Relying on paper-based dispatch might seem effective, but what are you missing out on?
Paper-based dispatch and outdated barcode systems lack the tools to measure logistics efficiency, and without measurement, improvement is impossible.
With paper or old barcode systems, drivers can deliver in any sequence without controls or automated data recording. Here are some issues you might not realize:
Underutilized Equipment
If you’re buying new tractors or trailers but still using paper for dispatching, you’re likely not using your existing equipment efficiently. In dense delivery zones, customers have lowered their total transportation costs by over 20% with route optimization. Better forecasting can lead to utilizing an additional 30% capacity of existing equipment. This means you might have more equipment than necessary. The good news is that a routing system can help you avoid purchasing new equipment as your business grows. Without it, you won’t know what you’re missing.
Inefficient Routes
Using 10 trucks for 3000 miles when 9 trucks could cover 2600 miles is a costly inefficiency. Without a planning tool, routes can’t be easily built and optimized. At $2/mile for transportation, this inefficiency can cost an extra $800 in a single day.
Overtime
A trip taking 9 hours instead of the planned 7.45 hours results in untracked overtime. Without knowing the planned time or actual stop sequence, you can’t monitor extra hours, costing $40 per hour without notice.
Product Integrity and Contamination
Without barcode scanning to confirm product compatibility, there are no checks to prevent mistakes like putting gas in a diesel tank or mixing incompatible chemicals. Such errors can lead to emergencies or significant financial loss.
Theft
Paper-based or outdated barcode systems without current checks and balances make it easy for drivers to short customers and sell product on the side. Automated controls reduce theft. Minor thefts, unnoticed, can quickly impact the bottom line in a low-margin business. Major thefts, like a driver consistently shorting deliveries, can lead to significant losses and damage customer trust.
Customer Service
Customers calling to check order status or request receipts add hidden costs. With paper or old barcode systems, you wait for drivers to return with paperwork or call them for updates. Companies with integrated electronic dispatch systems have reduced customer service costs and enhanced customer satisfaction.
Lost Sales and Customers
Customer service issues can lead to customer loss. It’s too late to add electronic routing when a customer leaves for a competitor with better technology. Offering immediate email receipts can win and retain customers by providing transparency and efficiency.
Inventory Control
Paper systems are too cumbersome for effective auditing. For example, discrepancies in delivery records between drivers can lead to undetected product loss. Electronic tracking of loaded versus delivered quantities provides better control.
Calculating Delivery Efficiency
Without electronic timestamps, you rely on drivers’ honesty for delivery times. Automated processes allow you to calculate efficiency accurately, revealing performance discrepancies and enabling improvements.
Inventory Visibility
Paper-based dispatch offers no real-time visibility into truck inventory or delivery status. Emergency deliveries become costly due to the need for manual checks. Routing systems provide the necessary visibility to make informed decisions and reduce costs.
Reasons for Sticking with Old Systems:
- “We’ve always done it this way.”
- “We’re making money; we don’t have any problems.”
- “Overtime is just part of the job.”
- “I trust my drivers; they wouldn’t steal.”
- “We don’t have inventory issues.”
- “Drivers are motivated by per-gallon pay.”
- “Experts create our routes.”
- “10-20% retains are just part of doing business.”
- “I’m too busy to look at a new system.”
- “We can’t interface it with our accounting system.”
- “Drivers prefer paper.”
- “Customers like paper.”
If any of these reasons or problems resonate with you, we should talk. Let us help you understand what you’re missing. Contact us!
