How leveraging technology can drive supply chain efficiency

Globally, the idea of selling directly to consumers is still nascent but it will soon become the new frontier in retail and manufacturing.

According to a survey by Brandshop in 2016, 90% of US consumers prefer to buy goods directly from the manufacturer if they could. Globally, the idea of selling directly to consumers is still nascent but it will soon become the new frontier in retail and manufacturing. We already see a trend where giant multinationals are acquiring platforms selling directly to consumers and experimenting their own direct to consumer models. Examples include Unilever which acquired Dollar shave club for $1 billion to enable them to be part of the direct to consumer play and Proctor and Gamble who are currently experimenting with a subscription model by selling Tide pods directly to their consumers through a customized platform.

Why is this happening? Consumers are demanding better experiences and customer service from companies. Use of intermediaries makes it difficult for companies to control their brands’ relationship with consumers, and to directly collect and respond to consumer feedback. Selling directly to consumers enables a brand to better control consumers’ journey and gather more detailed insight to improve product and customer experience.

For manufacturers, direct to consumers models can be a hard row to hoe. Despite the fact that selling directly to consumers comes with a lot of benefits, manufacturers would still like to maintain their relationships with their distributors as they play a key role in the sales process. However, manufacturers need to start appreciating the pivotal role of technology and the opportunities that come with technology and start taking over their customers’ buying experience, communication and collect insights that can be leveraged on to improve the customers’ experience as well as the products. Some of the benefits that come with selling directly to consumers include; reduced warehousing costs, higher margins, controlled customer experience and real-time consumer data analytics

Getting down to the brass tacks, this shift cannot happen overnight and it is still important to appreciate the role that distributors, wholesalers and retailers play in reaching potential customers. Dealing directly with consumers may be like a fish out of water for the manufacturers and they may not be willing to go out on a limb on this. However, manufacturers can start by adopting a model commonly known as Direct to Store. The direct to store model enables manufacturers to deliver products directly from their own warehouses to the retail stores hence eliminating the need to rely on the existing warehouse and distribution networks. To execute this model seamlessly, logistics can be a fly in the ointment given that there are daunting challenges in the existing infrastructure. Improving logistics could involve leveraging technology to enhance logistics capabilities and streamline the processes. The Direct to Store model enables the manufacturers to establish a closed loop network from their warehouse to various retail outlets while making multiple stops.

How can manufacturers establish a direct to store model? The first step is to analyse the current retailer stores in the value chain. Understanding their demand value and the frequency of orders will enable the company to forecasts the demand as well as optimise the delivery schedule and route plan to ensure that the customer needs are met on time. Due to the multiple stops, loss of goods could be a risk and therefore proper tracking and delivery confirmations are crucial in curbing losses. With Technology, the manufacturing industry is ripe for this sea change and this is the right time to start testing ways of controlling the consumer journey. Manufacturers may decide to build the technology and the logistics capabilities in-house or outsource the logistics operations to technology companies like Sendy, which is a technology platform that connects businesses to all vehicle types enabling them to place delivery orders through the platform real time, track their orders and deliver to multiple destinations.

Does this model make sense for all manufacturers? The strategic objectives of the organization determine whether the model should be prioritised. For example, If the manufacturer values control of deliveries especially when delivery windows are tight or if direct contact with retailers is a critical element to customer satisfaction, then the model would be ideal in helping the organization meet these objectives.

What does it take for this model to work? An optimized customer experience and operational efficiency are the key success factors for the Direct to Store model. This involves real-time visibility of the deliveries, smart real-time alerts in case of any problems and end to end unified control of the whole delivery process. Technology plays a crucial role in driving effectiveness and efficiency in logistics operations with the aim of establishing a competitive edge with a rapid ROI hence enabling manufacturers to get a bigger bang for their buck.

Article by Priscilla Muhiu, Head of Marketing, Sendy Ltd.

Delivery platform Sendy signs up over 5,000 businesses across Kenya

The leading Kenyan delivery platform Sendy has now partnered with over 5,000 businesses by connecting them to motorcycles, pickups, vans and trucks on the platform, in a bid to help them optimize their logistics while saving on their operational costs and time spent on doing deliveries internally.

Safaricom, Multichoice, Mall for, Bidco, Chandarana, Kenafric, Davis and Shirtliff, Auto Express, Good Life Pharmacy,Toyota and Highlands are among the businesses that are now using the platform to handle end to end deliveries of their products making it cheaper and efficient for the businesses to run their logistics operations. The platform also enables the online sellers to deliver to their clients hence supporting the growth of the upcoming online businesses.

Motorbike delivery costs KSH. 250 up to the first 7KM, a van KSH. 2,250 up to the first 5KM while a truck ranges between KSH.5,900 and KSH. 12,599 up to the first 20KM based on the truck size. The platform has a feature that enables customers to place one order and add up to 9 multiple destinations hence reducing the delivery cost by up to 70%.

In a statement, Sendy CEO Meshack Alloys said that uptake of delivery services through their platform is an indication of there being a clear need and demand for technology-enhanced delivery services that enable businesses to save on time through end to end seamless deliveries while significantly reducing businesses operational costs if outsourced.

“Having businesses embrace our platform is a great achievement as we seek to get more clients on board. Backed by technology, Sendy connects businesses with over 1,000 partners real time on the app. This saves a lot of time for businesses whose core focus is not logistics, relieving them off operational procedures that happen conventionally when doing deliveries. We cater to different business segments including Corporates, SMEs and e-Commerce, giving us a huge portfolio of business clients seeking our services.

With the logistics industry gaining traction in the country, Sendy has formalized the informal transport sector by offering a platform where motorcycle, pickups, vans and truck drivers can have ready demand backed by technology making moving of goods from one point to the other simpler. Through the platform, a customer is now able to track movement of their packages to the point of delivery in real time. Furthermore, all the packages delivered through the platform insured on transit to the destination.

“ We have enhanced the platform with various features to make it even easier for customers to use Sendy. Not only can customers track their packages in real time when on transit, those who have more than one package can now use just one Driver to deliver packages to the various destinations. This feature is important to our small and medium-sized business customers who need to do multiple deliveries to multiple clients.” Mr Alloys added.

Sendy, a Kenyan technology platform that was started in 2014, connects businesses with Drivers to make delivery simple for its customers. With over 50,000 individuals and 5,000 businesses, Sendy seeks to increase the number of partners on their platform as demand surges.