The Role of AI and Automation in Delivery Management

Introduction

If you closely track the emerging technologies in the supply chain industry and delivery sector— smart lockers, drone deliveries, real-time slot booking, you will find one thing in common. They all harness Artificial Intelligence (AI) and automation to resolve major delivery challenges. 

The first wave of analytical AI, now succeeded by the rise of Generative Artificial Intelligence (Gen AI) has unlocked newer thresholds of operational efficiency in logistics. It also helps orchestrate faster, reliable, and personalized deliveries, helping you provide customers an experience that customers value and reward. 

Moreover, the benefits of using AI and automation in supply chain operations is no more than speculation. As McKinsey highlights, early adopters of automation in logistics in 2021 have benefitted with a 65% increase in service efficiency and 15% reduction in costs. It contributes greatly to the vitality of supply chain operations.

So, if you are looking to scale up your delivery processes with AI and automation, this article will give you valuable insights about what to implement. Let’s begin. 

How is AI Transforming Delivery Management?

AI unlocks data-driven decision making and automation in processes using both analytical and generative models. Businesses use AI models to process historical supply chain and business operations, from procurement to delivery. They use tools like robotic process automation, natural language processing, and leverage AI algorithms to perform tasks.

For instance, AI technologies help in demand forecasting to track inventory levels. Further, optimizing routes remains a major use case in inventory procurement and delivery management. These systems simplify complex data sets in the supply chain to ensure timely deliveries and accurate delivery updates to customers.

However, the advent of GenAI has unlocked multiple other avenues for automation in logistics and supply chain that facilitate better delivery outcomes and quality control.

8 Ways AI and Automation Optimize Delivery Management

Artificial Intelligence led automation not only makes routine tasks easier with auto-pilot to save time and money but augments customer experience. We’ve listed 8 strategies you can adopt to elevate your deliveries with AI. 

1. Dynamic EDD Prediction

In a survey by DHL, nearly 40% of customers around the globe revealed that having a precise delivery time would improve their delivery experience. Estimated delivery dates critically impact whether your customer completes a transaction and remains informed to receive the delivery. 

However, having EDD forecasting with 90%+ accuracy is difficult. This is where AI steps in, supported by machine learning algorithms. Using data mining and data science models, you can automate EDD prediction for partnered logistics companies and predict with a great deal of accuracy the most probable date and time of delivery. 

AI also makes EDD prediction a dynamic process—adjusting dates according to delivery conditions and supply chain obstacles. With the right tools you can decide if the EDD you display points to a specific date or range of days. 

Take for example, a popular apparel store on Shopify- BeYours. It uses ClickPost’s ML-led EDD prediction to dynamically display EDD to customers. In return, it recorded an increase in their customer conversion rate and 66% increase in positive customer ratings.

2. Advanced Route Planning

Planning the optimal delivery routes before and during a delivery sprint plays a big role in keeping logistics related transportation costs in control, not just limited to fuel consumption. Amazon highlights the benefits of this innovation the best. It achieved the impressive feat of delivering 2 billion shipments on the same day or the next in the holiday season rush in 2022.

It leveraged its in-house AI-powered route optimization program ATROS to charter optimal routes as soon as the customer clicked ‘Buy Now’ for an item. This smart algorithm has become an intricate link in Amazon’s big plan to regionalize fulfillment centers, cut shipping costs, and deliver faster to shoppers. These are just a few obvious benefits of optimizing delivery routes.

You can do the same with your supply chain using predictive algorithms for analyzing data on traffic patterns. This finds you the best route factoring in order priority, delivery window, road conditions, traffic, vehicle capacity, etc. This will improve your on-time delivery record and lessen idle time, and proactively adjust routes for multi-stop deliveries. 

3. End-to-End Shipment Visibility

Tracking and tracing orders throughout the delivery cycle is a major constraint that plagues many eCommerce shippers. The use of legacy technology and fragmented data systems makes it excruciating even for logistics players to connect all their nodes. 

But AI-driven automation, laid with the groundwork of APIs, webhooks, IoT sensors, RFID tags, etc. create seamless linkages in the ecosystem. This includes warehouses, distribution centers, retail outlets, carriers, forwarders, etc. 

With an AI-led delivery management system you can have an integrated view of your entire logistics chain. You improve visibility across supply chain processes like customs clearance, quality checks, proof-of-deliveries. Meanwhile, it enhances order tracking as its location changes by the minute en route to customer address. 

It also keeps you updated on changes in inventory levels, order fulfillment state, shipment location, and even shipping delays. This real-time data tracking, again enabled by automated technologies, is the cornerstone of delivery efficiency and supply chain management.

4. Intelligent Order Allocation and Scheduling

Automation sets up a system that self-executes your shipping operations. Imagine the impact you can create if you streamline your logistics to ship orders the same day you receive them?

Without automation, it would take on average 2.5 days just to get the shipment ready to be dispatched. But, when 63% of global customers want next-day delivery, there is no place for slow shipping. 

Automation however helps you streamline core shipping tasks. It helps you align orders with the right carriers, auto-generate your entire documentation trail, and schedule pickups for warehouse appointments. Machine learning algorithms can also help determine the best carriers based on specific criteria.

When you fast-forward these tasks, you ensure the shipments are ready to be shipped on time to reach customers the next day. You can also predict future demand, supply chain & market trends, and customer needs.

5. Demand Forecasting Inventory

AI leverages predictive analytics and machine learning to interpret scores of historical data. This is one of the best ways to forecast demand for what customers would want and in what quantities. This is very important for inventory management and supply chain operational efficiency.

Demand forecasting is not a small feat to achieve even with economical and statistical tools, let alone pouring over sales data for the past 12 months. However, artificial intelligence is better equipped to deal with market uncertainty and rapidly changing customer expectations 

It can foresee long-term trends and short-term seasonal demand scenarios with an astuteness that keeps inventory near demand centers. This facilitates faster shipping, so you can improve delivery times while reducing operational costs, a key advantage in a competitive market.

Gen-AI led demand forecasting algorithms have further broadened forecasting ambit for new products. It can predict market fit for new products even from qualitative consumer and market data. Reduce costs through other external factors like risk assessment, warehouse operations, and predictive maintenance of demand fluctuations.

6. Personalized Customer Communication

Customers gravitate towards personalized communication and services—at least 81% of them as this survey by Shep Hyken illustrates. To master the art of personalization, you’ll have to tailor services, marketing campaigns, and communication to every individual customer.

This requires a thorough examination of customer interactions and purchase history, and accomplished easily with AI. When it comes to delivery, alerting customers at every milestone of their order journey, giving them live tracking takes the centrestage.

With real-time tracking and personalized post-purchase communication, led automation and AI you can retain them longer. 

7. Real-Time Delivery Risk Management

All of your efforts in increasing your sales goes to waste if they aren’t delivered on-time. Delivery failures, stuck shipments, fake deliveries, missed deliveries can lead to customer churn and costly returns. However, it’s exceptionally challenging to understand when and which shipments run the risk of RTO (Return to Origin) without proper visibility. 

But real-time tracking and a comprehensive view of your entire delivery system solves the problem. Automation, especially with a delivery management software having multiple courier partner integrations offers you integrated insight. 

For example, ClickPost’s automated solution signals you as soon as an order  faces the possibility of being delayed. It proactively alerts both you and the customer, and by relaying this information helps prevent order cancellations.

8. Algorithmic Decision Making

AI has the strongest use case in fostering informed decision making with in-depth and critical perspectives of not only deliveries but your entire supply chain. AI is adaptable to all handling various data formats. It is also imbued with speed and accuracy to examine vast amounts of data, from the start of when a delivery is scheduled till it is completed.

It establishes a streamlined approach to understanding delivery information. It constantly tracks key metrics like first attempt delivery rate, order accuracy, average cost per delivery, RTO%, etc. It aligns your business objectives with the KPIs you want to achieve. This way you can make sound decisions on allocating the right amount of resources and partner with the right services. 

ClickPost: Driving Innovation Through Automation in eCommerce Logistics

There is a huge economic potential in efficiently deploying automation in delivery management, apart from the overall positive impact in your eCommerce growth. 

ClickPost is a leader in integrating automation with delivery management.

Conclusion

There is no doubt that AI and automation are revolutionizing delivery management. Apart from saving your time and cost, it also enhances customer experiences and customer satisfaction. Embracing these technologies is no longer a choice, but a necessity to thrive in the competitive eCommerce industry.