Going from level 1 of the Bulk Distributor Maturity Model to level 2 is “found money”. Move from paper delivery tickets to basic automation to find hidden money in your logistics systems.
Most companies using paper delivery tickets have now embraced them. However, switching to a mobile app is similar to the transition retailers made years ago when they replaced “price stickers” with barcodes and integrated barcode scanners at their registers.
In retail, no one questions the need of cash registers and scanners. However, bulk distributors still find it acceptable to hand a driver $10,000 worth of products and ask them to write down what was delivered so they can bill it.
Mobile logistics apps are comparable to cash registers for retail stores. They serve as an investment and, like cash registers, ensure standard processes while providing visibility into key delivery metrics.
5 Ways Money Can be Reclaimed by Mobile Logistics Apps
- Invoice Processing – On average, processing a manual invoice costs between $12.90 to $15.00, and can even reach up to $40 for some cases. However, with automated invoicing, the cost drops to just $3.50 per invoice. If a driver writes 6 invoices daily, this results in a weekly savings of around $360. By going mobile, you eliminate the need to process and re-enter paper invoices, saving valuable time spent on manual processing.
- Route Compliance – When drivers use paper, they complete orders in any sequence. There is no visibility into the time to service, start times, end times, order sequence, and order status. However, with a mobile app, drivers receive a planned schedule with clear time and distance details. This increased visibility leads to a higher compliance, resulting in 5-15% reduction in total transportation costs. By going mobile, you not only save on costs but also eliminate the need to process and re-enter paper invoices manually.
- Shorten Order to Cash (OTC) – Switching from paper to electronic invoicing eliminates the need for manual processing and enables faster invoicing by 7-10 days. Some ExxonMobil customers have experienced the ability to invoice buyback accounts the day after the transaction, compared to the average 21days. The shorter Order to Cash (OTC) process has a positive impact on Days Sales Outstanding (DSO), which represents the average time it takes for invoices to be paid. For instance, if you have access to an investment with a 5% return and maintain an average receivables balance of $2 million, reducing your DSO by 10 days would result in saving $100,000 per year.
- Inventory Control – Using mobile apps, you can track the quantities of materials loaded onto trucks and match them against customer deliveries, ensuring you always know the inventory level on a truck. If the quantity retained at the end of the trip does not match customer deliveries, the driver must account for that discrepancy. While mobile apps may not completely prevent theft, they serve as monitoring tools, alerting you to any misappropriation. Improved inventory control can effectively prevent theft, potentially saving up to $100,000 per year from just one driver. By tracking hose flushes, comparing load versus delivered variances, and verifying tanks to avoid over delivery, conservative estimates show a detection of variances of 5 gallons per day. At $10 per gallon, that adds up to $300 per week. Without mobile technology, it’s difficult to determine how much you might be losing.
- Product Integrity – By scanning a barcode on each tank delivery, drivers can ensure the product they are pumping matches the tank and last product delivered. This protects against any product integrity issues, whether you are facing them weekly or quarterly. Even with just one issue per year a year, using the app can save you $5,000 per incident alone in remediation costs, assuming there are no legal costs related. Discover how are mobile app reduces product integrity by using 3-way match.
Benefits of Mobile Logistics Apps
There are many softer benefits to going mobile. The ability to email a delivery receipt means customers perceive more professionalism and accuracy, and don’t have to worry about discrepancies between the paper ticket they signed and what the billing clerk enters on the invoice.
Here are some other benefits, beyond cash savings, that increase customer focus and provide operational visibility:
- emailed proof of delivery receipts
- real-time truck location and inventory reporting
- customer notification of pending deliveries
- add/change orders on an active route
Going mobile should be an intuitive decision. With just a few days for relatively simple set-up, the results can be a 10x cost-savings versus paperless delivery and routing. Accelerating the Order To Cash (OTC) process, avoiding re-keying mistakes, reducing contaminated deliveries with barcode verification, building a tank database to forecast orders, and having visibility into your delivery metrics lays the groundwork for data-driven logistics.
For a typical fuels and lubricants distributor, the conservative business case can be pretty compelling. Using the data above, a 10-truck operation could save more than $500k/year.
|Invoice Processing||$17,280||6 invoices/day/truck|
|Route Compliance||$5,760||30 mins & 10 miles/trip|
|Inventory Control||$14,400||5 gal/day @ $10/gal|
|Product Integrity||$5,000||prevent 1 issue/yr/truck|
|Shorten OTC||$100,000||applied across ALL trucks|
|TOTAL – 10 trucks||$524,400|
goRoam Mobile App for Bulk Distributors
Our goRoam mobile app for bulk distributors can help you find money that is hidden in your logistics system whether you have an existing legacy mobile app or are still using paper. Interested in knowing more? Contact us to have someone walk you through what this would look like for your company.