Key Takeaways: If you have decided to develop a last-mile distribution center, it requires careful planning, analysis of the local market, and consideration of logistics & transportation infrastructure. Efficient inventory management and order fulfillment processes are essential to meeting customer demands and ensuring timely delivery. Location is crucial when developing a distribution center, and proximity to major transportation routes and urban centers can help reduce delivery times and costs. The international market of last mile delivery is expected to rise from $108.1 billion in 2020 to around $200 billion by 2027. The significant growth factor of this is the increasing number of online shoppers. However, the last mile delivery process is the most challenging part of the supply chain. The growing demand for same-day delivery has increased the demand for last mile distribution centers and the issues that come with that. So, businesses seeking to get a competitive advantage are focusing on creating these centers strategically. Although businesses running last mile delivery are able to find a center near their customers, they need planning to surpass challenges. If you’re wondering how to create a last mile distribution center to fulfill orders in a proper way, this blog will guide you. Table of Content Understanding Last Mile Distribution Centers Step-by-Step Guide to Creating a Last Mile Distribution Center Advantages of Using Upper Route Planner FAQs Conclusion and Next Steps Understanding Last Mile Distribution Centers Definition and importance Last mile distribution centers are facilities used to directly deliver packages to a customer’s doorstep. They are the closest hubs from a customer’s address, set up to ensure customer satisfaction. The process is known as last mile delivery that can help reduce a lot of inventory carrying cost in the entire supply chain. These facilities store final products before they’re packed and collected to fulfill customer orders. They can also be referred to as fulfillment centers or specialized last mile warehouses. Last mile distribution centers are essential parts of the supply chain as they help deliver orders with accuracy and at low costs. Many retailers create and manage their own distribution centers, whereas others tie-up with third-party logistics (3PL) providers. Key components and layout Storage areas: Designed to hold final products until they’re ready for dispatch. Packing zones: Dedicated spaces for packaging items based on customer orders. Loading docks: Points where goods are loaded onto vehicles for delivery. Technology systems: Includes software for tracking inventory, managing orders, and optimizing routes. Step-by-Step Guide to Creating a Last Mile Distribution Center When thinking about ways to reduce last mile delivery costs and improve efficiency, you need to start from site selection. If you wish to construct new distribution centers, you must know specific design requirements. Here are the tips to develop last mile distribution centers for a faster and efficient package delivery: Step 1: Zoning code interpretations and compliance Understanding zoning laws Last mile centers are typically placed within an optimum delivery range of 7 to 9 miles. However, finding warehouse spaces in customer-centric areas with traffic-friendly routes can be challenging. Key zoning considerations include: Interpreting zoning codes for industrial or commercial zones. Allocating designated parking spaces for fleet vehicles and loading areas. Ensuring due diligence before engaging with local officials. Common challenges Businesses often face issues like limited availability of suitable sites, building size restrictions, and parking space design challenges. Many companies mitigate these challenges by analyzing the zoning of existing last mile facilities, such as FedEx or USPS locations, for inspiration. Step 2: Location-market association Choosing the right location Even if a site is available, it may not suit every market. For example, courier service delivery requirements differ from food delivery needs. When selecting a location, consider: Specific demographics. Customer income levels. Accessibility and delivery turnaround time. Compatibility with delivery vehicles and methods. Retailers tailoring last mile operations for niche markets like groceries or medical supplies should ensure the site aligns with these requirements. Step 3: Consulting experts Local officials and consultants E-commerce growth has heightened the pressure to deliver faster. Consulting expert teams can help evaluate ideal sites and zoning constraints. Local officials can clarify zoning district requirements and occupancy use categories, making them valuable allies in the planning phase. Industry feedback Feedback from businesses with similar facilities can provide insights into overcoming operational hurdles. This can include testimonials or case studies of successful last mile distribution centers. Step 4: Operational layout and constraints Designing efficient flows Understanding and addressing site constraints like drainage, wetlands, or floodplains is vital. A planned vehicle flow system, mapping vehicle movements in and out of the site, reduces traffic conflicts and optimizes deliveries. Integrating advanced technologies Modern distribution centers integrate technology for efficient operations, such as automated traffic management and route optimization systems. Step 5: Efficient material handling Tools and techniques Retailers must coordinate internal material handling systems with vehicle access points. Stocking analytics should drive systematic order grouping, enhancing efficiency. Key areas like workstations, lockers, and cafeterias should align with material handling requirements. Automation opportunities Automation in material handling can reduce human error, prevent damage, and improve efficiency. Examples include conveyor systems and automated picking tools. Step 6: Implementing automated machinery Types of automation Businesses transitioning to advanced delivery models can use automated material handling systems (AHMS) for efficiency. Types of automation include: Robotic picking and packing systems. Automated storage and retrieval systems. Cost-benefit analysis Although AHMS may be costly initially, they save money by reducing errors and improving productivity. Advantages of Using Upper Route Planner Starting a new facility or running an existing one needs a tonne of operations, people, equipment and delivery management processes. You can have a team to handle all the in-house tasks or automate them with advanced technological solutions. But, if you are still using the age-old routing methods, you may have to bear additional supply chain costs. Upper route planner makes route planning and related tasks smooth, so you can focus only on driving profits. Here are a few reasons why you must give it a try: 1. Optimizes routes in seconds With Upper route optimization software, you can let go of manual work and find cost-effective routes in a few minutes. In case a driver is unavailable, you can instantly assign the same route to another available driver. You can also organize route plans in advance and relax while your drivers are successfully delivering orders. 2. Plans multiple routes Do you have packages piled up for different routes and have no way to fulfill them? Worry no more. You can now schedule multiple delivery routes effortlessly. Upper helps you create effective routes that can be distributed among your delivery drivers. 3. Fulfills additional orders Whether you are running a meal delivery business or have a center to deliver medical supplies, Upper helps you deliver them faster. With optimized routes and faster deliveries, your drivers will have extra time to deliver more parcels. You can accommodate more stops with every route and fulfill more orders. 4. Boosts profits If you are wasting a lot of fuel transporting products to crowded urban areas, you are reducing the chances of growth. Upper lets you assign optimized and cost-effective routes. As a result, you can ensure customer satisfaction and boost revenue at the same time. 5. Proof of delivery Any last mile delivery company wants their customers to get timely deliveries. With the feature to collect delivery proof; drivers can take e-signatures, click photos, and make notes. It boosts accountability and customer experience as you remain informed about the task completion. Explore more about using Upper and make your last mile delivery operations automatic by signing up for a 7 days free trial today! Make Superfast Last Mile Deliveries with Upper Start making orders available to customers with routes optimized in seconds. Let Upper be your buddy in optimizing routes and making superfast deliveries. Try Upper for Free Frequently Asked Questions (FAQs) What are micro fulfillment centers? These are small fulfillment centers that can cater to online orders along with local store pickups. Many retailers, like those with grocery stores, are using such facilities as only a few people have time to visit the shop. Being near to their consumers aids them in delivering orders from stores. They also use automated systems and robots to manage micro fulfillment centers with ease. What is last mile logistics? The delivery of product from the closest distribution facility to the end user is known as last mile logistics. E-commerce giants like Amazon have already grown in the last mile logistics, small businesses are still taking a competitive advantage. What are the challenges in last mile logistics? One of the problems is navigating through the traffic while making product deliveries to urban customers. Other challenges in last mile logistics include: Driver shortage Capacity of delivery vehicles in case of larger packages Low availability of technicians for assembly or uninstallation Lack of route planning and optimization Inefficient business planning Conclusion and Next Steps With the growing demand for online orders, businesses can make the most out of this time and shoot up their revenue. So, if you are wondering whether to start your own facility, the above tips may help you start your journey. You may still need other tools and strategies to set it up. While you are stuck at making last minute deliveries, take the benefit of Upper Route Planner. Features like one-click dispatch, route scheduling, proof of delivery, API integration, and more help take away the extra burden. Start using Upper Route Planner and enhance the customer experience in your business. Try the 7 days free trial today. Author Bio Rakesh Patel Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more. Share this post: Tired of Manual Routing?Automate routing, cut down on planning time, dispatch drivers, collect proof of delivery, send customer notifications and elevate your team’s productivity.Unlock Simpler Routing
