For our digital transformation project, we analyzed Redjepakketje.com, which is a parcel courier provider in the B2B market. The parcel courier industry in the Netherlands is very interesting, because it’s dominated by one firm (PostNL), but due to the internet, smaller players have emerged to take a piece of the pie. And that pie is large, because the B2B parcel industry grows hand-in-hand with online shopping.
We conducted an interview with the founders of Redjepakketje.com to identify processes in their daily activities and their current business model. It turned out that Redjepakketje.com already implemented a lot of IT to take care of the planning, routing and communication with web shops of clients.
When analyzing the industry, one important aspect came to light: there is a huge power of buyers. Buyers (in this context companies) are very price-sensitive, demand a high quality and are able to switch to different courier providers, without a lot of costs. Buyers are very price-sensitive, because a small decrease in price per parcel could potentially have a huge impact on their profit (taking into account that a lot of packages are send by companies every day). This made us focus on IT solutions that would either increase the service level, or decrease the costs.
Three processes were identified that needed improvements:
- Availability of drivers: Currently Redjepakketje.com uses regional managers that manually collect the dates and times that each driver is available to work
- Hour registration of drivers: Drivers are on the payroll. Currently they send their worked hours via email at the end of each week. Due to information asymmetry between the driver and Redjepakketje.com, this could have the potential of moral hazard.
- Estimated delivery time: Currently Redjepakketje.com estimated the delivery time of each recipient on a route in the morning. This estimate is bound to be inaccurate for the recipients that are at the end of a route, which leads to absence of recipients. This leads to more unnecessary costs for Redjepakketje.com that can’t be redeemed.
Our proposed IT solution is to create an integrated system that includes availability registration, hour registration and Track & Trace in combination with GPS in one system. The availability registration should be a digital platform on which drivers can select their own availability. This will decrease costs for scheduling and shifts the responsibility to the drivers themselves. The use of GPS in the track & trace system will result in more accurate estimated delivery times, because the delivery time of each recipient on a route can be updated throughout the day. Because of the use of GPS and timestamps, hour registration of worked hours by drivers can be done automatically based on the GPS data.
This IT solution does not require Redjepakketje.com to change their business model, but it does improve their chances for their biggest opportunity: collaborating with large online e-commerce platforms. If they can shift their focus from small business to larger e-commerce platforms, their piece of the pie will become a lot bigger.
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