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Believe the Hype: Hyper-local supply chains

As customers’ lives become increasingly busy, and as technology continues to advance, the power balance between consumer and supplier has shifted; With pressure now on the logistics of supply and demand, The Logistics and Supply Chain Specialists – Gideon Hillman Consulting, explore what can be done to bridge the gap…


Believe the Hype: Hyper-local supply chainsThe easier it becomes for consumers to purchase items online, and the more companies seem to be able to offer, the more consumers begin to expect. Consequently, modernised logistics processes are rapidly evolving, and ecommerce purchasing behaviour is the prominent driving force.

In the modern age we live in, customers are becoming ever more accustomed to possessing a wealth of purchasing power at their fingertips. Technological advances are beginning to determine the size of the gap between consumer demand and suppliers. Speed and locality of deliveries are in ever increasing demand, and the supply chain is ultimately being stretched to deliver under these conditions.

So what are suppliers doing in an attempt to bridge the gap?

In the privileged world of westernised culture, today, customers can enjoy gourmet food delivered to them within the comfort of their own home and have groceries and clothes delivered daily in under an hour; a power-shift from suppliers, to consumers, meaning customers now have the power to command services, from brands, stores and businesses, all from the click of a button on their ever-evolving smart devices.

With more and more customers demanding high quality produce delivered in increasingly shorter time spans, a niche was recognised in the supply chain process, for localised end- to-end local delivery. Known as ‘Hyper-local delivery’, this solution, solves the problem of matching immediate demand with the nearest available supply, in the most optimised manner. By eliminating as many middle layers or steps as possible, hyper-local delivery optimises performance and efficiency in logistics processes.

British online food delivery company Deliveroo is a good example hyperlocal platform, with operations spread across eighty-four cities including the UK, the Netherlands, France, Germany, Belgium, Ireland, Spain, Italy, Australia, Singapore, Dubai, and Hong Kong; Deliveroo’s sole purpose is to literally feed increasing consumer demand, through partnerships with close proximity eateries.

Based on customer postcodes, Deliveroo is a platform which enables local offline services from anywhere, at any time, to supply and deliver to consumers, local to within a few meters radius of their physical restaurant location. In this way, hyper-local delivery, benefits both the customer and the restaurants in the long-term, customers want high quality food delivered to them quickly, and this new customer demand provides another revenue source for restaurant owners.

Hyper-local delivery is not limited to just food outlets, but incorporates locally sourced, produced, and designed goods and products, on the whole. Customers want increasingly more transparency within supply chains and information about the origin of their purchases, in addition to getting products delivered same day. Hyper-local delivery sources products closer to individual customers, and this is the key to faster, cheaper delivery times, and ultimately, customer satisfaction.  

Similar to ‘last mile’ delivery (the current model adopted by established businesses within in the e-commerce industry) with the logistics of hyper-local delivery operations, there is little to no need for large freight; instead smaller vehicles or bikes are used. It is therefore no surprise that the hyper-local approach is thriving in areas with high-population density, quality restaurants, usually within the hearts of towns and cities.

Whilst many see Hyper-local delivery as an innovative solution to improved supply chain transparency, quicker delivery times and overall greater customer satisfaction, some argue that the business model of Hyper-local delivery actually disrupts the logistics of ‘last mile’ delivery.

However, these smaller Hyper-local platforms do still have to compete with those who monopolise the ecommerce arena, take Amazon for example whose KPI is delivery within 2-3 hours; yet despite this, Hyper-local platforms remain standing strong, reliant upon their own unique selling point of being an on-demand delivery model, that is continually tailored to suit the customer’s needs.

Uncertainty has been voiced surrounding the longevity of Hyper-local supply chains, and doubts surround whether it is capable of, or ever will be, of serving as a long-term end-to-end logistics solution for supply chain optimisation.

However, with the advent of apps, and technology, one thing that is for certain, is in the foreseeable future, more and more logistics solutions using technology will begin to optimise and speed-up the supply chain.

For now, the future of hyper-local supply chains and delivery will continue to be shaped by ever-evolving technology, and ever-increasing consumer demand.

 

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Gideon Hillman Consulting Limited is registered in England and Wales.
Company Registration No: 6593700. Registered office at Highdown House, 11 Highdown Road, Leamington Spa, CV31 1XT. UK
A supply chain and logistics specialist with knowledge of supply chain interim management, stock management tools and inventory policy development

Institute of Consulting ISO 9001 UKWA Logistics Awards CMI Awards