Your Guide to Service Delivery Model in Logistics

“Every company’s greatest assets are its customers because, without customers, there is no company.” — Michael LeBoeuf, American author and former management professor.

This quote perfectly encapsulates why exceptional customer experience is critical to business success, especially in logistics. In an environment where timely deliveries and efficient service define your brand, ensuring high-quality service delivery is non-negotiable.

A well-structured service delivery model becomes indispensable to meet these demands and maximize profitability.

In this blog, we’ll explore a service delivery model, how it applies to logistics, and the essential steps to implement one for your business. We’ll also explore how route optimization software can enhance service delivery, ensuring smooth operations and satisfied customers.

Let’s get started.

What is a Service Delivery Model?

A service delivery model is a framework to deliver products or services to your customers.

This model outlines all the methods, approaches, and strategies for efficiently delivering products or services to customers by your company’s goals and objectives. 

Moreover, it focuses on ensuring continuous interactions between you and your customers, using advanced technology solutions, and improving operational procedures to ensure reliable and cost-effective delivery while adhering to quality standards. 

If you consider it in the context of logistics, it can be considered a strategic framework that helps streamline logistics processes, from creating routes to dispatching them and tracking their progress or collecting evidence of delivery or service completion. 

Understanding the Importance of a Service Delivery Model in Logistics

In logistics, it is crucial to deliver products to the right address at the right time. 

An effective service delivery model helps achieve this by helping you use people, processes, and technology effectively.

It helps you:

• Establish clear roles and responsibilities to avoid confusion and manage work efficiently
• Define processes like route optimization, dispatch, driver tracking, customer communication, and delivery documentation to streamline delivery management
• Implement tech solutions like route optimization software that helps ensure accurate and timely deliveries through route optimization, driver tracking, and communication with customers to enhance end-to-end delivery management

6 Steps to Creating a Service Delivery Model in Logistics

A service delivery model in a delivery or field service company emphasizes meeting customer expectations and delivering value to them.

The following are the steps to apply in the field of logistics:

1. Define roles and responsibilities

To begin with, you must define key roles in your company based on your business structure, specific needs, and the industry you are in.

Below are the four prominent roles that you may find in almost any logistics business:

• Route planners: They are responsible for creating optimal routes for drivers, techs, or agents, to reduce their time and distance traveled and maximize their daily efficiency.
• Dispatchers (or dispatch managers): They are responsible for dispatching efficient routes to on-field employees via SMS or emails and tracking their progress. 

Note: Sometimes, a single person can handle route planning and dispatching responsibilities, especially in small-sized companies with budget constraints. 

• Delivery drivers or service agents: These are the employees who are on the field, following schedules and assigned routes to complete delivery and service tasks.
• Customer support team: This team handles customers’ queries and offers support services to address their concerns via multiple support channels, including chat, email, or phone calls. It is also responsible for collecting and conveying customer feedback to senior management to implement feasible suggestions.

Establishing these roles helps segregate the work between people properly, enhances individual accountability, and smoothens workflows. 

2. Define your processes 

After defining roles, the next step is to clearly define all the processes and optimize them to achieve maximum efficiency.

Here are the essential process standards for all the delivery or field service companies:

• Route planning and optimization: This involves optimizing delivery or service routes for field team members. It helps reduce the distances traveled on the road and minimize fuel and vehicle maintenance costs, boosting your bottom line. 
• Resource allocation: It involves scheduling drivers or technicians to different delivery or work orders based on their shift times, break hours, and area of service to ensure equal workload distribution. This helps avoid instances of under/overallocation and optimize your team’s utilization, leading to an efficient service delivery model.
• Route dispatch: This step involves sending route plans to scheduled field team members as decided. To save time, you should consider sending route plans to all your drivers in one go instead of sending them individually.
• Real-time tracking: Once your team starts following their assigned routes, you must use GPS-based tracking to monitor their real-time locations to stay abreast of their progress.
• In-transit route adjustments:  When your routes are in progress, you must add or delete stops, change their sequence, or redistribute them among staff members based on availability. This helps you handle last-minute service requests, cancellations, and accidents or vehicle breakdowns.
• Customer communication: Communication with customers is key to enhancing transparency and customer satisfaction. Therefore, you must send customers regular delivery or service status updates along with precise ETAs. 
• Proof of delivery: Documenting a successful delivery or service job helps maintain the evidence for future reference and protects your business against fake lost liability claims. 
• Performance analysis: Every business owner must evaluate their performance regularly to identify and eliminate operational inefficiencies. For instance, if you own a delivery business, you can analyze your delivery performance based on the stops covered, missed, or skipped by week, month, or year and make informed decisions to improve it. 

3. Utilize the right technology solutions

Technology is integral to streamlining all the processes and aspects of your delivery or field service business. So, you should consider implementing different software solutions for that purpose.

For instance, you can implement route planning software to plan your daily delivery or service routes based on multiple constraints, including customers’ availability, traffic, drivers’ shift hours, or priority. 

You can then deploy a GPS tracking system to monitor your employees’ live locations, a messaging app to send delivery or service status updates to your customers, and ePOD software to collect proof of delivery or service completion. 

However, using disparate systems may sometimes take time and effort. This is where several route optimization software solutions like Upper come in handy, as they provide all the functionalities mentioned above to handle all these processes.

4. Pick the right service delivery model 

There are different service delivery models in logistics. Depending on your business size and operational requirements, you can choose one or more of them. 

Here are the three major categories that you can choose from:

• In-house model: As the name indicates, this model entails managing your entire logistics operations, including route planning, dispatching, and executing deliveries or service jobs yourself. In other words, you don’t outsource any part of your business to a third-party logistics service provider and manage every aspect internally. 
• Outsourced model: In this model, you partner with third-party logistics provider companies for deliveries or hire a contingent staff for your field operations. However, you must still track their real-time locations to know their progress. 
• Hybrid model: This involves combining both in-house logistics management and outsourcing. For instance, if you deliver goods across different parts of your country or world, you can consider managing local deliveries independently and collaborating with a 3PL for shipments destined to far-flung areas or other countries. 

5. Prioritize a customer-centric service delivery service

Customers form the backbone of a successful business. Fulfilling their expectations is paramount to enhancing their experience. For that, you must ensure on-time delivery or the arrival of service technicians. 

Another crucial aspect is personalization, which requires you to customize your product or service to fit your customer’s unique needs. 

Service-based businesses can use different ways to do it. 

First, they can maintain a record of recurring clients and add their specific service requirements and expectations based on previous visits and observations. This can help the assigned technician understand the job and carry the requisite tools at the site.  

Two, scheduling a specific agent to a regular customer with whom they have built a rapport can help build their trust and increase upselling opportunities.

Third, notifying customers of service request statuses through ETAs and real-time updates can help enhance transparency in field operations. Moreover, including clients’ names or specific information they would like to know can personalize these notifications, hence, their service experience even further. 

6. Incorporate scalability in your structure

Delivery and field service logistics companies face fluctuations in demand based on market conditions and seasonal variations. So, your service delivery model must enable you to adapt to these changes without impacting operational efficiency.

Moreover, as you expand your business and tap into new delivery or service areas, this model enables scaling logistics operations to handle increased delivery orders or service requests.

For instance, if you have a seasonal business like a snow plow business, you can rent more vehicles and contract more service technicians to meet seasonal demand variations. At other times of the year, you can end the contract with temporary agents and release extra vehicles.

This adaptability helps you stay responsive to customer demands and scale up or down your operations.

How Can Route Optimization Software Enhance Your Service Delivery Model?

Integrating route optimization software into your service delivery model significantly enhances efficiency and operational performance. It optimizes various logistics processes, helping you deliver value while maintaining customer satisfaction. Here’s how:

1. Helps create fast and optimal routes:

Route optimization software lets you plan routes based on multiple constraints, including:

• Traffic
• Distances of delivery or service locations 
• Drivers’ availability
• Customers’ preferred service or delivery time windows 
• Priority 
• Vehicle capacity specifics

These multi-constrained routes help minimize travel time, reduce wasted fuel and distance, and ensure on-time delivery or service job completion. Reliable service also builds trust and transparency in your brand in the long run.

2. Automates mundane tasks

If you have recurring clients, route optimization software lets you save them as contacts, including details like name, contact number, address, service specifications, and additional notes based on past visits. You can simply import their addresses from contacts and map them as location pins.

This eliminates the need to enter recurring clients’ details whenever they place an order or service request. You can also create routes for scheduled services weeks in advance and schedule their dispatch to avoid last-minute scheduling chaos. This automation frees you up for more critical tasks focused on business growth.

3. Enables real-time tracking and collaboration

Most route planning software uses GPS tracking to monitor your field employees’ live locations. This enables you to determine whether they are behind schedule or on time and whether they are following the assigned paths. 

You can communicate with them if you notice delays or variances to understand the reasons. Routing software provides a mobile app for field employees that connects you with them through in-app messaging to address their concerns and issues promptly and on-time and efficient operations.  

4. Allows for making real-time route adjustments

Unforeseen events, such as accidents, vehicle breakdowns, or inclement weather conditions, can disrupt your schedules no matter how well-planned your routes are. Moreover, last-minute service appointments and cancellations can also be challenging to accommodate after dispatching routes to employees. 

Route planning software enables adding or deleting stops, dragging and dropping them to change their order, or reassigning them to another available employee, preventing disruptions and ensuring timeliness.

5. Keeps customers informed with status updates

Customers prefer companies that prioritize transparency; hence, it is crucial to inform them of real-time delivery or service progress. Route optimization software lets you configure different text messages and emails and include a tracking link so customers get up-to-the-moment status updates.

Besides, such software lets you change the language of these notifications to customize them to engage customers. This helps you strengthen your relations with customers by maintaining transparency and personalization.

6. Lets you digitally document delivery or service orders 

Your work doesn’t stop at delivering orders or completing service orders, but only when you gather irrefutable evidence of delivery and service order completion. Most routing software provides the ‘proof of delivery’ functionality. 

This feature lets your employees collect photos of items delivered or equipment serviced and add supplementary notes to preserve them for future reference. It also helps safeguard your business against fake ‘lost liability’ claims and legal issues, keeping your brand reputation intact. 

7. Facilitates analyzing operational performance

Evaluating your delivery or service performance is indispensable to identifying strengths and areas of improvement. Routing software provides reporting & analytics to help you analyze your employees’ and routing performance.

It provides route summaries and detailed reports that show details, such as address, driver’s name, route execution date, service time, original ETA, and actual ETA. This lets you determine and address inefficiencies based on data-driven insights to enhance future performance. 

Service Delivery Model: Your Key to Customer-Centric and Successful Logistics Businesses

In the words of Clare Muscutt, CEO of Women in CX, “Building a good customer experience does not happen by accident. It happens by design.” And a customer-centric delivery model is your roadmap to building that design and culture in your company. 

It helps you provide high-quality service, meet your customer’s expectations, and keep them returning as customers and ‘promoters.’ 

Following the steps and implementing a route planning software solution can help you build a service delivery model that actually ‘delivers’.