The emergence of home food delivery is nothing new but exploded in 2020 during the global pandemic as people sought easy options for their grocery shopping and meals. The industry has become a whopping $220B market over the last 5 years. Many companies in the food and beverage space from restaurants, grocery stores and food manufacturers have been quick to adapt to the new on-demand delivery trend, but it comes with significant challenges.
A leading pet food manufacturer focused on providing fresh, high-quality, natural meals for household pets began seeing rapid growth during the pandemic, delivering fresh pet food to the nation’s biggest retailers as well as directly to customers.
But with growth came the challenges; the company’s long-time carrier had an abysmal 55% on-time delivery rate with crucial big box retailers like Costco and Target, and the company was missing out on savings from their contracted lane rates due to lack of transparency into their shipments. They also had to deal with the challenges of charge backs from their retail customers and the dangers of low customer satisfaction in the highly competitive retail environment. And they were struggling to meet growing demand for direct-to-customer deliveries, particularly in the booming New York City market.
After doing a deep root cause analysis with the logistics team, RXO was able to identify some key areas that were contributing to the problems, including:
- Lack of training for carriers wasn’t providing status updates to allow visibility into on-time delivery
- Errors in charge backs for individual shipments that had been actually consolidated
- No standard operating procedures ensuring reliable home delivery service
RXO developed a lean strategy to focus on addressing these key points with an omni-channel approach to increase on-time delivery, reduce cost and meet customer service level requirements.