If you're the head of your company's logistics, you're most likely feeling the pressure to continually optimize your operation, grow your margins, and save money. After all, efficient logistics are essential to the satisfaction of your customers and the success of your enterprise. And one of the best ways to make your operation more efficient is by understanding and utilizing the middle mile of your supply chain.
In this blog post, we'll take a close look at what the middle mile is, what sort of challenges it presents to business leaders, and give you some pointers for optimizing this often-overlooked component of your operation.
What Is the Middle Mile?
There are three main stages to logistics: the first mile, the middle mile, and the last mile. The middle mile is the stage between when a product leaves the manufacturing facility and when it arrives at the local distribution center. This is the longest and most expensive stage of logistics, and it requires the use of transportation infrastructure such as roads, railways, and shipping lanes. The middle mile is often referred to as the "long tail" of logistics because it consists of a large number of small shipments that add up to a significant total volume. The first mile and the last mile are shorter and less expensive to manage, but the middle mile is essential to the overall process.
In order to ensure that goods arrive at the local distribution center in a timely and efficient manner, middle-mile logistics must be carefully planned and managed. Any slip ups can have a major impact on the overall performance of the supply chain, and any delays in middle-mile logistics can cause ripple effects throughout the entire system.
Challenges of the Middle Mile
One of the biggest challenges of middle-mile logistics is that, due to its length, it can make route planning and optimization more difficult. And because the middle mile is usually less transparent to shippers and customers than the last mile, it can be easy for business leaders to overlook opportunities for improvement. For example, the latest and most visible innovations in package services focus on the last mile of the supply chain, optimizing and streamlining the many ways couriers can reach the doorstep. Fewer comparable innovations are disrupting the more opaque middle mile.
And because the middle mile is governed by an outdated hub-and-spoke model, it’s often the most vulnerable to disruptions. For example, delays at a single hub can result in delays at distribution centers around the world—and unhappy customers at home.
Think of the middle mile as the supply chain's Wild West. But with careful planning and route optimization, businesses can overcome these challenges and improve their middle-mile logistics.
How to Improve Your Middle Mile
Because of its untapped potential, even small improvements in middle-mile efficiency can have a significant impact on the overall cost of goods and your company’s margins. As a result, it is crucial for companies to carefully manage their middle mile operations in order to minimize disruptions and maximize efficiency. Here are some ways to get started.
- Bring middle- and last-mile logistics in-house. It can be difficult to optimize the flow of goods and services without accurate information about what’s happening in the rest of the supply chain. Bringing supply chain operations in-house can help business leaders gain more visibility and control over their middle mile, and improve their overall supply chain performance. By having a better understanding of what is happening in the middle mile, they can make better decisions about where to allocate resources and how to streamline their operations. Ultimately, bringing these functions in-house can help business leaders reduce transportation costs and improve customer service.
- Invest in a warehouse management system. Logistics leaders should consider investing in a warehouse management system (WMS) to optimize their middle-mile logistics and supply chains. A WMS can help business leaders by providing a software solution that streamlines the process of managing inventory, shipping, and fulfillment. Additionally, a WMS can help business leaders reduce costs and improve customer satisfaction by helping them to more accurately respond to nuanced fluctuations in supply and demand.
- Adopt route optimization software. Route optimization software can help supply chain executives manage the middle mile more efficiently by taking into account factors like traffic, weather, and road closures when planning routes. By using route optimization software, executives can make sure that drivers stay on schedule, deliveries are streamlined, and that resources are used effectively. The advantages of route optimization software include reduced fuel consumption, improved customer service, and a smaller environmental footprint—an especially important consideration for any business that wants to be seen as environmentally responsible.
If you want to optimize your company's logistics, it's essential that you have a complete understanding of the middle mile. By definition, the middle mile is the part of your supply chain that falls between the initial manufacturing stage and the final delivery stage. Because it encompasses such a large portion of your operation, even small improvements in this area can have a significant impact on your bottom line. Of course, achieving these improvements is easier said than done. The good news is that we’re here to help. Contact us today to learn more about how we can help you take control of your middle mile and stay ahead of the competition.