How Businesses Can Deal With the Last Mile Issue: Suggestions from Ukrainian Volunteers
Updated: Apr 7, 2023
The business world has been plunging into a supply chain crisis. Its peak was during the coronavirus. It would seem that in 2022 it will disappear somehow, and all will go back to pre-pandemic times. Indeed, in some manner, that happened.
But another powerful wave, washing away the usual patterns of supply chain operation, became the war in Ukraine unleashed by the Russian Federation. Businesses have faced geopolitical changes and new challenges requiring a fresh approach to the supply chain organization.
One of the core issues this war has revealed in the supply chain is the last mile one. Usually, a software upgrade helps cope with it. But even the most intelligent digital product needs pre-settings of behavioral scenarios.
Here you read a few stories from Ukrainian volunteers delivering humanitarian aid across the country. They shared their experience on which scenarios for solving the last mile issue might be efficient.
Last Mile Issue in Delivery and Supply Chain: Key Details
What is the last mile issue?
Let’s remember what customers are used to when it comes to delivery? That's right - it should be fast and cheap or even free. They receive it when ordering a food delivery through services like Glovo or Uber Eats. Stores & restaurants are located several kilometers from the house. The cost of such delivery is minimal, and the time is limited to 30 minutes.
The issue arises when shipping is complex and consists of a few stages. Alaa Khamis, Ph.D., AI & Smart Mobility Technical Leader at GM, defines its last 11 miles or 17 kilometers as the most challenging for companies and clients.
According to Business Insider, "last-mile delivery costs are substantial — comprising 53% of the total cost of shipping." It means that door-to-door delivery is too costly. The reasons are the remoteness of some settlements and the lack of transport infrastructure there.
As seen, enterprises spend significant resources to ensure last-mile delivery. Suffering from it, some companies refuse door-to-door shipping, forcing customers to get to the nearest hub on their own. Such obstacles significantly affect the customer experience. So, this way, entities might lose both investment and clients.
What are the reasons?
The last mile issue has always existed. And it always had the same reasons: the above geographical peculiarities, as well as the lack of effective route planning, legacy supply chain management software, etc. But this year, it has changed a bit. Rather, the reasons that exacerbate this problem have changed. Among them:
supply chain challenges caused by COVID-19
a rise in fuel prices
disorientation of management because of the dynamic situation in the world
the invalidity of supply chain modernization strategies because of global, unexpected changes
shortage of goods and the necessity to establish new business relations (which means building new efficient shipping routes as soon as possible)
Now enterprises should cover these issues & reduce the negative impact of the last-mile problem in crisis conditions. Otherwise, their competitors will do it faster and leave them far behind.
How Companies Can Solve the Last Mile Issue: Borrowing the Ukrainian Experience
Flexible involvement of reliable third-party delivery services
Story # 1 by Victor
“Humanitarian aid delivery arises from the great desire to help somehow. For the first few days, we donated to Ukraine’s defenders. Then we understood that an impressive amount of Ukrainians around lacked food or clothing. We began to provide our friends and relatives with them. The next step was to expand the circle of suppliers and recipients. Two weeks later, our volunteer organization For Ukraine to Win processed requests from 7 battalions, several humanitarian groups, and the Armed Forces of Ukraine.
The main challenges of humanitarian aid delivery in Ukraine are:
dangerous conditions throughout all the territory
hard-to-reach regions to which the aid needs to be delivered
the human factor, which sometimes fails and leads to fraud
Fortunately, we are overcoming all these obstacles owing to a wide range of reliable people solving the last mile issue and delivering humanitarian aid to its destination.”
What lesson can businesses learn from it?
The only ones who can handle this problem for you are local delivery services that can get to hard-to-reach regions. Thus, companies should expand their partnerships with delivery services, choosing only the most reliable ones. Through agreements, you can reduce last-mile costs and get support from services that will deliver your goods in the way you would deliver them.
The proper route planning & optimization
Story # 2 by Dmytro
“Hi, I’m Dmytro, a radio host, stand-up artist, and volunteer. I am staying in Kyiv to help vulnerable sectors of society locally. It would seem that this is just one city - it's not a big deal. But countless roadblocks and traffic jams make the delivery difficult.
Every eve, I build my route for the next day and calculate the approximate time for delivery. Google Maps helps me a lot with it. It would be arduous for me to do without optimization since lots of people are in need.
I know the city well - it makes the process easier. But still, the proper route shortens my trip by a few hours.”
What lesson can businesses learn from it?
Supply chain optimization is vital. It could help companies cut costs, make shipping efficient, and cover a large area. Managers should apply robust software to cope with it. Due to this approach, an enterprise can reduce the last mile issue scale and improve customer experience.
Connection with all involved parties
Story # 3 by Sergiy
“We have a broad network of volunteers. Some of them collect donations and look for the necessary goods. The rest - collect orders for delivery. We are engaged in the supply of humanitarian aid and equipment from Poland to all Ukrainian regions.
Here, it is necessary to keep in touch with all the people involved: volunteers, drivers, and recipients. At the moment, the delivery service is dangerous. A force majeure can happen at any moment. Therefore, we are all connected 24/7 to report the slightest changes in the schedule or conditions.
We trust all the people with whom we volunteer. These are our relatives and friends, so we are convinced of their reliability. I have heard that other volunteers take pictures of humanitarian aid to track its delivery. It is handy practice because the volunteers can see the result of their work and know for sure that goods have been delivered to the intended destination.”
What lesson can businesses learn from it?
Continuous tracking and communication with involved employees allow managers to approach the organization and optimization of the supply chain properly. Companies use IoT devices and digital twins to stay abreast of all movements and conditions.
Collected data allows enterprises to identify issues and fix them, as well as create accurate predictions. Communication between involved parties can keep your audience loyal in a case when the last mile is beyond your power for some reason. Timely notification and transparency help companies retain customers.
The Final Line
As it turns out, we can find examples of perennial business challenges like the last-mile issue in daily routine. But most importantly, these situations can show managers obvious solutions that are extremely difficult to notice.
If you need help with the last-mile issue or supply chain optimization - drop us a line. Our specialists will apply their versatile expertise to accelerate the achievement of your strategic goals.