5 Keys to Reducing Costs in Building Materials Distribution

Construction material costs may be starting to stabilize at last—though some pockets of volatility certainly remain—but that doesn’t change the basic dilemma faced by distributors of building supplies: you need to keep customers happy with quick turnaround and high-precision deliveries, but you also need to keep your delivery costs under control in order to maintain your margins.

This can be a challenge for a handful of reasons: For one thing, last-minute delivery orders are common in the industry, and they can cause delivery costs to rise. At the same time, the chaotic nature of many job sites means that it can be hard to ensure clear records, which in turn makes it difficult to get paid on time—or at all, in some cases. 

Simply put, finding and implementing strategies for reducing last mile delivery costs will be non-negotiable for a lot of build material distributors around the country going forward. Luckily, DispatchTrack is here to help. 

Without further ado, here are 5 keys to reducing delivery costs when delivering building materials. 

Faster, Smarter Route Optimization

Route optimization platforms often tout a pretty obvious source of ROI: if you can reduce your number of miles driven by finding the most efficient delivery routes, you can save fuel costs and get more deliveries out of each route.

This is absolutely the case, and it can have a huge impact. But that’s not the only way that routing can impact costs. The routing process itself is often a huge time suck for distributors, so a route optimization platform that enables you to speed up the process can reduce delivery costs in that way. By the same token, a faster solution can shorten your delivery lead times, meaning you’re able to handle customer orders more efficiently and reduce costs that way as well. 

Then, there’s the question of how efficient your optimized routes actually are (this is where “smarter” comes into the picture). If you’re just solving for the shortest distance, you may be missing out on important nuances that can yield potential increased efficiencies. For instance, you might want to factor in driver/technician skill at the routing stage, so that you can reserve your more expensive high-skilled team members for jobs where their skill sets are actually required. This makes your routes more cost-efficient in the long run.

2. Improved Proof of Delivery

Like we said at the top of this post, when you can’t get accurate documentation at the delivery site, it can be more difficult to get paid. The result is that you’re sometimes making deliveries for free. 

Luckily, this has a pretty easy fix in the vast majority of situations: enhanced proof of delivery. By equipping drivers with a mobile application that’s fully connected to your last mile delivery software, you can give them the tools to ensure total visibility—and a complete audit trail—for every delivery. 

Specifically, you’ll want an app that can enable drivers to capture photographs at the jobsite for proof of delivery, as well as signatures and notes. Your proof of delivery should be automatically geo stamped and time-stamped, so that you have indisputable proof of what was delivered, when, and what condition. If a customer complains about damage after their invoice shows up, you can show them definitive proof that the item was received at the delivery site undamaged. 

Of course, most of the time disputes like that won’t come—but having pictures to send out in the invoice will still speed up payment in most cases. 

3. Full-Lifecycle Customer Communications

There are the costs that you plan for—fuel, driver hours, materials, etc. And there are the costs that crop up unexpectedly—unplanned returns, redelivery attempts, and the like. It might seem like many of the things in the latter category can’t be mitigated with last mile technology, but in point of fact the right capabilities can have a huge difference here. Specifically, the right customer communication capabilities. 

For instance, if you’re able to digitize the process of confirming delivery schedules with customers, you can more effectively turn up delivery dates that no longer work for the customer. This means you can avoid loading product onto trucks that isn’t going to be successfully delivered. 

If your last mile delivery software gives you the ability to connect with customers throughout the entire delivery lifecycle, you’ll have a number of other opportunities to turn up potential issues. On the day of delivery, you’ll also be able to connect with customers in real-time if there are exceptions or last minute changes. This level of connectivity makes it much easier to respond to changing circumstances without losing out on efficiency. 

4. Integrated Pallet Scanning

Scanning items onto and off the truck one at a time when you’re delivering pallets with multiple items in them is obviously tedious and expensive. Luckily, it’s possible to find a last mile solution that supports pallet scanning via mobile app. 

This has the potential to save significant loading and unloading time—but it can also help you get prioritized at busy customer delivery sites. The end result is that you can speed up deliveries at virtually every stage of the process, and save significantly on costs as a result. The trick is to ensure that the pallet scanning capabilities offered by your last mile delivery mobile app integrate seamlessly with what’s happening on your ERP and other related systems.  

5. Streamlined Pickup Logistics

When you can offer flexible fulfillment options—e.g. by providing will call and pickup options for their orders—you can make yourself even more valuable to your customers. But how can you do that in a way that still minimizes costs?

Unfortunately, that’s a question that many delivery and logistics solutions don’t have an answer for. Efficient pickup logistics is, in some ways, just as complex as last mile delivery—but it’s an afterthought at best for many solution providers. 

This is a huge missed opportunity. Why? Because by optimizing the pickup logistics process from end to end, you can reduce costs and improve customer experience.

How? By digitizing the process from end to end. In practice, that might look like this:

1. Customer order online—they’re presented with pickup times based on capacity restrictions you’ve set within the system. 
2. When the pickup time is approaching, the system sends an automated reminder to the customer. The system also automatically alerts store or warehouse associates that it’s time to pick that customer’s order. 
3. When the customer arrives at the pickup site, they check in online and an alert is sent to the associate. 
4. The associate brings the order out to the customer and captures a signature and proof of pickup via the mobile app. 

At no point in this process should store or warehouse employees need to open the last mile delivery solution on a desktop in order to figure out what to do next. Instead, the entire process should be managed through the mobile app. When you can do that, you can prevent associates from getting overworked, you can ensure that there are no traffic jams at the pickup site, and you can ultimately reduce the costs associated with this fulfillment channel significantly.

There is more to successful building materials distribution than cost-efficiency—so it’s of paramount importance to find ways to decrease costs that don’t sacrifice quality of service. By adopting some of the best practices we laid out above, you can do precisely that.