Going paperless: The secret to boosting delivery performance
By Sunil Mathew
The construction site is a hive of activity with multiple moving parts and interdependent activities requiring precise synchronization. From excavation, framing and metal works, to millwork, drywalling, roofing and more, contractors are faced with the daunting task of coordinating many moving pieces throughout the project lifecycle, including the management of subcontractors, fabricators, material suppliers, and specialty equipment suppliers.
With contractors coordinating schedules, trades, and deliveries of materials and equipment to the job site, the logistics management of a building project becomes a serious challenge, especially when the scale and complexity of the project escalates.
The Supplier Connection
Given that construction jobs are closely governed by time, resource, and budget constraints, contractors need to be able to rely on suppliers to deliver materials when and where they’re needed. Although price is a differentiating factor in the home building supply industry, in today’s competitive landscape, the primary objective is service.
Whether purveyors of plumbing, electrical or HVAC equipment or distributors of lumber, roofing or landscaping materials, suppliers must ensure delivery of the accurate count of the correct items, in good condition, to the right location at the requested time—no easy feat when juggling multiple customers and job sites.
Operating an efficient supply chain is a relentless challenge for home building suppliers. Consider a large housing development with multiple building sites and various trades awaiting equipment and materials for their particular jobs. Suppliers must grapple with multiple variables that impact their ability to achieve DIFOT (delivery in full, on time), including short lead times on orders (often less than 24 hours), tight delivery windows, variable weather conditions, and custom requests, among others.
In addition, different regions have unique delivery needs; contractors in Texas may prefer to frontload work into the early morning to avoid the midday heat, for example. Different materials have specific loading and unloading times and require distinct types of trucks and off-loading equipment. Without effective logistics management to coordinate the myriad variables in the complex delivery process, productivity decreases, costs escalate, time commitments are not met, and, ultimately, customer service suffers.
Technology Drives Performance
Leading home building supply companies are recognizing the inadequacy of traditional manual practices in managing the delivery challenges of the dynamic and highly-mobile construction industry. To keep pace with contractor expectations of on-time performance, suppliers are turning to technology and mobile solutions to automate the supply chain and optimize last mile delivery.
1. Real-time delivery route planning
Conventional paper and clipboard-based routing is inefficient, time-consuming, and error-prone—a serious impediment to providing a high standard of customer service. Technology, in contrast, transforms traditional route planning, shifting the ability to plan deliveries, schedule appointments, optimize routes, and communicate with drivers to a completely paperless environment. With automated, intelligent route planning, suppliers improve on-time performance, capacity utilization, and contractor satisfaction while driving down their transportation costs.
Plus, integration with suppliers’ other company systems, such as order management (OMS) or enterprise resource planning (ERP), automatically captures data at order entry for routing efficiencies of Return Materials Authorizations (RMAs) and material conditions, and to ensure accurate counts of the correct materials for satisfied customers.
After implementing a route planning solution, lumber and building materials distributor US LBM increased on-time delivery to 95% and improved performance by as much as 35% at many locations. Yard personnel are notified via text message 45 minutes before trucks return, allowing time to stage material. In New Jersey, one of the company’s busiest markets, the team reduced turnaround times to 25 minutes—a 30% reduction.
2. Dynamic delivery appointment scheduling
In the construction environment, appointment scheduling is driven by numerous factors beyond the control of the supplier, such as changing contractor demands, crew or resource availability, inventory requirements, and weather issues.
With dynamic appointment scheduling, suppliers have both visibility into the impact of unforeseen variables, plus the tools to make adjustments on-the-fly and communicate details in real-time to all stakeholders.
3. Real-time updates on mobile devices
In order to manage crews effectively and keep construction projects on track, contractors need to know what materials are arriving when at job sites. To this end, leading distributors are using mobile technology to improve the performance of their delivery team by providing contractors with real-time visibility into the status of work site deliveries, including automated exception notifications.
Drivers access delivery schedules using a mobile device; real-time GPS data is used to track truck location, estimate travel time, monitor appointments, and keep contractors up-to-date throughout the day.
Mobile technology also drives performance gains on the supplier’s sales front. The sales team has instant visibility into what facility or yard is shipping an order, where that load is coming from, the anticipated time of delivery, and what material is on each load. On the inbound side, contractors can contact the sales team with a single click and place orders from an itemized list of materials with anticipated delivery times.
4. Mobile proof of delivery (POD)
Missing signatures, lost paperwork, illegible details, and time-consuming claims disputes between suppliers and contractors plague paper-based POD. With mobile devices, drivers can wirelessly confirm deliveries and other details in real-time. Mobile POD, enhanced by picture and signature-capture functionality, makes it easy to verify that the right materials, in the correct quantities, were delivered undamaged at the expected time.
Removing paper from the equation facilitates immediate processing, faster invoicing, and better cash flow. With electronic POD, invoices are approved in a fraction of the time and end-of-day reconciliations and returns processing is far less time-consuming. And because drivers collect information more efficiently, paperless POD gets them back out on the road faster to meet other delivery commitments, even building up to more deliveries per day.
From a claims management perspective, mobile POD minimizes disputes, streamlines the resolution of claims, and mitigates fraudulent claims. Indeed, building supply distributor US LBM saved tens of thousands of dollars with better delivery claim resolution. In addition, mobile POD technology reduces the costs and labor associated with paper-based practices, such as multi-part invoicing and the resources dedicated to processing, imaging, and storing paper documents.
The power of mobile technology in the construction industry, like many distribution-intensive industries, lies in its potential to help companies leverage the supply chain as a competitive weapon. Using technology to achieve a streamlined, paperless supply chain helps building materials distributors to meet the strict delivery expectations of contractors—even in the high-intensity summer months—while minimizing transportation and labor costs. And by focusing on driving efficiencies through last mile delivery operations, home building suppliers can ensure an exemplary customer experience.
Sunil Mathew is Director, Industry Strategy, at Descartes.