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Blog May 2022

Retail distribution: minding CO2 emissions, customer service and data protection

The focus of most retail distributors is on expanding margins and lowering operating costs. Not as much thought goes into lowering CO2 emissions, raising service levels or especially, cyber security. Yet staying competitive and avoiding fines due to regulations demand that you give attention to these issues. First, it helps to put those issues in context to understand what you’re facing.

1. Towards net zero

Vehicle specifications vary according to size and payload, which affects CO2 emissions. The predominant HGV class relied upon by most retail supply chains is articulated, with a maximum gross weight of 40 tonnes. HGVs contribute around a quarter of CO2 emissions from the transport sector and nearly 5% of total EU emissions. (In the UK, that figure is 15.94% of emissions from transport.)

To meet 2030 and 2050 climate targets, the EU will have to reduce GHG emissions much faster than is currently happening. There are only 2,300 zero-emission trucks on European roads, and to meet those targets, 200,000 more will be needed by 2030.

Retail distribution, including collection and delivery to the home, depend on regions. CO2 emissions are influenced not only by consumer behaviour, but also supply-chain configurations. Everyone needs to get on board.

Retail distributors are certainly not averse to the idea, but the hurdles they face include lack of infrastructure and the need for investment. Perhaps the biggest challenge is that fleet operators need to make purchasing decisions several years in advance. Given the current rate of technological advances, electrical HGVs for retail distributors won’t be available in the coming years.  

Reducing CO2 emissions needs to happen now, with the HGVs and LGVs already on the road.

2. Raising customer service levels

Your entire operations should be customer centric. Customer service should never be left solely to one department that fields phone calls and answers emails. It’s an attitude – a culture – that should be embedded in everything your company does.

The customer experience you offer directly impacts their loyalty. They want a seamless journey across different touchpoints. They have their own customers to answer to, and it’s your job to help them meet their own customers’ expectations. Your planning has to account for different types of vehicles, geographical restrictions or districts and other issues – planning is where so many customers are let down. You need to work with agility, accuracy and consistency.

3. Protecting your data

The retail distribution sector faces multiple cybersecurity risks. Compliance, for example, is not the same as risk management. As ransomware attacks against retailers and distributors gain pace, companies are ill-prepared to shore up detection. Malware is another threat, accounting for 62% of attacks against supply chains within the EU, with 58% of attacks aimed at stealing suppliers’ data.

Malicious actors find the weakest link within supply chains to gain access to networks. Cyber risk is a real business issue, threatening your reputation and ability to do business. To mitigate risk, companies need to recognise attacks right away. Being pro-active with cyber security is how you become resilient. 

The answer is digitalisation

Digitalisation not only lowers operating costs and expands margins. It lowers CO2 emissions and raises customer service levels. And while digitalisation provides more attack surfaces for bad actors, multi-layered security can protect you.

Let’s backup and consider what you’re dealing with as a retail distributor. Your planning has to account for cross docking and inter-depot transport distribution from several depots and multiple routes for each vehicle. You’ve got to consider strategic, tactical, operational, and executional planning and follow-up. Digitalisation automates and optimises distribution, inbound transportation, trunking and back-haul transportation in the same plan.

You become significantly more efficient – this is how you lower costs and protect margins – and it’s these efficiencies that eliminate redundant and wasted journeys, which in turn cuts your CO2 emissions.

These efficiencies are also how you improve customer service. Master route optimisation based on frequencies, visit patterns and seasonal variations enables you to hit delivery time windows, making you more reliable. When it comes down to it, that’s what your customers want most from you: to know they can count on you.

Disappointing the bad actors

The beauty of working on the cloud is the scalability it gives you. As you grow, so does your cloud. Not only is your data backed up for you, saving you the time and resources of doing it yourself, but updates to keep you compliant with regulatory bodies are done for you.

But there’s also another big advantage, depending on the cloud your platform operates on, and that’s security. Microsoft Azure is the best example of what we’re talking about. Designed with multi-layered security, Microsoft Azure has 3,500 global cybersecurity experts working around the clock to monitor threats.

With on-premise software, you have to do that yourself. If you have the resources, that’s fine. Otherwise, you’re safer with a big player like Microsoft Azure.

Results say it all

Digitalisation starts with a smart platform, such as AMCS Retail Planner. Users report reductions in CO2 emissions, mileage and driving time of up to 20%. They’ve reduced the number of vehicles needed up to 10%.  

Users also report improved customer service levels, with close to a 100% service fulfilment rate. Other results worth noting: up to 75% less time spent on planning and up to 60% less time spent on registration and follow up.

This is AMCS Retail Planner, which also leverages Microsoft Azure to help you protect your data. You should also know that AMCS is SOC 1 and SOC 2 compliant.

To learn more about the security and other benefits of AMCS Transportation Optimisation Suite, we urge you to get in touch.

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