Gremlins in the network: How to find, and oust, the hidden costs in your delivery system
As anyone who has ever run a delivery transport fleet can attest, certain mysterious forces can work against you.
Let’s call these forces ‘gremlins’, a word popularised among aircraft pilots who blamed these mischievous creatures for causing malfunctions. But, in delivery transport, gremlins most often wreak havoc via hidden costs.
These hidden-costs gremlins can become difficult to find and difficult to eliminate once they become entrenched. Worse, the hidden-cost gremlins will grow if ignored, as they continue to feed on your company’s profitability unimpeded.
How can they possibly be found and eliminated? First, start by understanding how they sneak in and inflate your transport costs.
Gremlins like gaps in your knowledge
Do you know exactly what your delivery transport is costing you? I mean, really costing you. Knowing the actual cost of your delivery transport fleet is a vital starting point – without it, your door is wide open, inviting the gremlins in to run amok.
These gremlins specialise in small cost anomalies and grey areas that can be easily overlooked and misunderstood, but when combined may add significantly to your overall transport investment.
Closing the gaps in your knowledge is possible, and may be aided by technology. Even experienced fleet managers can be shocked about what is revealed under technology’s cold gaze, via a fleet x-ray where the true costs are shown. Fortunately, the shock is short lived, because knowing your true costs provides opportunity to clear out these gremlins and shut the door on new ones taking hold of your business.
Gremlins like gaps in your resourcing
Getting the balance right can be tricky, as many delivery transport fleets involve a combination of owned and outsourced resources – though in many cases smart companies effectively ‘insource’ a whole team, which can work efficiently if you partner with a good supplier.
Typical gaps in resourcing include a lack of adaptability or flexibility – not being able to increase resources or scale back at short notice. Also, consider issues around your fleet makeup: has an unexpected breakdown thrown your fleet out of whack? Then the gremlins are having fun with you.
Or, do you have a delivery vehicle being under-used? An unused vehicle is still costing you and eating into your profitability.
Other resourcing issues, which are a classic invitation to hidden-cost gremlins, include how easily absentees are replaced. For example, if you need to pull someone from a different part of the business, or end up doing the deliveries yourself, then hidden-cost gremlins are laughing.
Another keen resourcing question to ask is whether or not management is routinely wasting time on chasing up delivery transport-related issues. It could be the mix is just not working for you. It takes some courage and perseverance to understand wasted management time, but while it may be difficult to measure, it’s a classic hidden-cost gremlin at work.
Gremlins like lack of accountability
Missed, damaged or late deliveries; drivers needlessly doubling up on routes; company vehicles being used for personal use; inadequate proof-of-delivery procedures; using couriers to fill in when your fleet is stretched.
Unless you find a way to promote more accountability into your business, the hidden-cost gremlins will work their way into these seemingly small issues, and will eventually spew forth substantial additional costs for your business.
Gremlins hate technology
Telematics technology is now more widely available. Importantly, gremlins hate it, because telematics allows you to be more accountable, to track deliveries and drivers, inform your customers, and aid with proof-of-delivery.
Too many delivery fleets treat their telematics systems like a gym membership – they sign up with great enthusiasm only to drop off three months later, as interest wanes. This plays into the cost gremlins’ hands.
Technology also allows transport fleets to be proactive rather than reactive, by tracking vehicles and anticipating maintenance schedules with greater accuracy. This reduces the opportunity for gremlins to cause vehicle problems just when you don’t need them (though an efficiently-run fleet will have access to replacements quickly). The same proactive approach can apply throughout logistics, not just maintenance.
Technology’s many benefits are often found beyond the bottom line. Technology should improve delivery times but also lead to increased professionalism and more accuracy in delivering items in full, undamaged and on time. This may take time to track as a measurable ROI.
The message is to be vigilant: without sustained attention to your delivery transport the gremlins will run amok and you can easily find the costs get away from you.
Written by Walter Scremin, Ontime Delivery Solutions CEO.