Early this week one of my colleagues at the SCMAP Secretariat bought a phone charging pad online. She had it delivered to our offices, cash on delivery, as is standard with most online retailers these days. The transaction between her and the courier went well: the payment was made, the product was given, and we’re off. It took less than five minutes.
It was when she began to open the package when things started to go slightly south. She got the wrong product: she was delivered a power bank instead, a really bulky one. Upon notifying the retailer, she was asked if she was okay to go to their store instead to have the item exchanged.
“Bakit kaya ako nagpa-cash on delivery?” she told them.
Our collaboration group on last mile—one of seven, as revealed during Supply Chain Outlook last January, part of our thrust to push the country’s supply chain industry forward—is working on a couple of events, including our next General Membership Meeting in exactly a month’s time. (We’ll have more details in the coming weeks.) As such, for the past few weeks I’ve had last mile logistics in my mind.
But then it’s not just about last mile logistics. That’s the thing we see often: the delivery services, the couriers, the ones actually bringing the products from a store or distribution center to the customer’s home or office. But there is much more going on behind the scenes—in warehouses and back offices and, increasingly, servers and bits of code—and without them the transportation side wouldn’t be able to offer more for customers.
The surge of interest in the last mile is mostly enabled by technology. With the infrastructure finally in place—widespread connectivity, devices that pack the power of a computer in your hand—it was up to businesses to ensure it works well for them and for the customers. This is how we are able to track the products we order from the moment we click “buy” to the moment we receive it in our doorstep. This is how we are able to easily pay for products without having, in some instances, to bring out our wallets. Moves to become more responsive to the needs of its customers—a need emphasized by the advent of new retail models—have led to more advanced warehouse management systems, accurate tracking platforms, and more new approaches on the supply chain side, coupled by the steady rise of cashless payment systems.
Technology has also allowed the entry of a new breed of logistics companies, providing both merchants and logistics providers with new tools at their disposal, from easy hiring of delivery vehicles (running the gamut from motorcycles to closed vans and, critically, cars and passenger vans, perhaps to circumvent traffic regulations) to other support systems such as contact centers—another critical plank as supply chain realizes its role on the front lines of customer service.
No wonder 30% of all logistics costs go to last mile delivery. We’re familiar with the storage and distribution side, at least the larger picture; we’ve gotten to grips with planning and procurement. We’ve found many ways to make efficiencies and improvements on those aspects. The last mile is a new world, and there are a lot of opportunities for innovation. You might think of the big companies of the world, the Amazons and the Ubers, are on the forefront. The situation in the Philippines is different, however: with Amazon not yet at our doorstep and Uber pondering pulling out of the country entirely, it’s up to a different set of players to do so.
And considering the wrong delivery my colleague received early this week, there’s a lot of room not just for improvement, but also for innovation —one that’s not just flashy (think of Amazon’s drones) but suitable for the Philippine setting, and hopefully enhances the customer experience. Who can take the lead? The big players—logistics, retailers, telecoms—are doing their part, but smaller players outside of the obvious urban areas can, too. Logistics providers in the provinces are uniquely positioned to even better serve their patch, and I imagine national players would want to tap their expertise, particularly as the importance of collaboration in supply chain becomes even more obvious. (They can’t do everything and be everywhere, after all.) Size isn’t a hurdle, too: technology is a great equalizer. But can they take advantage?
SCMAP North Luzon Kapihan Session: If you’re reading this column early this morning, and you’re near the Xenia Hotel in Clark, Pampanga, why not go to the first Kapihan Session by our North Luzon chapter? BOC district collector Maritess Martin will discuss new customs regulations affecting the region. Attendance to the event, which starts at 8am, is free, but breakfast is on your account.
Henrik Batallones is the marketing and communications executive of SCMAP. A former board director, he is also editor-in-chief of the organization’s official publication, Supply Chain Philippines. More information about SCMAP is available at scmap.org.