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Management

Does your business have a User’s Manual?

Excerpt from Business Mechanics, a book for all small business owners by Jerome Jacobs. What you will learn in this chapter – What kinds of things you can (and should) systematise. – How to go about systematising your business. – The importance of evolving your systems as your business changes and grows.

Excerpt from Business Mechanics, a book for all small business owners by Jerome Jacobs

What you will learn in this chapter:

* What kinds of things you can (and should) systematise.
* How to go about systematising your business.
* The importance of evolving your systems as your business changes and grows.

Systematise the routine tasks

A vehicle needs its engine and chassis to be kept in good working order if it’s going to reach its destination safely. That’s why new cars are sold with a User’s Manual; this tells the owner how to perform key maintenance tasks.

Unfortunately businesses don’t come with a ready-made User’s Manual: you need to write your own! This might seem onerous, but if you’re serious about keeping the wheels turning (profitably), it’s a must.

Imagine if every time you had to service your car you had to figure it out from scratch. That would be pretty time-consuming, right? It makes sense to document such a routine task.

The same thing applies in your business: taking a little bit of time up front to document routine tasks is a huge time-saver in the long run. It makes the routine task so much easier to implement by your team.

Effective systems can save you and your team both time and money. By ‘system’ we’re not talking about computer systems or programmes. No, this kind of ‘system’ is about the various tasks required in running a business – but doing those tasks in an organised, planned and coordinated manner.

Carrying out tasks in a planned way means that things are done consistently, regardless of the team member who’s carrying out the tasks. This makes it easy for new team members to get up to speed quickly in their role. Systems exist to help with routine tasks. Of course, not all tasks in a business are routine.

So anything that can’t be systematised (because it’s not a routine task) will need a greater degree of human involvement.

But by identifying what can be systematised, you’ll be using your human resources far more efficiently. The alternative to systematisation? That would involve employing more people, i.e. taking on more overheads and reducing your profit.

Remember…
* Systems run your business: as the business owner, you have invested in the system.
* People run your systems: it’s up to you to choose the people who implement these systems.
* You lead your people: it’s your vehicle… so drive it well!

What kinds of tasks can be systematised?

The following pages will give you an idea of what kinds of tasks can be systematised.
Of course, not all processes will be relevant to all business types – and there could be something really crucial that isn’t listed here.

It’s up to you to brainstorm what’s important, these are just ideas to help you get started.

Office and admin systems
• Answering the telephone: does everyone answer the phone in the same way?
• How do you deal with receiving and opening the mail?
• Purchasing and maintaining office supplies and equipment.
• Faxing and emailing: are stationery templates being used? Are there policies on email use?
• Dealing with incoming and outgoing goods.
• Backing up and archiving data, and checking that the back up data is complete and functional.

New product development systems
• Developing new products and seeking legal protection from them.
• Developing and protecting intellectual property.
• Developing packaging and collateral material, such as catalogues and sales aids.
• Developing manufacturing methods and processes.
• Systems for manufacturing and inventory control
• Selecting vendors, including a tendering process.
• Determining product or service warranties offered.
• Establish product or service pricing and margin levels, with retail and wholesale pricing.
• Establishing an inventory re-order process and establishing minimum and maximum inventory levels.
• Reconciling physical inventory with accounting records, i.e. stocktaking processes and procedures.

Processing and tracking orders
• Taking orders by mail, fax, phone or online.
• Logging the order and customer details in a computer system.
• Fulfilling and packaging the orders.
• Confirming the order and shipping details before delivery.
• Sending the orders, including a management system for freight,
• couriers and vehicles.
• Order tracking systems for shipments.

Invoicing and accounting
• Invoicing customers for the orders.
• Receiving payments for the orders and crediting customers for
• payment (whether cash, cheque or credit card).
• Monitoring credit control and age of accounts.
• Starting the collection process for outstanding receivables.
• Purchasing procedures and approvals required for Purchase Orders.
• Payment process for supplies and inventory.
• Petty cash procedures.
• Managing the accounting process with daily, weekly, monthly, quarterly and annual reports. Including cash flow statements, balance sheets and profit and loss accounts.
• Processes to ensure that monthly and yearly budgets are logged and that targets are met.
• Reviewing borrowing needs: are they secured and available?
• Tax procedures and payments to Inland Revenue. Includes reporting payroll taxes, sales tax, superannuation and withholding payments.
• Complete a weekly bank reconciliation and having a daily banking system.
• Maintaining an asset register including depreciation values.

Customer service
• Returns procedures: for inventory and customer orders.
• Logging and responding to customer complaints.
• Replacing defective products or performing other warranty service obligations.
• Measure quality and professionalism of service delivery.
• Customer feedback systems and measures.

Sales and marketing
• Negotiating, drafting and executing client contracts.
• Creating a strategic marketing plan and processes for identifying key marketing strategies to follow.
• Ensuring that a consistent brand message is communicated, with corporate usage guidelines for branding.
• Designing and producing promotional materials, printed and online.
• Developing sales leads and prospects.
• Creating an advertising plan, including setting goals, KPIs and budgets.
• Creating a public relations plan, including setting goals, KPIs and budgets.
• Creating a direct mail plan, including setting goals, KPIs and budgets.
• Developing and maintaining a customer database, and systems for communicating with your existing clients.
• Developing and maintaining a website.
• Analysing and tracking sales statistics:
• Continuously measure number and origin of all leads
• Measure conversion rate for each salesperson
• Measure your average dollar sale for every team member
• Keep a record of your profit margins.

Human resources
• Recruitment procedures, including job descriptions, position descriptions and recruitment methods and scripts.
• Training employees: initial induction programme and on-going training and development.
• Payroll process and frequency of payments.
• Systems for planning and managing leave, e.g. annual leave, sick leave, compassionate leave, etc.
• Career planning, performance reviews and pay reviews.
• Company vision and mission statement and culture.
• Company and individual team member goals and performance indicators.
• Conflict resolution and disciplinary procedures.
• Contingency staffing plans.
• Redundancy systems.
• Health and safety procedures and requirements, including emergency and evacuation procedures.

General operational systems
• Managing insurance needs and ensuring adequate coverage levels.
• Managing and storing records (paper records and computer data).
• Maintenance of equipment, including premises, plant, office, warehousing, computers, etc.
• Maintaining investor and shareholder relations.
• Information flow processes: internal and external.
• Ensuring legal security.
• Developing a business plan for planning and managing growth.
• Maintaining and designing telephone and electrical systems. Maintaining and upgrading office equipment.
• Planning permits and fees.
• Ensuring physical security of premises and people.

Seven steps to systematisation…

1. Identify all your processes. What are you doing on a regular basis that a lower-paid team member could be doing if it were systematised? Or is there anything in your business you hate doing, and would love to hand over to someone else?

This could involve any task, be it admin, sales, marketing, financial or operational in nature. Use the lists earlier in this chapter to identify all the different processes in your business.

2. Prioritise the processes to systematise. In most cases, it won’t be feasible to systematise every process in the business at once.

In that case, it makes sense to review the list of processes you’ve written and identify the priority tasks to systematise.

3. Flowchart your processes. This involves identifying each major step of the processes you’ve identified, and in which order these tasks happen. By putting this into a flowchart diagram, you’ll see how it all fits together in a very visual way. Don’t worry about going into too much detail at this stage, just write down the key steps.

A company manual makes it easy for anyone to join your business and get to work right away.

4. Document how it gets done. This is the detailed stage. Get the team member who is currently doing the job to write down every step in performing the task.

5. Test the documented steps. The person who’s written the steps in performing a task should then get a colleague to follow their instructions to see if they can do the job. If this colleague has to ask any questions, the team member who wrote the tasks initially should add these steps to the document. The idea is that a person totally new to the job can follow the written instructions without needing extra help or assistance.

6. Measure using key performance indicators (KPIs). Typically, these KPIs will be the top five measures that show system performance. These KPIs will relate directly to the KPIs of the person doing that role. For example, if it’s a sales process, KPIs might include number of leads; number of sales; average sales value; sales conversion rate, and so on.

7. Allow the system to change and grow. Any systems documentation needs to be a ‘living’ document, i.e. it should grow and evolve with the business. After all, things like computer programmes are always changing, so it follows that any system or process might need to change too. It’s up to you to ensure that your staff always keep the process up-to-date. Essentially, it is your responsibility to make sure that the systems are (a) being implemented, and (b) are relevant to the business.

Some final tips on systematisation

* Place someone in charge of the systematisation project. Start to flow chart the simple areas first.
* Don’t over complicate systems or people won’t follow them.
* Use lots of photos, videos, screen shots etc. with the description. This may be as simple as taking a computer screen capture or videoing someone doing the task. This will make the systems much easier to follow.
* Document your system in a policies and procedures or operations manual in an easy to access format. And make sure everyone knows where it is and references it regularly!
* Remember that your processes will need to evolve with your business: if not, the process won’t get used by your staff, and they’ll start improvising, and you’ll be back to Square One. Make sure that regular system upgrades are planned and documented in your corporate calendar.

You will be amazed at the improvements in your business when you start to implement systems and procedures.

What’s more, if you intend to sell your business in the future, you’ll be adding a lot of value by having all your processes systematised and documented as it will make life so much easier for the new business owner.

Key points from this chapter

* What kinds of things you can (and should) systematise.
* How to go about systematising your business.
* The importance of evolving your systems as your business changes and grows.

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Management

7 Safety Tips to Keep Your Workplace Injury-Free

safety

When we talk of workplace safety, the images that come into mind are mostly of construction workers hanging off high-rise buildings. The truth is there are hazards in any workplace, including office environments.

Thousands of employees fall victim of workplace injury every year. This has led to reduced productivity in the workplace, increased healthcare costs, and increased workers’ compensation claims, thereby having devastating effects on the injured employees as well as their employers. Here are a few things you can do to keep your workplace injury-free:

Wear Personal Protective Equipment (PPE)

PPE is essential in any working environment to protect users from workplace hazards. Note that different working environments require different safety gears. Some of the common PPEs include helmets, metal detectable gloves, slip-resistant shoes, earmuffs, hard hats, full-face masks, goggles, and much more. When worn correctly, these safety gears will significantly reduce the risk of accidents at your workplace. Be sure to check that they are in good condition before using them.

Keep Clean

A cluttered and untidy working environment is much more difficult to manoeuvre and more prone to hazards. Having a clean, organized, and clutter-free workspace can help avoid unnecessary hazards such as being hit by falling objects, tripping over scattered objects, slipping on wet surfaces, and so on.

Inspect Equipment before Operating

It’s important to do a complete visual inspection of all equipment before using them to ensure they are safe to operate. In case there’s an issue with the equipment, inform management about it. Remember to keep all inspection records to let other workers know about the equipment’s working condition.

Follow All OSHA/HSA/HSE Protocols

The law requires all employers to provide danger-free workplaces to their employees. Those researching long term disability due to work-related injury/illness should seek help from an attorney experienced in Social Security Disability law. There are several organizations that have been put in place to protect people in the workplace. For instance, OSHA/HSA/HSE protocols describe the methods that employers must use to protect their employees from hazards. Following these simple rules and guidelines can go a long way in keeping your workplace injury-free.

Report Any Hazard to Management

If you notice something that could potentially hurt someone, clear it up if you can do it safely. If not, inform your supervisor. Management is legally obligated to provide a safe working environment and will surely take care of any workplace hazards to ensure that. Both employees and employers should work together to find a long-term solution to prevent a similar unsafe condition from occurring in the future.

Store Hazardous Chemicals Properly

Hazardous chemicals need to be properly labelled and stored. Ask management if you are unsure where to store them. Chemicals such as gasoline are combustible and should be stored in highly ventilated areas. Failure to do so can put everyone’s safety at risk. Any spills or splatters made while working with hazardous chemicals must be properly cleaned right away.

Implement Emergency Procedures

Even with all the safety precautions in place, some accidents can still happen. It’s important to have an emergency management plan to prepare for the unexpected. All employees should practice emergency drills. Also, remember to update your office first-aid kit, as well as keep a few snacks and water for emergencies. This will mitigate the effects of an accident at the workplace like preventing long-term disability.

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Management

5 Tips For Managing Web Development Projects

data management

A web development project can quickly become a confusing mess if the right management technique is not used. Management is important to the success of any project, but with so many different aspects of site design coming into play, it’s important to streamline the design process so as to save time, and eventually money.

Here are five tips for managing web development projects that will do just that.

1. Communicate!

Communication is key to successful management. If management doesn’t communicate with the team or vice versa, the problems can become exponential. That’s why we’ve put communication at the top of the list.

Communication helps identify problems early on, set expectations and standards, and provide updates on the project. Communication within the team doesn’t only include the team members and management however, but also should include the clients.

You should keep your client updated as the project progresses with frequent communication via email, phone call, or even in-person meeting. The latter is probably the best way to go about communicating with your client, so you can show them how the project looks at each step of the design process and make edits as you go.

There are literally hundreds of digital communication tools you can utilize to improve team communication, from team management software to conference calling services. Whichever medium you choose, be sure to utilize it each day to improve your team’s collaboration and ensure everyone is on the same page.

2. Utilize Easy Sharing And Collaboration Tools

Sharing has never been easier with the advancement of cloud sharing services. It seems like cloud saving and sharing have become the staple of any digital service, from wireframe tools to team management apps.

Easier sharing eliminates the problem of lost files, hard drives, etc. The days of emailing and downloading files are just about gone, being replaced with the ease and security of cloud sharing. By sharing via the cloud, you’re providing a central place for your team to access important files related to the project, saving time.

Cloud sharing also makes keeping the client updated simpler. You can give clients access to the shared folder, so they can see the files as the project progresses, and even send instructions to the team via the cloud.

Overall, cloud sharing is the best way to share files among team members and streamline all of your sharing and collaboration. Centralizing these efforts into one location makes managing assets and team members much easier.

3. Use A Wireframe

A wireframe is probably the single best tool you can use to assist in managing a development team. This effective tool provides a roadmap for the project that both the team and client can utilize to make edits, suggest new additions, and view the design process.

When you make website wireframes, you’ll want to focus on the functionality and UX of the design rather than any visual elements. That comes later in the design process. A wireframe is simply a blueprint for the site, and therefore should be kept simple with greyscale and simple fonts.

Use your wireframing tool to coach the team in the direction of the project, and to keep the client updated. Both the client and your team will be grateful for the organization that a wireframe can add to a project, and edits are much easier when you have a workable interface.

4. Use Team Management Software

Team management software serves several different purposes. You can assign tasks and hold team members accountable for their assignments, share files and projects, and even collaborate in some cases in real-time via video or audio chat.

Team management software provides managers with an easy to use interface to track team efforts and communication. This is especially useful when managing large teams or remote teams that you otherwise wouldn’t be able to meet with in-person.

There are hundreds of different options for team management software, with many of the apps being web-based for easy access. While there are many free services, the best team management apps will come with a fee. If you’re serious about managing your team more effectively, these tools can be an excellent option.

5. Set Expectations From The Beginning

This may seem like a simple thing to do, but often managers will not set clear expectations for what they expect and are then unsure as to why the team isn’t meeting standards as a result. Clear and precise expectations can mean the difference between an efficient team and a clumsy one.

The best thing you can do as a manager is to set expectations in writing at the beginning of each project. Provide the client’s expectations for the final project as well as yours. Include attendance expectations, each team member’s role, and any other pertinent information.

When you set clear expectations, the team becomes much easier to manage. Everyone is aware of what’s expected, so you can pinpoint those team members that aren’t meeting those expectations and make the necessary adjustments where needed.

Conclusion

Team management isn’t rocket science. With good communication, clearly defined communication, and the right management and collaboration tools, you can effectively manage an efficient and productive team. Keep in mind that team members need their managers to be organized and respectful of their work. You need to earn the team’s trust and respect as their superior, and with a little communication and empathy, you’ll be on your way to becoming a great manager.

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Management

Lead the Way: 5 Practices for Successful Leadership in Your Company

Whether you’re leading employees in a large corporation, or you’re leading within your own small business, the same practices for successful leadership apply. Employees hold the responsibility to carry their own weight, but leaders have the role of guiding others down the right path – toward safety, productivity, efficiency, and integrity.

As the leader of a company, what can you do to help ensure employee safety? What habits might eventually become a threat to their safety? What skills can you put into practice to lead your team to success?

1. Lead by example.

No matter what type of company you run, leading by example will always remain the first priority for building a strong team that makes smart choices. When you set the bar for high expectations, your team will strive each day to meet them. Whether you’re on a construction site wearing proper safety gear and staying on task, or you’re in the office delivering a presentation, your team will look to you as an example.

2. Communication is key.

Growth in any relationship comes from mutual understanding and a desire to improve. When you learn to adapt your communication skills to each of your employees, transformation increases tenfold. Many interpersonal issues stem from a simple lack of communication or misunderstanding. Having open lines of communication means your team will trust you and be willing to put in the work.

3. Learn from your mistakes.

We all make them, and we can all use them as a guideline for improvement. Take note of things that haven’t worked for you in the past as a leader, and see if you can shift your perspective to create a solution.

4. Make conscious decisions.

Taking the time to pause before making any major decisions is wise for many reasons. A simple mix of instinct and logic is the perfect blend to back your choices. Your employees will see that you don’t make hasty decisions, and they’ll be inspired to think through issues of their own.

5. Help your team remained focused.

Encourage your team to stay on task. If your job requires manual labor or an onsite location with large machinery, make sure your team remains aware of their surroundings at all times. Not only does productivity increase with heightened focus, but safety increases as well.

If an employee is injured at work, always direct them to seek medical treatment. According to workers’ compensation lawyers in Raleigh, NC, these claims should be handled immediately following an injury.

Keep these 5 practices in mind to help improve your leadership skills and guide your team to success!

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Management

4 Important Logistics Trends to Consider

cloud computing

Businesses and other types of consumers need to be able to find the right logistical solutions. Taking care of a consumer’s shipping needs is absolutely important and there are many things to consider. Those who want to have the best possible experience should really think about current trends and where things are going.

Take a look at these four important logistics trends that you need to consider moving forward.

1. Green Logistical Solutions

Many companies are taking environmental concerns very seriously. Being able to implement green solutions into the structure of a business is very important. As per 3PL Link’s eco-friendly supply strategy, iIt has become a big trend in the logistical world recently . You will find that several large companies have begun to decrease the environmental impact of their operations.

As the world continues to turn away from fossil fuels, green solutions are going to become more common. Integrating new green technologies into the normal business processes is crucial. Some companies are making greater efforts to do this than others but the trends show that green logistical solutions are here to stay. It is important for the reputation of logistical companies and it can lead to benefits such as lowered supply chain costs.

2. Digital Logistical Solutions

Of course, digital logistics are among the most important innovations in the logistical space. The addition of digital logistical processes has really improved the process overall. It allows companies to have access to real-time data in order to keep track of shipments. This makes everything more efficient and improves communication between all parties.

One of the biggest reasons why the digital logistical tend is going to continue to be important is that it reduces the time to market. The improvements in technology have made it possible to do things more quickly. Being able to plan things out more efficiently leads to better logistical services. The innovation in the digital logistical solution sector is impressive and this will continue to become more important as the years go by.

3. Elastic Logistical Solutions

This is a logistical concept that involves being able to provide very flexible logistical options to consumers. This logistical approach is all about being capable of responding to the demands of any given situation. Companies are making use of cloud-based solutions in order to help adjust things properly. This helps with supply chain integration, improves overall visibility, and keeps things running on time.

One of the goals of the elastic logistical solution strategies is to ensure that customers have the optimal experience no matter what their needs are. By adding real-time supply chain visibility to the mix, it gives customers the chance to see what is going on with their shipments. Companies that can take care of logistical needs in an agile and adaptable way will be able to better meet the needs of consumers.

4. The Importance of Supply Chain Collaboration

Supply chain collaboration is actually starting to become a very important part of the process. Companies that are providing better service levels throughout the supply chain process are noticing increased growth and lower costs. This process can ensure that everything is being run as efficiently as possible while communication is kept up on all ends. It gives people a better idea of where their goods are while also keeping the costs low.

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Management

7 Tactical Tips on How to Disrupt an Industry

laptop

1,000 songs in your pocket.

That one slogan helps explain how a computer company (aka Apple) transformed the music business and sold 300 million iPods in the process.

People could now purchase their music online. Physical music stores became redundant. Online piracy was less of an issue. Lone songs were available at a fraction of the cost of whole albums. And hundreds of them could be transported on one portable device.

Disruption of an industry doesn’t get much bigger than what Apple achieved.

But how did they do it? How do some companies look at proud, old industries, and revolutionize them in line with their vision? Thankfully, you don’t have to be a Steve Jobs to make it happen.

Anyone with the right know-how can do it.

Keep reading to discover 7 tactical tips to disrupt an industry.

7 Ways to Disrupt an Industry the Easy Way

Sometimes you need to make a splash, cause a fuss, and mix things up. Here’s how to do it in your industry of choice.

1. Solve the Unsolvable

Every market has problems they haven’t been able to solve.

Then someone comes along, solves them, and voila, market disrupted.

Take Amazon as a prime example.

There wasn’t really anywhere to buy books online before Amazon. Book stores were struggling businesses, stuck in the dark ages. Then Bezos created an entire marketplace from buying them online.

Now the company generates over $61 billion annually and has 97,000 employees.

That’s the power of disruption you should be aiming for. Consider the problems in your industry and set about solving them.

2. Take a DIY Approach

That’s easier said than done, right?

Try taking a new approach to old problems. Why not look to make a splash in industries where you have no prior experience?

Previous experience in totally different fields can be exceptionally helpful. For instance, it may take a biologist to solve a physics problem or vice versa.

People usually say something can’t be done because they’ve been told as much. They’ve been reared on that belief and fulfill the prophecy accordingly. Someone new to the mix doesn’t have that negative mindset. They can see it clearly for what it is and set about fixing things.

Oh, and yeh, solve the problem yourself. We’re too used to paying someone to provide solutions. But the nature of unsolvable problems is that there isn’t anyone to do it. Scratch your own itch instead.

Need a company that’ll provide the requisite logistical support to succeed in your initial industry of focus? Create it. Make it happen, then use it to solve the first problem.

3. Break the Mold

Disruption of anything usually requires doing things differently.

To disrupt a quiet classroom you make a noise. To disrupt an industry you do the same. Look at what’s happening and actively push against it.

There will always be people and ‘experts’ with an opinion on your idea. You will probably be told you’re stupid, foolish, and absolutely incorrect in your approach. Take that as active fuel for your fire, as well as a clear sign you’re doing something right.

People generally don’t enjoy someone upsetting their current way of life. They’ll get annoyed, stomp and moan and throw a tantrum, telling you you’re wrong. That’s good news. Keep doing what you’re doing.

4. Move Fast and Make a Fuss

Speed is of the essence.

And so it the amount of noise you make.

Be a bull in a china shop when you enter your industry of choice. The metaphor of a bull is apt here. You need to be the business embodiment of one. Bulls don’t stop with an obstacle in their way. They don’t hesitate when they’re told they can’t do it.

Instead, they charge and break things at every turn. They’re one step ahead and out of earshot of the naysayers before anyone can wonder what happened.

5. Break the Mold

Did someone say ‘déjà vu’?

No, you’re not imagining things. We did include this above. And yes, it’s absolutely on purpose.

What was your first thought when you saw this subheading for the second time? Did you feel uneasy? Did you think it was wrong, or just downright stupid?

Good! We broke the goddamn rules. They get in the way and stop creativity in its tracks. That’s what you need to emulate as you set about disrupting your industries. Be crazy, and be creative. Be bold and break the mold.

6. Listen to Problems

Here’s a quick tip for idea generation.

Listen to the complaints of customers. What don’t they like? What do they wish they could do or see? What do they moan about?

Go to forums, read reviews, listen to podcasts and watch videos online. There are little golden nuggets of information around every corner.

Find out more about a product that’s addressed an issue and is disrupting an industry as you read.

7. Take Aim at a Target

Who is the industry leader in your field?

They may have ruled the roost for years. No-one else even tries to knock them off their pedestal. Until you came along. Remember, you’re a bull. Take aim and charge.

Targeting a competitor is like going to war. It’s a risky business. Win, and glory is yours. You stake your claim and immediately disrupt the status quo. Lose, and you’ll be laughed at and relegated to the history books…until next time.

Hyperbole aside, going into competition with an industry leader (with a competing product or service, etc) may be exactly what you need. It can help to raise awareness and cause a stir. Then it’s up to you to follow through.

Time to Get Disruptive

There you have it: 7 ways to disrupt an industry without an issue.

Some of the biggest companies in the world established their names through disruption of an industry. Like an athlete applying a whole new technique to an event, these companies, cause a ruckus that works in their favor.

This requires the ability to look at old problems with new eyes. It also requires the willingness to take a risk. Thankfully, with the right tactics, both are possible.

Hopefully, the information here has provided the ideas and inspiration to start disrupting your industries without further ado.

Did you like this piece? Click here to read all our posts about how to be innovative in business!

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Management

Two Smart Ways To Overcome The Problem Of Last-Mile Delivery

lockup

Right now, there’s something of an obsession with the concept of “last mile” delivery in the logistics industry. Companies have largely solved the problem of getting costs down for 99 percent of the journey to the customer, thanks to a combination of giant trucks and ships, but the issue of expense for the last mile remains. Why?

Last mile delivery is a little bit like bespoke manufacturing. Each customer lives at a different address, so you have to navigate your way to their home and unload the item manually. It pushes up costs, as single runs do in manufacturing, and means that delivery prices are much higher than they could be.

A new generation of entrepreneurs wants to deal with the issue of last-mile delivery using technological methods. The goal is to bring down the cost of last-mile delivery by an order of magnitude, making e-commerce a more attractive option.

Eliminating Risk

One of the reasons that last mile delivery is expensive is because of the risks involved. When truck drivers have to take new routes, they are more likely to make mistakes. As this truck accident lawyer points out, more than one in ten accidents on the road involve a large vehicle. The search is on, therefore, for methods that will eliminate risk in the last mile of delivery, cutting insurance costs and making things safer for workers.

The main innovation in this area right now is the delivery locker. Amazon already has a network of cabinets up and down the country where delivery drivers can deposit items for customers to collect at a later time.

The way delivery lockers works are simple. Customers order the goods that they want from an online retailer and select deliver locker as the delivery option. The retailer then sends the products out through its logistics network and delivers them to the locker, alongside deliveries for other customers for that particular day. Customers then get a code in their email, telling them what they need to punch into the console on the locker display.

Online retailers place delivery lockers in locations that their customers frequent on a regular basis, including gyms, banks, and other locations. The idea is to avoid the last mile of delivery by incorporating delivery solutions into customers’ daily lives. It’s a smart idea and one the industry will be tracking closely.

Route Optimisation

What else can businesses try to get the cost down? The second option is to use route optimization technology. It might sound simple in concept, but optimizing routes is a notoriously tricky mathematical problem. In fact, it’s so hard that traditional computers can’t do it.

The problem is that when you have more than, say, twenty deliveries to make, there are so many route options that it is hard to find the combination that will be the quickest. What you really need is a quantum computer. But until they become available, companies are having to make do with heuristic solutions – and fortunately, they’re getting better at it.

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