How to Use Last Mile Data to Cut Costs & Improve Delivery
Learn how to use last mile data, metrics, and analytics to reduce costs, improve delivery efficiency, and drive smarter logistics decisions.
In today’s competitive landscape, last mile logistics remains one of the most complex, costly, and visible aspects of supply chains. For fleet operators, logistics managers, and businesses reliant on efficient deliveries, the challenge lies in transitioning from gut-based decisions to data-driven strategies. A recent webinar on last mile math shed light on the transformative power of leveraging metrics and analytics to optimise operations, cut costs, and future-proof fleet management systems.
This article explores the key takeaways from the webinar, focusing on how data can unlock operational and strategic insights. If you’re looking to reduce inefficiencies, boost customer satisfaction, and achieve sustained growth, read on to discover actionable strategies.
What Is Last Mile Math?
At its core, last mile math refers to the analysis of all factors involved in last mile delivery - from vehicles, drivers, and customer orders to telematics and operational metrics. The idea is to quantify performance, identify inefficiencies, and make informed adjustments to improve outcomes.
Without this data-driven approach, last mile logistics often operates like an art form, relying on intuition or historical practices. However, with the right tools, last mile logistics becomes a measurable science, enabling businesses to uncover inefficiencies and optimise operations. As the speakers stressed: "If you can’t measure it, you can’t manage it."
From Operational Insight to Strategic Decision-Making
The webinar distinguished between two types of insights derived from last mile math:
1. Operational Insights:
These deal with day-to-day performance, focusing on metrics such as route compliance, time window adherence, mileage deviations, and vehicle utilisation. Operational insights allow businesses to take corrective actions in real time, preventing inefficiencies from scaling into costly problems.
2. Strategic Insights:
Strategic insights involve long-term planning and scenario modelling. They enable businesses to simulate changes, such as consolidating depots, modifying delivery windows, or adjusting fleet sizes. This forward-looking approach ensures better resource allocation, improved ROI, and alignment with growth objectives.
Combining these insights fosters a culture of continual improvement, helping organisations excel in both daily execution and long-term planning.
Real-Life Applications of Last Mile Math
The webinar highlighted several compelling case studies that underscored the tangible value of last mile data. Here are a few examples:
A Parcel Delivery Service Tackles Failed Deliveries
A company struggling with failed deliveries discovered recurring issues: customers not being home, missing signatures, or operators delaying deliveries in low-volume territories. By tracking these patterns through last mile data, the company adjusted workflows and policies, resulting in higher delivery success rates.
Cultural Transformation Through Metrics
A commercial water services company used last mile analytics to identify top-performing drivers and standardise best practices. They launched a reward system for high performers while providing targeted coaching for underperformers. This strategy fostered accountability and improved overall delivery reliability.
Reducing Costs with Route Compliance
A distributor dealing with rising fuel costs and delivery delays applied route compliance data to identify inefficiencies. Drivers frequently deviated from optimised routes, leading to excess mileage and delays. After retraining drivers and reoptimising routes, the company saw a 12% reduction in fuel consumption and delivery punctuality rise to over 95%.
These examples demonstrate that last mile math can tackle diverse challenges while delivering significant ROI.
Harnessing Strategic Insights for Long-Term Growth
Beyond operational improvements, scenario simulations can guide high-stakes decisions. Consider the following scenarios from the webinar:
Optimising Fleet Size Without Sacrificing Service
A company operating 11 delivery routes considered adding a new vehicle to handle increased demand. However, simulations revealed that by reoptimising their routes, they could reduce fleet size from 11 to 6 vehicles while cutting mileage by half. This approach saved nearly £145,000 annually in operating costs and allowed the company to redirect resources into growth initiatives.
Depot Relocation for Network Efficiency
A property services company leveraged simulations to determine ideal depot locations. By testing different scenarios, they consolidated facilities, improved route efficiency, and ensured scalability for future expansion - all based on data rather than assumptions.
Avoiding Overinvestment in Fleet Upgrades
A food and beverage supplier planned to replace all 25 vehicles as part of a fleet upgrade. After analysing route density and vehicle utilisation, they realised they could achieve the same service levels with just 15 vehicles. The 40% reduction in capital expenditure was reinvested into automation and staff training.
How to Get Started with Last Mile Math
Implementing last mile math doesn’t require perfect data. The key is to start with what you have, define clear metrics for success, and refine your approach over time. Below is a step-by-step guide to begin leveraging last mile insights:
1. Collect and Analyse Data
- Gather data from existing telematics, driver logs, and delivery records.
- Don’t wait for flawless data; even incomplete information can uncover patterns.
2. Define Your Metrics
- Identify what success looks like for your business. This might include:
- Reducing fuel consumption
- Improving on-time delivery rates
- Minimising vehicle downtime
3. Leverage Tools to Identify Gaps
- Use visual dashboards to compare planned versus actual performance. Tools like route optimisation platforms can highlight trends and inefficiencies.
4. Run Scenario Simulations
- Model what-if scenarios to test changes before implementation. For example:
- How would consolidating depots impact delivery times?
- What happens if you trim your fleet?
5. Adopt a Continuous Improvement Mindset
- Use insights to make incremental changes and track progress over time.
- Regularly revisit and refine your metrics and processes.
Key Takeaways
- Last mile logistics is a science, not an art: Metrics and analytics turn complex logistics into manageable, measurable processes.
- Operational insights drive immediate improvements, such as fixing route deviations or enhancing driver punctuality.
- Strategic insights enable smarter investments, from depot relocation to fleet size adjustments.
- Small changes, big impact: Simple adjustments to route compliance can save thousands in fuel costs and improve delivery reliability.
- Data doesn’t need to be perfect: Start with available data, use it to uncover trends, and refine your approach incrementally.
- Scenario modelling mitigates risk: Test potential changes in advance to make confident, informed decisions.
- Customise your metrics: Focus on what matters most to your business - whether it’s reducing mileage, improving on-time rates, or cutting operational costs.
Conclusion
The potential of last mile math is undeniable. By harnessing the power of data, businesses can move beyond subjective decision-making and instead rely on measurable insights to optimise operations, reduce costs, and set the stage for sustained growth. Whether you’re tackling daily inefficiencies or planning long-term investments, a metrics-driven approach ensures that every decision contributes to operational excellence.
As fleet managers, logistics professionals, and business leaders, the time to embrace last mile analytics is now. With actionable insights and continual improvement, you can turn the last mile into a strategic advantage.
Source: "Webinar - Data, Metrics & Analytics in Last Mile Logistics" - Route4Me, YouTube, Jan 1, 1970 - https://www.youtube.com/watch?v=_G9VRUKS9-0
Use: Embedded for reference. Brief quotes used for commentary/review.