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How VoIP Improves Distribution and Logistics
November 8th, 2017

How VoIP Improves Distribution and Logistics

Ian Linton

VoIP improves distribution and logistics by providing low-cost communications in the warehouse, on the road, and in the office.

US expenditure on logistics and distribution was $1.48 trillion in 2015, accounting for around eight percent of the annual gross domestic product, according to the US Department of Commerce.

The industry carries out a number of essential functions to link producers and consumers, including transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply and demand planning, third-party logistics management, and other support services.

This key industry depends on efficient communications between clients or suppliers, warehouse staff and administrators, drivers, and customers at delivery destinations. It is a very competitive market with company-owned logistics teams competing with large independent operators and smaller local courier and delivery companies.

Communications help distribution and logistics companies of all sizes control costs, reduce delivery times and increase productivity and efficiency. VoIP improves distribution and logistics by providing low-cost communications in the warehouse, on the road, and in the office.

How VoIP improves distribution and logistics

Handling incoming calls

The contact center plays an important role in handling and distributing calls and information between the different parties. VoIP’s call routing and IVR systems ensure calls from customers, suppliers, drivers or consumers reach the right agents.

Caller ID information helps agents identify callers and their locations. And, VoIP’s integration with CRM systems give contact center agents access to customer records so that they can provide callers with an informed response.

Agents can access details of callers’ orders, together with the latest delivery information to deal with inquiries quickly and efficiently. If instructions or other requirements change, agents can then forward call information to the appropriate department or driver.

Recording calls

VoIP’s call recording feature provides a record of all incoming and outgoing calls. This helps managers and supervisors monitor compliance with customers’ instructions and provides evidence in the event of a problem or dispute.

Integrating call recordings with a CRM system ensures that up-to-date information is available to contact center agents and other staff handling customer inquiries.

Connecting departments

Within a company, many different departments are involved in or affected by distribution and logistics operations. These include staff in purchasing, sales, customer service, warehousing, and transport. Efficient contact is important because logistics require high levels of coordination.

VoIP makes it easy to connect departments and individuals on any fixed or mobile device and in any location. Even if key people are working away from their desks, at home or in other locations, VoIP keeps them in contact by ringing a series of designated numbers simultaneously.

Improving warehouse efficiency

Warehouse staff plays an important role in the logistics process. They manage incoming goods from a company’s production lines or from external suppliers and prepare outgoing goods for distribution to consumers or business customers.

VoIP allows staff working in the warehouse to communicate with mobile devices over wireless networks. Supervisors can easily contact staff to issue or change instructions or get updates on work in progress. Supervisors can then coordinate the activities of drivers or workers on loading bays using the latest available information from the warehouse. This can be important if customers request urgent deliveries or if other problems delay dispatch.

Communicating with drivers

Efficient communication with drivers is key to controlling costs and delivering a great customer experience. Drivers follow planned routes to minimize travel and meet delivery schedules.

However, traffic delays, changes to customer requirements and other factors can impact schedules and lead to late deliveries or cost overruns as drivers have to change routes or make additional calls.

VoIP provides a number of useful features that support communication with drivers. VoIP can be deployed on smartphones or tablets using a softphone application that lets supervisors and drivers use the full range of VoIP calling, messaging and conferencing services.

Simplifying driver notifications

Supervisors can issue instructions or updates to drivers by calling them or sending messages by text, email or instant message. A special VoIP feature, voicemail to email, makes it easy to transmit detailed customer instructions to drivers in a convenient format. Incoming faxes can also be forwarded to drivers as email attachments.

Supervisors can issue notifications to individuals or groups of drivers using VoIP’s broadcasting features. That makes it quick and easy to alert drivers to general problems such as traffic conditions or bad weather that could affect all deliveries in a geographical area.

Drivers can use the same messaging features to update supervisors on progress, delays that might change schedules or completed deliveries. Supervisors can then use the information to keep customers updated on progress.

Delivery tracking

Offering consumers and business customers a delivery tracking service has become an important differentiator for distribution companies.

Drivers can use VoIP’s messaging services to update the tracking system when they collect goods at the depot for delivery and can give the customer a series of estimated arrival times as they get closer to the delivery destination. This improves convenience for customers and helps enhance the customer experience.

Supervisors can also use the tracking system to monitor drivers’ efficiency and productivity. Although drivers cannot avoid traffic delays and changes of instructions, they may not be using the most efficient routes or may be taking too long to complete delivery at certain destinations.

Controlling distribution costs

The ability to exchange delivery information and keep drivers informed of changes can help control or reduce distribution costs. Early traffic or weather alerts can help drivers select alternative routes and avoid long costly delays. Plus, notifications of changes to delivery arrangements can eliminate the risk of wasted journeys or return visits to complete an updated order.

Calls to a driver’s smartphone fitted with a VoIP softphone app costs less because VoIP calls are transmitted over a data network rather than a voice network where tariffs are higher.

Linking regional and national depots

Logistics companies operating throughout the country may open regional hubs to minimize costs and improve efficiency. Goods are delivered in bulk to regional hubs for ongoing distribution to local customers. This can reduce the number of unnecessary long-distance journeys to individual customers.

Regional hubs are generally located near larger markets such as cities, or close to major highways. Companies may also open local depots close to airports, seaports or rail networks if they are frequent users of these transport services.

Deploying VoIP in each of the depots eliminates long-distance calling charges because calls between connected sites are free, regardless of location. And companies with overseas distribution partners can also take advantage of free or low-cost international calls.

Streamlining the supply chain

Communications in the distribution sector can improve overall efficiency in the supply chain. Logistics companies ensure components, supplies, and finished goods move smoothly and economically through the distribution chain from manufacturers to final customers.

VoIP supports the secure, efficient exchange of production, demand and logistics data between different members of the supply and distribution chain to eliminate delays, minimize the impact of changes, and control costs. VoIP’s Internet reach makes it easy to connect with any member of the supply chain anywhere in the world.

Taking advantage of the Internet of Things

Logistics companies can take advantage of the Internet of Things (IoT) to improve information flow. Real-time data from sensors in retail outlets, warehouses or vending machines provide logistics planners with accurate information on stock levels throughout the distribution chain. That can help them plan deliveries more precisely or arrange deliveries if the IoT alerts them to low stock situations.

They can use VoIP’s messaging and notification services to coordinate deliveries and reroute drivers if necessary. VoIP ensures that a logistics company can make effective use of the vast amount of data available from the IoT.

Scaling with business conditions

Logistics companies face peaks in demand that can overwhelm a legacy fixed line phone system. The surge in demand for deliveries on Black Friday or Christmas put pressure on phone lines and delivery drivers. Companies with customers producing seasonal products face similar short-term challenges.

Investing in surplus telephone capacity to deal with peaks is unnecessary as it isn’t used for most the year. VoIP overcomes this problem by providing additional capacity on demand. Administrators contact service providers who can supply additional virtual lines that require no physical installation or disruption.

VoIP’s scalability also helps logistics businesses that are growing or adding new depots. VoIP capacity can grow in line with changing business environments.

Helping smaller businesses compete

Smaller distribution companies and couriers do not have the resources to compete with their national counterparts. However, they can provide local customers with fast, efficient service.

VoIP provides a flexible, affordable communications solution for smaller businesses, particularly if they use a hosted service. They can then take advantage of VoIP’s advanced services without incurring capital expenditure or hiring technical staff.

VoIP also helps smaller businesses that want to partner with national organizations and act as their local distribution operation. VoIP lets smaller businesses coordinate activities and report in the same way as the national organization. In some cases, they may be able to integrate their system with the national infrastructure. This demonstrates that they can act as professional business partners.

Supporting a growing industry

The growth of online shopping and the increasing sophistication of supply chain operations make logistics a key industry. To remain competitive logistics companies must focus on driving efficiency, productivity and cost savings from every aspect of their operations.

VoIP provides the communications infrastructure and services to achieve these goals across all logistics operations. By enabling a seamless flow of information throughout the supply and distribution chain, VoIP helps companies move goods more efficiently.

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