Paper-based dispatch seems like it works and you’re making all your deliveries, but what you are missing?
Paper-based dispatch, delivery and old barcode systems simply don’t have the tools to allow you to measure your logistics efficiency, and you can’t improve what you don’t measure.
With paper-based or old barcode systems, drivers are free to deliver in any sequence with no controls or automated recording of data. Here are some examples of problems you may not realize:
- Underutilized equipment – if you’re buying a new tractor or trailer but are dispatching on paper, you’re almost certainly not using your existing equipment efficiently. In dense delivery zones, we’ve seen customers lower their total transportation costs by 20%+ with route optimization. With better forecasting, we’ve seen customers utilize an additional 30% capacity of existing equipment. This means you have more equipment than you need to service your customers. The good news is, with a routing system you can avoid purchasing new equipment as your business grows. The bad news is without a routing system, you have no way of knowing what you are missing.
- Inefficient routes – you used 10 trucks @ 3000 miles. It should have been 9 trucks @ 2600 miles. Without a planning tool, you have no way to easily build and optimize routes. At $2/mile loaded transportation cost, that one day cost an extra $800.
- Overtime – trip took 9 hours – it should have been 7.45 hours. How do you know they took an extra hour of overtime? Because you don’t know what the planned time was or the actual sequence of stops. That extra hour cost $40 – and you never knew it.
- Product integrity and contamination – since drivers don’t scan a barcode to confirm product compatibility, there are no checks in place to ensure they don’t put gas in a diesel tank, bleach in an acid tank or 5W30 into a 0W20 Synthetic. If you’re lucky enough to catch the first or last, you can pump it out. The middle issue is a 911 emergency.
- Theft – tracking inventory and customer deliveries on paper or old barcode systems that don’t have current checks and balances makes it easy for drivers to short a few customers and sell product on the side. The more automated controls and electronic checks and balances, the more you can control theft. The tough part about bulk product theft is you never know you’re missing it unless a customer calls or you happen to get lucky. Small theft is a few thousand dollars and difficult to find. In a low margin business, it quickly hits the bottom line. The worst scenario is when a driver steals consistently and you have to go back to each customer they serviced, explain the issue and credit them. We could tell you about drivers who stole thousands of gallons of diesel by shorting a non-monitored tank by 700 gal each delivery….until the customer stuck the tank. Or the driver who shorted lubes deliveries and was caught only because a customer called to say ‘I think you have a bad driver’. Otherwise, they never would have been caught. Or the bleach drivers who shorted customers. Everyone believes their drivers are honest, and almost all are; however, it just takes one driver to rack up a LOT of theft.
- Customer service – do your customers call to find out when an order is scheduled, if the driver on the way or can you send me a copy of the receipt? This is a hidden but real cost. Using paper and old barcode systems, you have to wait until the driver returns to get copies of the paperwork or call the driver to check on status. You have no real-time visibility. You may think this customer service cost is part of doing business, but companies with integrated electronic dispatch and current mobile systems have a LOT less, and their customers appreciate the paperless delivery.
- Lost sales/customers – another customer service issue is losing customers. It’s too late to add electronic routing and delivery when a customer says they are going with your competitor because they’re electronic. The corollary is, you don’t know how many sales you may have won if you offered an email receipt as soon as the customer signs for the delivery. A number of our customers win business this way because customers know the driver/office does not manipulate the paper results after they sign…and it is a customer service benefit.
- Inventory control – when everything is on paper, it is too hard to manually transcribe to audit and paper/old barcode systems don’t provide adequate controls. For example, two drivers deliver to the same customer tank, but one says they delivered 1800 gal to a 1900 gal tank, and the next driver delivered 1875 gal to a 2000 gal tank. On paper, you have no way to track and control and one driver probably gave away an extra 75 gal of product. Electronically tracking what was loaded versus delivered (per customer, per tank) versus what is retained is the first step in better inventory control.
- Calculating delivery efficiency – if you don’t electronically timestamp when a driver starts/stops a delivery, then you’re relying on the driver’s honesty and accuracy. Without automated processes to record delivery info, you can’t calculate delivery efficiency. Why does one driver deliver 10 gal/min and another 25 gal/min at the same customer? What time did the driver actually arrive and depart? How long do they average per stop and per asset filled? We have a customer who had a driver who worked for them 10+ years and did all his own routes on paper. When they implemented our routing and mobile app, the driver was highly resistant so they continued to restrict his routes…moving from all nighttime deliveries to daytime. They still had issues so they fired him and assigned a new driver. His 8 hour routes were consistently done in less than 4 hours. They trusted this driver because he worked for them for 10+ years.
- Inventory visibility – if your dispatch is paper based or you have an old barcode system, you have no visibility into the current inventory on the truck. You can’t tell where a driver is in his route sequence, if he is onsite, on-schedule and more importantly what the current truck inventory is. When a call-in customer asks for an emergency delivery, your dispatcher has to call each driver to see what their inventory is, where they are in their route and if they can make an emergency delivery. You took the dispatcher and driver’s time, and then sent a truck that ended up costing an extra $200 in transportation costs. Many people say this is simply the cost of doing business, but companies with routing systems know the cost to service (even on call-in orders) and make informed decisions.
There are a number of other hidden costs as well as limitations with paper-based dispatch and old barcode systems. We hear lots of reasons for keeping the old processes.
- We’ve always done it this way
- We’re making money – always have – don’t have any problems
- We always have overtime – it’s just the nature of the job
- I trust my drivers. They would never steal or pad their time. They’ve been with me 15 years.
- We don’t have inventory issues
- I pay by the gallon so my drivers are motivated to be efficient
- Our routes are created by experts! All the knowledge is in my dispatcher’s head. They know the territory and all the delivery secrets.
- 10-20% retains are part of doing business. We do it to make sure we always service customers.
- I’m too busy to look at a new system.
- I don’t know how to interface to our accounting system so we probably can’t do this.
- My drivers won’t use a mobile app – they are comfortable with paper.
- Our 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!