Press release – June 12, 2014
OpenMarket Roundtable for Logistics Manager
The ubiquity of the smartphone and the rapid development of omni-channel retail has put mobile communications back into the limelight, but the uses for mobile and text communications goes far beyond the final mile.
Companies are finding increasingly innovative ways to harness mobile technology in their operations to make existing processes more efficient, and to create new offerings for the customer, the end user, and to logistics operators themselves.
In our round table discussion, hosted by OpenMarket, we invited leading logisticians to examine the uses of mobile technology across the supply chain.
Simon Hobbs, vice president for supply chain development at Ceva revealed that the firm has taken to the concept of sending SMS text messages for several parts of the chain, but that the most vital is the initial contact with the end user. “If you look at the customer experience, I’d argue that that experience starts at the product availability.”
“For me the experience starts right at the beginning of the supply chain in terms of the first collection of either the raw material to make the equipment or product, or the physical product, so for us mobile technology gives us visibility of that first collection, so we’re at a supplier anywhere in the world and that first stage is such an important link to say ‘I have the right components’…We will use mobile technology throughout our own fleets and through contractors.”
Hobbs talked of using mobile technology to unify “non-Ceva resources” which sparked agreement around the table. Nigel Spooner, business development director, retail at DHL Supply Chain said that the firm has seized on the ubiquity of the smartphone to make the most of its systems when taking on temporary workers.
“For dealing with sub-contractors globally, and in the UK from a transport perspective, we’ve developed apps.” He said this is primarily to ensure the flow of track and trace information remains consistent. And that means throughout the supply chain, not just the final mile.
“Because we might use them for a month, we might use them for a week, we might use them for a year, but we want them to still be feeding all the track and trace stuff for the big loads as well as home delivery,” said Spooner.
This idea of pushing the concept was taken further as “mobile technology goes beyond that,” said Hobbs. “The text is the start of the process, but from that you can go into chat dialogue, you can record things, there’s traceability which is important, and you can manage issues within your own organisation before you have to reach out to your customer.
“For us it helps the performance of the supply chain, in terms of the speed of it, its customisation or cost avoidance. There’s also the environmental benefit, a lot of that is telematics in vehicles which is fantastic and really powerful in how you drive out CO2.The last bit in that supply chain is that final customer experience – what day do you want it, what time do you want it and, if there’s a problem, we want to know.”
The more traditional use of texts to communicate delivery details to the final customer has been developed beyond the basic “notification”. Interlink’s Mark Livingstone said that interactivity, and giving the consumer a way to talk back, is a key.
“One of the key drivers to our growth is that we’ve rolled out our Predict service, which is a one hour delivery window… We’re transmitting text and email messages, and we have much more customer interaction these days.
“They have an option to say ‘yes please leave it safe’, ‘please leave with a specified neighbour’ or ‘can I pick it up from the depot’, or ‘can I pick another day’… “
“We’re transmitting that data as soon as we pick the parcel up, so the customer has the opportunity to tell us the day prior, ‘don’t even bother loading it on the van’ and that has all the environmental issues driving down the costs.”
“We used to run at a four per cent re-delivery rate, but we’re down to two per cent at the moment.”
A fifty per cent reduction in re-deliveries is certainly a persuasive statistic. Livingstone said that this has been extended to use customer communication as proof of delivery.
One of the more unorthodox uses of texts for telematics improvements was expounded by Hobbs, who started by giving a rather unusual fact about his drivers: “If there’s going to be an accident it’s going to be on a Wednesday for some reason, it’s amazing! So we’ve used text technology to send a text out to say ‘be aware, it’s a Wednesday, keep alert!’ and it’s things like that that which have tended to work in the past,” said Hobbs.
Andy Taylor, managing director of InPost UK reflected that in his experience at Yodel and DHL he has seen text technology become bedded into the industry, but he reckons there is still scope for more.
“We send the details to get your parcel from the locker via text message… But as you start to expand your thinking about it there are a still an awful lot of areas we don’t use it and we could…”
“Very few people say ‘it’ll be your Amazon Parcel that’ll be delivered tomorrow’ they just say your parcel, and then you can’t make a value judgment about ‘do I want to wait in for that widget which actually I don’t care if I don’t get for three days, or my new camera which is coming tomorrow and I’m desperately waiting for’. So there’s still opportunity even in these fairly well developed systems to do it considerably better than we do, frankly.”
Adrian Sarosi of OpenMarket pointed out that the barrier to the potential of mobile technology to do more is often the perception of cost. “We’ve seen with lots of new industries that jump into mobile that they see the message as a cost.”
“But we’ve noticed that the customers that go from a marketing point of view take it as an operational value and they say we’ve recognised that we’re displacing somebody else’s budget, so we’re saving money on what were the outbound phone calls, or what were the outbound pieces of print mail. It’s a far greater saving as well as that difficult to measure brand engagement from the end user.”
He gave the example of a bank who used texts to replace outbound phone calls alerting customers to potential credit card fraud, which left call centre workers free to deal with confirmed frauds. Sarosi said this scheme paid for itself within one day.
The concept of bulk texts raised the issue of misuse of the technology, with one guest saying that some six out of ten text messages he receives are spam. But the group agreed this is a generational issue with younger people being much more reliant on mobiles, and Sarosi pointed to open rates to back this up: “The statistics that we see from the direct marketing agencies… the high 90 per cents get opened within five minutes of being sent, in comparison to email which you’d be lucky if you’re down in the ten per cents… And where the timeliness matters, not just to the end user but to your business, that open-ability is crucial.”
“That’s one of the challenges – knowing when to send out engagement, and what it contains” said Hobbs.
The use of SMS to reinforce training messages was highlighted by Siamac Rezaiezadeh of OpenMarket, who gave the example of a firm which monitored savings after a driving course.
“What they found is that after about 12 weeks, the errors that drivers had been making previously started to creep back, and that simple refresher notifications, no matter how they were delivered, actually prolonged that 12 weeks to 24 weeks and ended up driving down their fuel consumption just from timely reminders,” he said.
And as well as brand or enterprise based controls, Europa Worldwide’s group IT director, Richard Litchfield, pointed out that there is scope to let the customer decide on how much engagement they want. “You can offer that, you can say to the customer ‘if you want it, we provide this level of updates, if you want additional updates, text us’.”
“That can be specific not just to the customer but to the shipment or the products. The customer can define exactly what they want to receive.”
The issue of who becomes the custodian of the communication strategy is of course a matter for individual consideration. But there was widespread agreement that the priority for communication from a logistics provider should be correct and consistent information, and that the extras such as tailored updates, should be decided on by the customer.
“My view is that we do the consistent bit, and leave it to the retailers how many times to contact their customer,” said Spooner.
Taylor raised a valid concern about customising services for the end user, particularly for distribution businesses, as the further you get down the supply chain, the less you know about the end user. “I only know two facts about my customers today: their email address and their mobile phone number. I don’t even know their names.”
“In terms of what they chose to do and not to do, that’s actually driven by the start of the chain and getting that information to provide to me is quite a challenge.”
Litchfield pointed out that interaction is less important for B2B operations. “If I’m overseeing 500 deliveries a day, do I want 500 messages? Probably not.” But this moved the debate on to how mobile technology is being used within organisations.
Spooner explained how he sees this kind of technology being used for geo-fencing stores, to ensure deliveries and unloading runs smoothly to help save costs, or manage staffing levels: “You might be able to sweat that trunking asset better if you’ve got that bit more flexibility, so they get that information when the truck’s en route,” he said.
There was some excitement about the prospect of automated texts to communicate staff requirements in response to the massive spikes in demand for pick and pack operations.
“People can see their well of orders building so we can predict the number of staff needed tomorrow morning by six o’clock or eight o’clock in the evening depending on when the cut-off is,” said Spooner.
“Some of our retail operations in Peterborough have a 400 per cent increase in staff from the norm for peak, so do you just rely on the agencies? ‘I need 500 tomorrow, day after that I need 300 depending on the order well’? You could be more proactive.”
The big sites are also a challenge when it comes to simple issues such as staff parking, said Spooner. With big multi-user facilities all within the same area, managing that workforce and the availability of facilities (such as parking) is a serious issue.
“Do you invest in multi-storey car parks on-site? Or could you help your colleagues develop car share schemes through some sort of central portal or texting?” asked Spooner.
This was seen as a compelling question, especially for key logistics areas like Crick where workers live far enough away from the workplace that commuting is a strong factor in the decision of where and when to show up for a shift. Spooner said: “It might be the difference between making it cost effective to come to work or not.”
There was a general agreement that the demands of the end user now make mobile communication a requirement, but Hobbs raised the notion that the key is to take a balanced approach. “One of our challenges is who we partner with and how we keep innovating to keep meeting the end user expectations. It’s not a barrier, it has to be done, but there’s various ways of getting there.”
All the roundtable participants had their own experience of working with mobile technology and m-commerce, but there is evidently a lot to learn about the potential of the platform. The consensus was that preconceived notions are holding back progress and that with a more considered approach there is great potential for increasing operational efficiency, not just improving the end-customer experience.