The dotcom boom was a big deal in the late ’90s, but perhaps even bigger was the ecommerce boom of 2020, largely owing to the COVID-19 pandemic.
As ecommerce grew by nearly 15% in 2021, so did the demand for competition in the logistics industry. A crop of on-demand, last-mile courier services sprang up around the world, and retail businesses needed to smartly choose their courier service.
The pandemic chaos has finally settled in 2022, but the need for reliable same-day delivery service has remained in many metro areas around the globe.
So, what’s the best way to create a reliable delivery service? Read on for our insights.
An overview of how retail ERP systems integrate with couriers:
The courier industry is highly fragmented and based on independent couriers that may or may not be part of an enterprise. To help address this, as companies may partner with several courier companies to serve different locations, ERP systems (Enterprise Resource Planning) have become an attractive option for sharing data between partners.
Typically, the ERP system is hosted on the retailer’s side – but even then, the retailer is not in the best position to manage the last-mile delivery process. Very few retail giants operate their own last-mile couriers, although it’s expected that by 2025, around 99% of retailers plan to offer same day delivery services through courier partnerships.
What an ERP to courier system ideally does is to enable companies to more efficiently keep track of inventory, manage supply chain operations, and automate processes to increase operational efficiency.
A good example of how an ERP to courier system should work is a UPS warehouse. UPS has invested heavily in advanced ERP systems to run their warehouse operations. This ERP system can be used to track inventory, automate supply chain processes, and manage the UPS supply chain. This allows UPS to more effectively control their inventory and improve their overall delivery efficiency.
- ERP systems typically integrate the following features:
- CRM (Customer Relationship Management)
- Business Intelligence (BI)
- Supply Chain Management (SCM)
- Inventory Management
For courier service partnerships to run them most efficiently, retailers must integrate courier services into their ERP systems, so that data is shared and managed between the retailer and courier services.
How can ERP systems be more efficiently integrated with couriers?
As outlined earlier, retailers are typically not in the best position to manage the delivery process.
Most retailers lack the internal resources and expertise to properly manage the complex delivery process. And because the customer experience is the biggest driver of sales in any industry, retailers have an incentive to control the last-mile delivery process.
By partnering with couriers, retailers can take back control of their delivery operations. By working with a courier company, retailers gain access to the last mile delivery expertise they would never otherwise have access to. They can centralize everything related to logistics, inventory management, and supplier management.
By leveraging the ERP system, retailers can optimize their delivery process so that their couriers are meeting delivery times and customers are satisfied.
One of the issues that might occur when working with courier companies is the integration between ERP and courier. One issue that can arise when couriers are integrated with an ERP system is if a retailer has a large number of courier service providers that are all using different systems. In this situation, the retailer would need to have an IT team in-house to manage integration issues.
This has proven to be a much more effective strategy than relying on a local courier service, as retail giants need to partner with larger courier companies, which have access to international delivery networks. The benefit of working with large, well-known couriers is that it is easier to manage the delivery process, while the couriers are also more likely to focus on quality and service.