10 Ways to Lower Delivery Lead Time
Thinking of jumping on the faster delivery bandwagon? Read on to learn how to reduce your delivery lead time.
Looking to deliver goods to your customers faster? Start using Circuit for Teams.
The faster your customers get their orders delivered, the happier they are.
Seems straightforward, right?
Fast and reliable deliveries are now an important factor when it comes to customer satisfaction in eCommerce.
Most businesses measure their delivery efficiency using a metric called
average delivery lead time.
But what exactly is it? And how can it help you measure your delivery efficiency?
Delivery lead time is the period between when a customer places their order and when they receive it.
It can also be the amount of time between when you place an order with your supplier and when you receive the finished products.
Knowing your average delivery lead time allows you to keep your customers informed and satisfied.
When a customer orders something from your site, they receive an estimated delivery date. This lets them know when to expect the delivery, saving them the frustration of blindly waiting for it.
As for you, keeping track of your delivery lead times can help you understand your last-mile delivery system’s success.
Long lead times should, of course, be a red flag. But what exactly can you do to help them?
Here are 10 ways to lower your total lead time when making deliveries.
1. Eliminate any unnecessary processes
If you run an online business, you likely receive several types of orders.
Some might need special storage or faster deliveries, while others might not.
Delivering all of these orders together can quickly become inefficient.
You can solve this by separating different types of orders and eliminating unnecessary processes.
For example, instead of running a separate quality assurance (QA) process (where your employees check whether each package is correct and in good shape), ask your supplier to run one before delivering everything to you.
Then, you can run special checks only for bigger, more expensive, or fragile orders at your facility. This can help you get your usual orders out much faster.
Or you might switch to assisted warehousing systems where automated machines stamp and label each package for you.
This can save your employees the hassle of figuring out which category a delivery falls under and labeling it.
As a result, you’ll sort and send out packages quicker.
Remember, the goal should be to reduce your cycle time as much as possible. This includes pre-processing time, downtime, inspection time, and shipping time.
Monitor these metrics and streamline any process that consumes too much time.
2. Only work with reliable suppliers
Your suppliers are a key part of your supply chain.
While focusing on last-mile delivery lead time is important, monitoring your supplier manufacturing lead time is just as important.
What is that?
As the term suggests, supplier delivery lead time is the period between when you place your purchase order with a supplier and when they finally deliver it to you.
It’s important to work with reliable suppliers with a reasonable delivery lead time.
We encourage you to build close working relationships with suppliers you know will have your back in case there’s a shortage or surplus in customer demand.
Simply put, work with your suppliers to develop a healthy relationship where they’re willing to make you and your business a priority and deliver to you on time.
You’ll also want them to have your back in case you face any sudden problems due to natural disasters, human error, or any other procurement (gathering goods) inefficiencies.
3. Choose vendors wisely
It’s also important to choose your vendors wisely.
Apart from charging or paying you a fair price, the vendors should be located close to one of your warehousing locations.
Reducing the delivery distance can help reduce your delivery lead time and save on transportation costs.
Having vendors at an accessible location also makes it easier for them to make returns or order a surplus whenever needed.
Choose from three types of order fulfillment strategies: order self-fulfillment, third-party order fulfillment, or a hybrid strategy.
4. Rethink inventory levels
Good capacity planning is an important part of inventory management.
But what exactly is capacity planning?
Capacity planning is the process of figuring out how much stock you should have in your warehouses or storage spaces.
Having too little requires that you constantly reorder, which can increase your delivery lead time.
While waiting for each small lot of stock to arrive isn’t always feasible, neither is having too much of it in storage and taking on risks.
Having too much stock in one place makes it more susceptible to damage and theft, and perishables like fruits, vegetables, or fish can go bad if they’re not sold within a certain timeframe.
This is why we use just-in-time (JIT) procurement methods.
Use your inventory turnover ratio — a measure of how quickly you sell out of your inventory and replace it — to decide how much stock you should ideally have at any given time.
5. Cross-train internal employees
Cross-training is the process of training employees in tasks that other employees typically handle.
For example, you can cross-train an accountant to better understand a purchase manager’s role.
This can help them understand the supply chain and determine if the retailer (in other words, you) is paying more money than needed.
Cross-training, of course, doesn’t need to be too detailed.
The employees should just have a good idea of what people in other departments do.
For example, you can train supply-chain managers to understand delivery routes better.
If the manager knows the best delivery routes and which vehicles to pick for delivering certain types of packages, they can oversee the sorting process and make it quicker.
Similarly, you can cross-train drivers to handle some customer service responsibilities.
6. Prioritize internal communications
Internal communication is essential for any company.
When everyone is in the loop, the entire supply-chain workflow becomes more transparent and faster.
When employees are aware of the bottlenecks that can come up in the next stage of the process, they can change their own processes.
For instance, a supplier running out of stock for a certain product can potentially halt the supply chain.
However, if the supplier lets you know in advance, you can think of alternatives or sell other products at a reduced cost.
You can also inform your delivery and warehousing teams so they can cut down on processing and do other important tasks in the meantime.
7. Incentivize better service
Offering incentives to external suppliers and internal employees can help you improve your delivery service.
Incentives give people motivation to work better and produce better results for you. At the same time, they also help you build better, more fruitful professional relationships.
Here’s what they might look like:
- You can have your own small team pick up deliveries from facilities that are close to your warehouse. This can help the supplier reduce their delivery load and focus on delivering the rest of your products faster.
- You can incentivize good driver and warehouse staff performance by giving them monetary bonuses. As for drivers, you can set up a system where a small tip is automatically added to their payroll every time they deliver an order before a certain time.
- You can also buy more stock from your suppliers if they’re willing to make returns or urgent orders easier for you when needed.
8. Automate routine processes
You can use intelligent programs to automate routine processes like sorting and labeling packages, QA on important packages, and supply chain management.
These programs can check what’s in each package and label and sort them without any human help.
The programs can even log each package into your system once they’re ready to be sent out.
You can also set up inventory triggers that automatically notify vendors or suppliers every time stock is too low or ready to be sent out for sale.
9. Rethink transportation methods
One of the reasons for a high delivery lead time might be your shipping methods.
Shipping large stocks of products or raw materials in several small vehicles can be inefficient due to the chances of a vehicle breaking down or getting stuck in traffic, or a driver taking a longer route to your warehouse.
Instead, you might want to try freight shipping — shipping large volumes of stock in one or two big vehicles.
Freight shipping makes tracking your supplier deliveries easier for you and your supply chain managers (since they’re all in a big truck).
Imagine ten small trucks delivering products from your supplier to your warehouses.
Those ten vehicles can break down or get stuck in traffic.
A freight truck, on the other hand, is a single, well-serviced vehicle that you’ll monitor throughout the way.
And you might be able to save costs by sharing freight containers with other nearby businesses.
Just make sure that this won’t affect your total order lead time.
Whether you should switch to freight shipping depends on how well your current methods work for you, your production process, and how much stock you expect to carry at a given time.
10. Reduce transportation time for faster deliveries
Delivery management software like Circuit for Teams can help you get ahead of the curve and make faster, more efficient deliveries.
Our routing software does everything from helping you with capacity planning and gathering customer notes to delivery route optimization.
With Circuit for Teams, your drivers are always updated with the least-congested routes so they can make faster deliveries and help you reduce your delivery time.
The importance of a short lead time
Here are a few ways having a shorter lead time can help your business:
- Shorter lead time means your drivers spend less time on the road, helping you save on fuel costs. It’s simple math!
- Shorter lead time also means faster deliveries, keeping your customers satisfied and coming back to you.
- Shorter lead time also helps reduce the risk of inventory going bad due to being warehoused for too long. A shorter lead time allows you to deliver more perishables (like flowers and food) in time.
- A short lead time can help prevent employees from working under stressful, time-intensive conditions. This leads to much better employee morale and higher productivity.
The bottom line
Monitoring lead time is an effective way to understand a delivery chain’s efficiency.
Longer lead times can be bad for your business because they cost valuable time and money and leave your customers dissatisfied with your service.
Fortunately, Circuit for Teams can help automate delivery-related tasks like capacity planning and route optimization so your team can make faster deliveries.
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