The Last Mile: It’s More than a Sprint!
EPISODE 8:
Gina Anderson, Geodis’ VP of Solutions & Growth, joins the DCPerform Podcast to define the last mile, its evolution of services, and the ultimate value proposition to the end consumer/provider.
From DCPerform, hosts Rachael Weber, Brand Strategist, & Wonil Gregg, VP of Customer Engagement and Experience, explore the current technologies enabling Last Mile with Gina, the future of automation/technology in Last Mile, and how these evolving capabilities will enhance the end customer experience.
Thank you for listening to the DCPerform Podcast!
EPISODE TRANSCRIPTION:
00;00;00;01 – 00;00;03;26
Rachael Weber
Hello and welcome back to the DCPerform podcast. My name is Rachael Weber.
00;00;03;28 – 00;00;04;20
Wonil Gregg
And I’m Wonil Gregg.
00;00;04;20 – 00;00;13;14
Rachael Weber
We have a great episode for you guys today. We have Gina Anderson from Geodis who is the VP of Solutions and Growth, and we’re talking all things last mile.
00;00;14;02 – 00;00;32;09
Wonil Gregg
It’s been a hot topic. There’s a lot of buzz around Last Mile, micro fulfillment. What is it? Who does it serve? Why do we do it? So we’re going to explore that, identify where the opportunities are for the future, and talk about some of the challenges that we have as an industry to keep up with customer demand.
00;00;33;04 – 00;00;41;13
Rachael Weber
Thanks for tuning in to episode number eight of the DCPerform Podcast. Well Gina, welcome to the DC Perform podcast. It’s so great to have you on today.
00;00;41;13 – 00;00;43;05
Gina Anderson
Thanks for Having me. Super excited to be here.
00;00;43;06 – 00;00;47;10
Rachael Weber
Well, give us a little background about yourself. So you work with Geodis. Can you give us some insight on that?
00;00;47;11 – 00;01;18;14
Gina Anderson
Yeah. So it’s my 31st year in supply chain and logistics, pretty much all I’ve ever done and had my own consulting practice since 2010. But I had been following Joe just for quite some time. Our CEO, Madam Lombard, is someone that I just fell on trailblazing as a woman in logistics, and in 2020 they asked me to join them to build out a product called City Delivery and more, more like White Glove last mile, but a bit more specialized just as there are for people.
00;01;18;14 – 00;01;27;13
Gina Anderson
So end to end supply chain solutions. There’s not a mode of transport that we don’t handle. And we’re a global company doing great things and a lot of different verticals.
00;01;27;24 – 00;01;33;08
Rachael Weber
So you said that phrase the last mile. Can you define that for us before we get into the thick of things?
00;01;33;18 – 00;02;09;04
Gina Anderson
Well, it feels like it has many different meanings now, but generically, it’s that final leg of a parcel to a customer’s home or a business. I think the differentiation is now in describing last mile is everything that goes into it now based on the growth of eCommerce and how much we have to adapt, whether you’re a business or in the supply chain to that customer experience, what is it that we’re trying to achieve when we deliver that last mile package to a business or to a home.
00;02;09;04 – 00;02;33;20
Wonil Gregg
Last mile as being an evolution of the customer expectation in the last five years really. And it really came on during the COVID era, the fact that they’ve been able to innovate their business model and as a form of provide services to those industries who either don’t want to handle those types of orders or decide that their entire operations needs to be run by them.
00;02;34;03 – 00;02;52;03
Wonil Gregg
This type of thought leadership and executing that now into a tactical execution to service the customer is really where you make a difference. Explain what types of services that the customer is saying we need to have now that maybe they didn’t need they didn’t think that way ten, 15 years ago. Yeah. How has that evolved?
00;02;52;20 – 00;03;13;20
Gina Anderson
When I came to Geodis and I started thinking about, you know, the white glove and the last mile experience. I also wanted to make it an enabler for brands and companies to say, Well, how can I take better control of that last mile piece? Because obviously with challenges with FedEx or UPS or, you know, companies, you know, consolidating, emerging.
00;03;13;29 – 00;03;46;13
Gina Anderson
Something was being left on the table and that was, you know, the service. So I think white glove has morphed into way more and it should continue because now brands and companies, and especially what I’m trying to do at Geodis is create these hyper local networks that a company can treat as a white glove experience, whether it’s doing store replenishment because they want to take care of their back of house, they want to make sure that they have what they have ready to go before the store opens.
00;03;46;14 – 00;03;52;18
Gina Anderson
White glove now is morphed into something that’s more predictable time definite and controlled.
00;03;52;22 – 00;04;16;14
Wonil Gregg
So when you think of the Spokane hub type of model and traditionally value added services have been done in the larger hubs where they can control the labor, they can do, you know, gift cards, they can do wrapping, they can do personal notes. And the cost to do that have been pretty prohibitive that some companies decide not to provide that.
00;04;16;14 – 00;04;32;04
Wonil Gregg
But now the market saying we demand it. If you don’t do it, we’ll find someplace that does. The idea of moving that value added services capability to now to the spokes and have yet more of a localized service. Are you seeing that as well?
00;04;32;15 – 00;04;59;17
Gina Anderson
I think there’s still some traditional three PL type solutions out there, but there are some that are trying to be exactly that more value out so they can have a unique differentiator in the marketplace. So those value added services are I mean, that’s why I was trying to create that, what I just explained. I mean, this is a value added service by being able to help a company do that and create a little bit more personalization for that in experience.
00;05;00;05 – 00;05;29;16
Gina Anderson
So the value added service isn’t so much just, you know, fluffing it up and making it look so great for that. It’s more operationally and I think a differentiator for those types of companies to come out and do something different. A company like Phil Logic, that’s what they specialize in. They’re inside malls and allowing that specialized type service where they can do microfilm and type things and add that value added service right there in that area that’s closest to the customer.
00;05;29;18 – 00;05;56;13
Wonil Gregg
Now we’re seeing some of the tech providers, particularly in the retail segment, where you see them closing their stores. But what they’re doing instead is having almost like a university type of experience where instead of coming to the store to buy things, you come there and you bring your technology and they can either return it, refurbish it, get some training, and then also the inventory stays regional there.
00;05;56;13 – 00;06;13;05
Wonil Gregg
They refurbish it instead of having to send it either back overseas to be refurbished or to have made center. And then it’s still available to customers come in. They can either do a swap or buy new. Is that something that you’re seeing applied now also and maybe the retailer that’s not traditionally just technology.
00;06;13;17 – 00;06;36;10
Gina Anderson
Yeah. Yeah, no, it’s that’s exactly what’s going on. And I see that quite often now that I mean, you just think of something simple as putting in a receptacle. The kiosks, the lockers, it is as much as returning something, but then the lockers can be swept and then brought back, like you said, keeping it in that hyperlocal network.
00;06;36;13 – 00;06;40;20
Gina Anderson
Mm hmm. Re inventoried and resold and put back into that locker.
00;06;40;28 – 00;06;54;19
Wonil Gregg
Getting on to the different types of industries that this is most suited for. You know, when we think about retail, specialty luxury goods, consumer goods are there are some industries that this is better for.
00;06;54;27 – 00;07;11;28
Gina Anderson
I don’t know a better is the word. I just think it’s different. Requirements time critical of a medical device. The security of a pharmaceutical, the experience that luxury is going after each one needs in order for last mile to be successful.
00;07;11;28 – 00;07;15;00
Wonil Gregg
And you had anything that’s regulated or has heavy compliance.
00;07;15;16 – 00;07;23;03
Gina Anderson
That’s a whole nother right. I mean, I’ve got a customer right now that’s got electric batteries that are on the mowers.
00;07;23;10 – 00;07;23;27
Wonil Gregg
Yeah. Mm hmm.
00;07;24;22 – 00;07;30;04
Gina Anderson
You know, there’s just D.O.T. regulations are just safety and security.
00;07;30;05 – 00;07;47;21
Wonil Gregg
When we think of the business impact of a company saying, yes, this is a direction that we want to head, and some of the motivations and rationale, they say this is something we need to do and invest in. There are some interesting data points that you brought to us. I just wanted to mention a few of them and just rattle off some of your thoughts.
00;07;48;14 – 00;07;58;02
Wonil Gregg
So 93% of the customers expect visibility into the order process that comes from transit status to arrival day. I keep think of that Domino’s Pizza model.
00;07;59;25 – 00;08;00;09
Gina Anderson
Like.
00;08;00;17 – 00;08;10;23
Wonil Gregg
You could see a lot of and that 40% of consumers will not order again from a direct to consumer brand that lacks order tracking and visibility.
00;08;10;23 – 00;08;32;00
Gina Anderson
Yeah, it’s I think it’s staggering numbers to see, but we are our mobile devices. I mean, that is the game changer as practitioners as well as brands, we have to think about the next gen that are buying our our products. It’s one of those things, you know, that is instantaneous and the technology’s out there to support it. You mentioned the Domino’s.
00;08;32;00 – 00;08;40;17
Gina Anderson
It’s getting companies to utilize it more efficiently and to have the capabilities of the tech play translate to the customer experience.
00;08;40;17 – 00;09;07;24
Wonil Gregg
And there’s one thing we know about generational change. We experienced it with our parents and now we’re seeing it the other way. And that is what are you self-sufficient? You know what? Can you pay your own flip and bills? And so when I look at this statistic that you throw out that 28% of online brands, bottom line comes from last mile delivery benefits, which businesses spend approximately $10.10 per order on last mile delivery.
00;09;08;02 – 00;09;18;10
Wonil Gregg
So businesses are spending this extra money for this capability, paying for that so the next generation gets what they want. When are they going to become so know.
00;09;18;11 – 00;09;23;29
Rachael Weber
Why you’re pointing out. I know you’re like blaming me over here. It’s all your fault, Rachael. You’re making them go broke.
00;09;24;21 – 00;09;27;27
Gina Anderson
Look, we can say we’re guilty 100%.
00;09;28;15 – 00;09;29;00
Wonil Gregg
We love.
00;09;29;01 – 00;09;31;19
Rachael Weber
It. We love it. You love that quick delivery.
00;09;31;23 – 00;09;47;05
Wonil Gregg
Then when you think of that cost $10.10 per order and some items that are for purchase are $50, you’re losing 20% on margin to provide that. At some point that’s going to catch up. Otherwise, that that’s how you justify the investment in that kind of infrastructure.
00;09;47;28 – 00;10;06;06
Gina Anderson
I don’t know. I felt the number was low when I saw 1010. I got really, you know, because I’m I’m in it. I know how much it costs for my partners. But yeah, you’re right. When you and then you think about free returns and it the margins, the prices, I quite often wonder how is it sustainable and what’s going to have to give.
00;10;06;09 – 00;10;21;10
Gina Anderson
We do have to just be more efficient. We have to drive costs down through automation. We have to use some AI and machine learning and some things to get better at what we do and how we do it. But that number is going to go up to.
00;10;21;10 – 00;10;41;28
Wonil Gregg
Where does that extra cost go? It goes to technology, it goes to labor. And also probably some of the returns, processes and materials to provide that. If we know that a lot of that cost goes there. Let’s talk about what you’re seeing in the marketplace from the customer experience to the order management system when they get online and the options that they have available to them.
00;10;42;08 – 00;11;00;06
Wonil Gregg
How does the deciding say, yes, I want a gift card and I wanted to say this and the wrapping has to look like this. And because I’m ordering it from Boston, the hub is in Nashville. How does the technology enable that?
00;11;00;13 – 00;11;32;05
Gina Anderson
It’s got to, I guess, go back to, you know, having companies understand that the one DC to DC model is not going to support fully, that they’re going to have to have outside parties a three PL or leverage stores level either, you know, develop relationships with microfilm and centers to really take that inventory and get it in multiple locations so that they can achieve speed to market and, you know, satisfy that need.
00;11;33;03 – 00;11;50;13
Gina Anderson
And that’s been a that’s been a struggle. That’s what I’m seeing out there. It’s been a struggle for companies to do that well and to do it right into it cost effective and have the technology that’s going to support that. I know of a couple of brands that are augmenting their one or two DCS with three PLS or MSI’S, the micro fulfillment centers.
00;11;50;19 – 00;12;07;16
Gina Anderson
They’re having to understand what their inventory makeup looks like with the demand of the customer. And you see this all the time, right? You’re doing studies to help them understand this. Right? So the hybrid model is what I’m seeing most. And I think that’s going to be the best way for companies to achieve what they’re going to need to achieve.
00;12;08;07 – 00;12;42;09
Wonil Gregg
When you think of the different software platforms that enable that, you know, you have the the execution level platforms, which are the masses the teams is and the demand forecasting and planning piece in particular. And then you think of the financial systems that track the, the invoicing, the billing order procurements, and then you have the Iot that really that’s where it seems like the customer interface happens and then all these other new ways of transmitting data.
00;12;42;27 – 00;12;50;18
Wonil Gregg
How are you seeing micro fulfillment being impacted by that visibility to be able to anticipate and forecast what the demand is?
00;12;50;23 – 00;13;14;23
Gina Anderson
What I’m finding is the devices have so much usable data that companies aren’t using to the fullest potential yet and a lot of companies are hung up about the cost of the device. But when you take all the data and you see what else, it could help you from a planning perspective and it’s you. The other thing that I’m seeing out there is how disparate these systems are.
00;13;15;09 – 00;14;00;13
Gina Anderson
The TMS, the OEMs, the sensors, all the smart technology are not integrated and speaking to each other. So is a company out there called versus versus dot io as your listeners can find them. And it’s interesting because they are the only air operating system that allows as a as a layer for all those smart technologies to report and to transmit up into that to me is where we need to go even versus talking about a spatial twin where you’re taking into consideration everything inside the warehouse and other things like Iot sensors, you know, outside of the warehouse and really making smart decisions with that data and layer in that technology.
00;14;00;13 – 00;14;21;08
Gina Anderson
So I think we’re we’re in an inflection point where there’s so much good technology coming at us. How do we use that technology and make sense of that technology to where we’re going to be able to keep our costs in line, still provide that customer experience, and then also, I think, continue to innovate. It’s it’s an exciting time.
00;14;21;08 – 00;14;22;06
Gina Anderson
It’s just really exciting.
00;14;22;09 – 00;14;43;14
Wonil Gregg
So data really is the new currency, right? And when you think of it that way, the accumulation of that data, it’s all about not just what does it tell you, but it’s one of the insights that you can get from it. And from those insights, what’s the rationale for you to make change? And ultimately, after you make that change, what’s the impact to the customer?
00;14;43;16 – 00;15;05;23
Wonil Gregg
What do you think of the evolution of the capabilities? Essentially, we’re going to that 3.0 Internet, right? And there’s been a lot of talk about that. And it’s enabling all the human senses in a technical environment. But what this is going to allow us to do is going to now create another level of awareness, balance, gain and ultimately intuition.
00;15;06;00 – 00;15;32;04
Wonil Gregg
It’s about being able to read the data real time and be able to have all those different sensing nodes and all the mechanical requirements to then deliver and service the customer. And in the PR world, the contractually, the way they’re set up, staying on the edge of that to stay current is almost harder for them. What you think that a brand who controls that whole process, how do you balance those two things out through partnerships?
00;15;32;15 – 00;15;35;01
Gina Anderson
It’s you and I talked about this, the ecosystem.
00;15;35;04 – 00;15;35;13
Wonil Gregg
Yeah.
00;15;35;22 – 00;15;54;20
Gina Anderson
It’s really through partnerships. We don’t we don’t have to reinvent the wheel. We just have to have the right partners that can enhance our value. Right. And 11. I want to make that I think you’re so good at with your company is even though we have all this, you still got to go back and find out why isn’t something working?
00;15;54;20 – 00;15;56;10
Gina Anderson
We still have to have that human touch.
00;15;56;18 – 00;16;11;07
Wonil Gregg
You know, when that when you look at the future, while we talk about the vision of what it could be, what are your thoughts when you look at it from a three piece perspective and there need to continue to evolve yet have those financial constraints?
00;16;11;22 – 00;16;35;25
Gina Anderson
Yeah. So I think one example right now is just the evolution into the electric vehicles, right. And you know, some of the ways that people have had to invest in sustainability and you know, when you look at the capital expenditure and the infrastructure investments that it’s going to take. So when you say it comes back to a finance decision, but there’s also this balance, can we afford not to do it?
00;16;35;28 – 00;17;15;02
Gina Anderson
In some respects? I have companies right now asking me for any milk runs they want, you know, 53 footers. They want vans. They want box trucks. I mean, you can access these leases, but then there’s exciting companies like Brightdrop looking to them for a pilot where we could show that this is a viable way that we can get the unit economics right, where we can consider the investment not only into our planet, but also being more efficient with the ability to take this vehicle and maximize it.
00;17;15;02 – 00;17;17;18
Gina Anderson
In this kind of milk run concept.
00;17;18;04 – 00;17;37;25
Wonil Gregg
The last mile is here to stay. It’s going to be a phenomena that’s been born out of the customer requirement demand. And as long as our keeps requiring, it’ll be there, it’s going to continue to evolve, evolve, and it’s ultimately going to be dictated by human behavior, what’s what’s required.
00;17;38;07 – 00;17;46;18
Gina Anderson
I think it’s exciting time, supply chains, sexy and fun. It’s not, you know, fax machines putting orders.
00;17;46;18 – 00;17;47;05
Wonil Gregg
Through and.
00;17;47;15 – 00;17;54;05
Gina Anderson
True, you know, but it’s an exciting time. And however I can help, I’m here for your listeners and for you guys.
00;17;55;02 – 00;17;55;22
Wonil Gregg
Thank you, Gina.
00;17;55;23 – 00;17;58;19
Gina Anderson
Thank you.