This paper examines the parcel delivery conundrum facing UK e-commerce businesses, analyzing why first-time delivery failures cost the industry an estimated £1 billion annually in re-deliveries and damage customer relationships. Using Soft Systems Methodology, the paper constructs a CATWOE analysis and Root Definition to model the current delivery system. It then evaluates enterprise mobility solutions — including GPS tracking, electronic proof of delivery (ePOD), and real-time workforce management — as practical remedies. The paper also considers environmental impacts and the technological infrastructure required for implementation, concluding with recommendations for how businesses and carriers can align to improve delivery performance and customer satisfaction.
Electronic commerce has made shipping more important than ever — not only in terms of cost, but in terms of how, when, and where goods are delivered. There are a vast number of shipping companies to choose from, and their advertising promises great results; however, this is often not the case in practice. Research has shown that the number one reason online shoppers abandon their shopping cart is shipping costs (Forrester Research, in: Bomford, 2012, p.1). In addition, research indicates that 61% of customers will cancel a purchase entirely if free shipping is not offered (comScore, in: Bomford, 2012, p.1). It is also reported that 62% of all online retailers offer free shipping, and that 49% of all e-commerce transactions during 2010 included free shipping. Free Shipping Day on 16 December 2011 reportedly "generated more sales online than any Friday in U.S. history," totalling more than $1 billion (Freeshipping.org, in: Bomford, 2012, p.1).
The shipping conundrum, however, is not necessarily concerned only with costs. In the work of Andrew Bomford (2012) entitled "The Parcel Conundrum", it is reported that the parcel conundrum is "an experience almost all of us seem to share. The swift efficient world of online ordering meets the messy realities of the analogue world we actually live in. And it all seems to grind to a halt" (Bomford, 2012, p.1). The article recounts the experience of Richard Wilding, Professor of Logistics and Supply Chain Management at Cranfield University, who was himself a victim of the parcel conundrum. Wilding states: "We were expecting a gift to arrive, and the courier firm told us it had been delivered. We told them we hadn't received anything, and the company said it had been delivered to a hedge. We haven't got a hedge" (Bomford, 2012, p.1). The box was finally discovered weeks later, in a hedge approximately half a mile from Wilding's house.
It is reported that some companies count a missed-delivery card through the door as a successful delivery when reporting on their performance. The missed-delivery problem costs money as well as frustrating customers. In the UK, "12% of deliveries fail first time, costing the industry an estimated £1bn in re-deliveries. For most people it's the frustration of a Royal Mail missed delivery card lying on the doormat. People frequently complain that some postmen deliver them without even knocking in order to save time. The same allegation is made of commercial couriers. Then there are the occasions when couriers delivering laptops or other valuables leave us waiting around all day before turning up at 17:59. A trip to the Post Office depot at 7am can be an irksome burden. And some couriers take your item back to warehouses on industrial estates many miles away" (Bomford, 2012, p.1).
According to a courier interviewed in the report: "It's difficult for us too. You turn up at a house and no one's in. So you phone up the company and they try to get in touch with the customer and find out if it's OK to deliver it next door, for instance. Often they can't get hold of the customer and you're standing there for half an hour or more wasting time. As with most service industries, of course, you get what you pay for. Customers paying for premium services can expect to get phone calls chasing them if delivery can't be made" (Bomford, 2012, p.1). One company stated that they would be happy to "follow people all over London trying to deliver a parcel as long as the customer paid for it. But most people opt for the cheapest option, or indeed free delivery, and that's where repeated attempts to deliver parcels make no financial sense" (Bomford, 2012, p.1). The majority of courier firms will reportedly attempt delivery three times at most.
A deliverer for eCourier — a business founded after its founder's tennis tickets were not delivered — reportedly searched for a better method of delivery and formulated an online tracking system using GPS, enabling customers to view the precise location of their shipment from dispatch to delivery. When clients can see that their driver is stuck in heavy traffic, they at least feel informed and, to some extent, their frustration is eased. According to the report: "There's nothing unusual in the technology. All courier companies can track their drivers. What's unusual is giving customers the power to do the same. Big courier firms will tell you if the parcel is in a depot or out for delivery, but not the precise coordinates" (Bomford, 2012, p.1).
The report also notes that vague delivery time windows do not assist those who are at work during the day, but that companies are "increasingly narrowing down delivery times" and using text and email to inform customers of when to expect their delivery (Bomford, 2012, p.1). There is strong motivation for the retailer to achieve delivery on the first attempt.
Tracking technology is reported to offer other possibilities — including tracking the customer. Blackbay, a company providing services to courier phones, has developed a smartphone application that allows delivery firms to locate their customers even when those customers are not at the stated delivery address. The technology is described as "quite straightforward… we're taking advantage of social media. Lots of people on Facebook or Twitter, for instance, can expose their location in a controlled way. This application uses that information to track you" (Blackbay, 2012, p.1). The customer specifies a delivery address but, closer to the delivery time, can use the application to allow the courier to locate them at a nearby alternative location via a handheld device. Safeguards can be built in to limit the duration of tracking, and both face recognition technology and a PIN requirement are possible additions. Blackbay reports the application is still under development but should be available within a year, with a premium charge.
The solution to missed deliveries is described as "a combination of low and high tech innovations. From neighbour delivery, to better communication with customers, to GPS tracking, slowly the misery of wasted time and wasted journeys to depots to collect parcels will hopefully become a thing of the past. And fewer wasted journeys will also help to save the environment. Studies by Heriot-Watt University have found a courier could try around 18 times to deliver a parcel and still emit less CO2 than someone driving to their local depot to collect it" (Blackbay, 2012, p.1).
The work of Karve (2012), entitled "Root Definition and CATWOE Model — The Soft Systems Approach," reports that the first step in Soft Systems Methodology (SSM) is to formulate the Root Definition of the system being studied, analysed, designed, or evaluated. "A Root Definition is a structured description of a system. It is a clear statement of activities which take place (or might take place) in the organisation being studied" (Karve, 2012, p.1). A properly structured Root Definition is comprised of three elements: (1) what; (2) how; and (3) why (Karve, 2012, p.1). It is expressed in the following form:
A System to do X, by (means of) Y, in order to achieve Z.
X = What the system does
Y = How it does it
Z = Why it is being done (Karve, 2012, p.1)
The "what" is the immediate aim of the system; the "how" is the means of achieving that aim; and the "why" is the longer-term aim of the purposeful activity (Karve, 2012, p.1).
The CATWOE analysis assists in properly formulating a Root Definition. CATWOE is a "mnemonic which helps identify and categorize all stakeholders [people, processes, environment, entities] of the system being analysed for formulating the Root Definition" (Karve, 2012, p.1). The letters stand for:
C = Customers or Clients
A = Actors or Agents
T = Transformation Process
W = Weltanschauung or World View
O = Owners
E = Environment (Karve, 2012, p.1)
The system customers are those on the receiving end "of whatever the system does" (Karve, 2012, p.1). The actors are those who "actually carry out the activities envisaged in the notional system being defined. Actors transform inputs into outputs" (Karve, 2012, p.1). The transformation process is what the system does to its inputs in converting them to outputs.
Regarding Weltanschauung, Karve states: "The 'world view' lies behind the Root Definition; it is the perspective from which the Root Definition is formulated. Putting the system into its wider context can highlight the consequences of the overall system. For example, the system may be in place to assist in making the world environmentally safer, and the consequences of system failure could be significant pollution" (2012, p.1). The owners are the individual or individuals who have "commissioned the system and who have sufficient formal power over the system to stop it existing if they so wished" (Karve, 2012, p.1). Environmental constraints include "ethical limits, regulations, financial constraints, resource limitations, limits set by terms of reference, and so on" (Karve, 2012, p.1).
Karve states that a CATWOE analysis yields "a more elaborate, all-encompassing Root Definition of the form: A System owned by O. To do W. By A by means of T. Given the constraints of E. In order to achieve X for C. A briefer version of Root Definition is: a T. system in which A do W. For C" (Karve, 2012, p.1). The following is an application of the CATWOE model to the parcel delivery scenario:
C — Customers
A — Drivers
T — Packages are transformed into successful deliveries
W — Use of ePOD mobility assures customers that drivers are doing what they are instructed to do, when they are instructed to do it, and how they are instructed to do it
O — The retailer or e-retailer
E — Standards of quality regulating courier deliveries (Karve, 2012, p.1)
"Real-time mobile tools improving delivery performance"
"Digital POD benefits for couriers and customers"
"Strategic recommendations for e-retailers and carriers"
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