NextGen Supply Chain Interview: Ben Harris

NextGen Supply Chain: We all seem obsessed these days with receiving our stuff from e-commerce companies in two days or less. In fact, that's the genesis of on-demand delivery. Give us your take on this new NextGen supply chain practice.

Harris: On-demand delivery is really coming into its own these days. So many people used to think three- to five-day delivery was good enough even as Amazon moved to two days with Prime. On-demand delivery makes two-days seem too long. On-demand is more in the three- to five-hour window. Some are even less than that. Let me explain.

There's no doubt e-commerce is making use of on-demand delivery. But so are grocers, local retailers, builders and restaurants. And for the restaurants, delivery in three to five hours doesn't cut it. You're talking here a matter of minutes.
On-demand delivery is becoming table stakes for many companies as it connects businesses and people.

It's all about surprising and delighting customers. On-demand delivery is very focused on building customer loyalty. It also helps to attract new customers, but customer loyalty is really the currency of the realm.

NextGen Supply Chain: This sounds a lot like last-mile delivery. What's the difference?

Harris: On-demand is really a subset of last mile.

The companies that provide delivery services for both are quite different. Last-mile delivery is typically done by large corporate delivery fleets from UPS, FedEx and the like. In Atlanta, some of the on-demand delivery companies are startups like Roadie, Zifty and TommyRun.

The two groups run their businesses quite differently. Final mile companies have dedicated fleets and schedule deliveries through a regional or central office. On-demand delivery relies on a crowd- sourced, collaborative delivery network. They have no dedicated fleet but request deliveries from a network of people who are assigned deliveries through an app on smart phones and tablets.

Uber and Lyft drivers are part of this as are other independent drivers and couriers, even some on bikes.

NextGen Supply Chain: Through your Supply Chain Leadership Council, you must have a really good view of the on-demand delivery landscape in Atlanta. Tell us a little bit about some of the leaders there.

Harris: Before I get into specific companies, I want to point out that the bigger the metro area the bigger the on-demand delivery infrastructure. People, especially those in metropolitan areas, are getting spoiled with on-demand delivery. In a way, on-demand delivery was probably inevitable once Amazon Prime arrived. People just want things faster and faster. It becomes something we have to have.

The leading companies in Atlanta, in no particular order, are Roadie, Kanga, Instacart, Zifty and TommyRun. Roadie focuses on deliveries for retailers such as Macy's and grocers such as Kroger. Roadie even has Delta as a client for the home delivery to passengers of luggage that went astray.

Zifty and Instacart focus on food, the former on restaurants and the latter on grocers. And TommyRun delivers for the construction industry. So many job sites are short supplies that can bring construction to a halt temporarily. Of course, all of them manage deliveries for companies outside these niches.

NextGen Supply Chain: That's pretty impressive. I hadn't even considered how many businesses on-demand delivery already touches. What else am I missing here?

Harris: This will probably surprise you, too.

Roadie, which is headquartered in Atlanta but operates nationally, has already made deliveries in more than 11,000 towns in America. That's more than what Amazon Prime has done. Pretty amazing.

So, while Amazon Prime is focused on the major urban areas in two days, Roadie is focused on every town between Atlanta and Destin, Florida, for instance. That's a lot of towns. Now some of those deliveries do take two days. But it's an amazing capability.

NextGen Supply Chain: It sure is. In last month's NextGen Supply Chain, we talked about on-demand warehousing. Is there any link between that and on-demand delivery.

Harris: There is, but they are quite different. Both are on demand and are in the early stages of building their networks to first store and then deliver inventory and orders. But on-demand warehousing is focused on space availability while on-demand delivery is focused on time.

NextGen Supply Chain: And with that, I'll say we're out of time to talk about on-demand delivery today. Thanks for your insights.

Gary Forger is the special projects editor for Supply Chain Management Review. He can be reached at [email protected].

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