the outdoors.

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