ICT solutions for HR management

The progress of technology advances with giant steps, causing a great impact in all industries and sectors, which reaches and produces adaptive solutions for companies.

The departments of human resources are not an exception to this reality.
Long, very long is the path that has been taking place since those days when the personnel were managed through spreadsheets.

tecnología y recursos humanos

Current situation

Although the solutions are many, there is some weakness when implementing new technological systems in the departments of HR that allow professionals to manage human capital efficiently.

True, it is becoming increasingly common in SMEs and new startups to realize investments for the implementation of ERP systems. However, most of these systems are more focused on financial, production or logistics aspects, and in some cases, they do not have an HR module and we need to look for external solutions.

Facing this scenario, HR professionals see an overload of data and information that is really difficult to manage through traditional methods, as currently, the human resources departments of a company not only assume personnel management tasks such as recruitments, layoffs or payrolls, but also the nexus in charge of speeding up and improving communication between the company and its employees.

Technology in human resources

The internal communication of any company can be complex. And it is precisely here where Information and Communication Technologies (ICT) come into play, with the aim of streamlining these processes and procedures; In addition to finding multi-tasking tools that are responsible for communicating and being able to perform the administrative tasks that become endless.
When we talk about human resources technology, we start from three bases:

  1. Computer applications for the complete management of people

These are software that offer solutions that span multiple processes, such as staff selection, recruitment, analysis of performance indicators, ongoing training, job site definition, risk prevention, etc.

  1. Advancement of telecommunications

It has led to remote labor relations. In some way, it has helped to reduce personal contact, reduce waiting times and errors and reduce the number of offices. Work teams are now more and more geographically distributed, remoteworking is a key tool for improving efficiency and capability.

  1. Robotics

Robotics allowed developing continuous changes in the production processes, transforming the profiles and reducing the employment index. Robots have long been in factories, while backoffice activities are still very manual.

In any case, we have long seen “bots” (robot abbreviation) automatically performing repetitive tasks over the Internet, such as scheduling doctor appointments, informing us about the available banking services or managing our connection to a Pay TV system. Even behind the erotic lines there are robots!
It is clear that these software programs have a long way to go if we apply them to provide services to our collaborators in our tedious HR tasks in backoffice.


ICT solutions for HR management

Enterprise Resource Planning (ERPs)

At the moment it becomes indispensable for many companies to have a system that not only manage administrative tasks, such as calendars, schedules, incidents or vacations; It also allows the company to cover the changing legal requirements, for example.

With this type of software, we unify tasks and allow execution times to be reduced considerably. While deciding for the best management software (ERP) that suits us, it is important to know the volume of the company. Small brands can still find software brands that offer optimal sector solutions.

As we increase the volume of the company, we must say that the range of possible solutions is reduced. We can say that we basically go to hegemonic ecosystems, Microsoft or SAP. When I say ecosystems, I mean the model that both have set up, defining a true global platform that isolates the core of the ERP from all the applications and parameters that can be developed.

This central core is periodically updated to include all the essential modifications to guarantee new services, legislative changes by country, or solve problems of any kind, of the rest. Above this non-modifiable core we can “connect” applications of all kinds that respond to all business problems, in the case of HR, payroll management, training, risk prevention, career plans , control of the workers, etc.
All this in a global context and with virtually monthly updates, so that we will always have the latest “core” updates that will improve the efficiency of our management.

This architecture is necessary to be able to develop the strategic line that these two software giants have set up and that will take them in medium term to contemplate only solutions in the cloud and with payment by service (SAS).
There is one of the points that must be taken into account, the fact that the current trend of “servicing” that affects all products, in the case of software and ERPs is definitive.


E-learning platforms

Corporate e-learning can transform a whole company.

In an increasingly competitive world, it becomes essential to have specialized personnel in very specific tasks. And that is why training is essential. Managing the training of the human team of a company is not an easy task. That is why e-learning training has become a great solution with multiple advantages

Just a few years ago it was unthinkable to have what this type of platform offers us: intranets that facilitate communication between teachers and students, live classrooms, interactive exercises, etc. We cannot forget the flexibility that this solution offers both to the company and to the professionals, allowing the training to adapt to work days.

Moodle is one of the most popular e-learning solutions available to companies to implement distance learning through their HR departments. But little by little, others start to appear, as evol Campus for example.

Registration, validation and signature systems

Adapting to changes and legal requirements by complying with regulations and obligations is very necessary, but also involves many resources. There are ICT tools developed precisely to offer solutions to this type of regulations and legal requirements in a simpler way.

Through them, it is possible to efficiently and safely manage the signature of documents, validate employees’ work schedules, register days …
And thanks to the cloud servers, all the data generated by companies are managed virtually in real time by people assigned to it; In addition, these types of servers facilitate tasks for those who are responsible for HR, allowing them to access the information from any device.

In short, immediacy and global availability are the differential values of these solutions.
Electronic signature systems such as Docusign are an example of what we are saying.


Gamification tools

Let’s start with the beginning: what is gamification?

It involves the use of techniques, elements and dynamics of games in non-recreational activities, such as the work environment. The objective is to enhance motivation, strengthen behavior to solve complex problems, improve productivity, enhance learning and evaluate individuals.

Facilitating the interaction between employees or members of a team, encouraging them through prizes, levels or ranking games, can provide them with a supportive and motivational tool at work, as well as improving productivity and commitment within the company.

There are already multiple tools that allow these tasks and techniques to be implemented in order to inform and encourage employees.

A good example of this is the Badgeville startup, which offers a platform for managing fidelity programs based on the behavior of online users. This tool allows us to reward users with personalized gifts.


Although the implementation of this type of ICT solutions may seem as a complex task a priori, as they are still unknown to many companies and professionals, we must take into account that suppliers are prepared to design solutions adapted to each company, guaranteeing start-up, initial training, technical support and continuous assistance, to ensure that their introduction and subsequent development are successful.

While digitization of factories and productive processes is already a reality for many companies if we look at the processes of the backoffice of companies and, in particular, human resource management, we will see that there is a long way to go. We find inefficient processes, manuals and management without criteria of efficiency and capability.

In summary, what should be done by HR departments is not to ignore advances and get updated tools. Only in this way it will be possible to prevent companies from becoming obsolete facing unremitting technological advances.

Entrepreneurs that aim to change the world

cambiar el mundo tecnologia

Entrepreneurship is the result of the concern of a person who, individually or in group, identifies and develops products or services that can help meet needs, desires or solve problems.

That’s what I want to talk about today, people with concerns that have decided to turn their ideas into projects that aim to change the world and make it a better place…


Trees that shine in the dark

And no, it’s not about artificial trees …

Entrepreneurs Daan Roosegaarde and Alexander Krichevsky have developed a method to make tree leaves shine in the dark in a way that is very similar to jellyfish.

It may seem crazy. And the truth is that it may be a crazy idea, but it has not been made only because of the enthusiasm of its creators, since they already have the first prototype of the project. It is still a small plant, which has been given to the genome of the chloroplast, the DNA of luminescent marine bacteria, using a process called “Splicing”.

This project has been supported by the University of New York and also by the company Bioglow of Krichevysky. And it is not surprising at all, since these two entrepreneurs finally managed to market their project and take it to the streets of cities. We are talking about a great saving of energy and, therefore, a great benefit for the economy and the environment.


Bulbs that do not require electricity

Stephen Katsaros is the founder of Nokero International. This company is building a better, more durable and solar powered bulb for the use of 1.6 billion people around the world who live without electricity.

“To put light in the dark” is the motto of its movement that is able to change the life of the people who live in places where electricity does not arrive. This allows getting education, work, and said in short, having a better future perspective.




Mick Donegan is the founder and director of SpecialEffect, a child care institution dedicated to using cutting-edge technology to improve the quality of life of people with disabilities.
More specifically, the organization helps young people with severe disabilities to play and enjoy computer games.

It may seem a minor issue, but for a person with a disability it is especially important to do things that other people can do. In this sense, for a child with a serious disability it is very important to play computer games as it is done by other children.

This fact makes them change their mood, makes them feel like other children, and therefore helps them overcome their disability.



The Dabbawalas of Mumbai

An example of an especially interesting and hopeful entrepreneurial model is that of Dabbawalas in Mumbai. It shows that in places where poverty still wins the battle, brilliant and spectacular initiatives can emerge.

It is a food distribution service from home to work or study places.
Its operational model is the subject of study by the largest multinational companies, since it achieves a virtually zero error rate in the more than 200,000 daily deliveries they make. Even with some precarious meals, collapsed cities, and a very small time window. All the elements involved must be properly synchronized so that the requested food arrives at the appropriate time.

I leave you the link of a video explaining this extraordinary model in detail:



Behind the startup Canva is Melanie Perkins, who has developed a free online graphic design program (to be exact with a freemium business model) that is used by nearly 10 million people.

10 million graphic designers? NO! Canva is used by all kinds of people. And the tool allows every user to make infographics in a simple way, design campaigns of ads on Facebook with templates and give it infinity of uses.

With Canva, Perkins, little by little is democratizing graphic design. It’s a success, as there are not many opportunities on the market that can democratize a sector at this time.



Biotechnological fertilizers that fight against climate change

Climate change is one of the biggest problems in the world that we must face and stop. Projects like the one of the entrepreneur Ramon Bacre leaves the door of hope open.

This Mexican entrepreneur has based his project on the biocarbon, which has been enriched with microorganisms to improve their qualities as a fertilizer, thus competing with other fertilizers with the added value of eliminating CO2 from the atmosphere.

Bacre has, with its project, the objective of reducing the carbon present in the atmosphere through a sustainable business model.



All the examples that we have analyzed, have in common: their entrepreneurial spirit, their great creative capacity and the tenacity necessary to realize their dreams.

But above all, they have in common the fact of trying to make the world a little better place. It is worth supporting these initiatives.

The evolution of electronic commerce in the near future


Looking back just about 5 years ago, we can see there has been an alignment between supply and demand in the field of electronic commerce. Until then, the online purchase of virtually any product on the network was still not a reality.

Far from slowing down, ecommerce will continue to grow organically at a dizzying pace. The reasons are probably that it is simple, convenient and affordable. No doubt much of this upward evolution of ecommerce is due to the strong commitment of hundreds, even thousands of entrepreneurs to this business model. Companies and entrepreneurs have worked very hard over the last five years to raise awareness among the users and make them realize that buying online is safe, easy and convenient.

And now, what is the key to survival? What are we facing?

The truth is that what works for some might not work for others and every case will depend on how we use, take advantage and make the most of its resources and tools. Those who have been in the trade for a while will only need to consolidate customer loyalty; others will find their strength in the commitment to a strong brand, while for others it will be key to have a good internationalization… What is certain is that there are many changes ahead. Guessing them all is no easy venture, but I dare to predict a few:

The power of Big Data

Getting to know what users want, how, when and why is essential to the success of an ecommerce and the implementation of data analysis in e-commerce can be critical to the ROI of any online store.

I previously discussed the power of Big Data and its relation to e-commerce in this post I invite you to read:  http://ignasisayol.com/en/big-data-i-comerc-electronic/.

Manufacturing on demand

Stock control is vital for any offline business, as it allows having the products that costumers demand available. And in the field of online sales, it is just the same and this aspect is necessary for success.

The evolution in this sense is towards shortening the design and manufacturing deadlines, thus reducing the production costs, as we will be able to know what the acceptance of the product is or whether it will be sold well in advance.

Some failure examples in terms of bad management of stock are many supermarkets that have decided to sell online but have not been able to control stock yet. They have been accumulating products without an effective digital strategy that allows them to obtain the customers they need.

An example of the trend for manufacturing on demand we are discussing is the platform Bubok, the first ecommerce that enables authors to self-publish their books or works through a business model that allows printing on demand. Thus, the editing costs are paid once the book has been sold.

Online and Offline will go hand in hand

The offline channel has gained even more importance: in customer service or distribution, for example. Everything will be connected and the tendency will not be towards the creation of online shops, but towards the digitization of traditional businesses –in other words, what we could call the alignment between retail and online business.


People prefer to do the shopping in a supermarket. And the reason is straightforward: you can toss meat, fruit, your dog’s feed, cosmetics and cleaning products in the same shopping cart, pay it all at once and take it home straight away.

The concept is the same for an online store. However, it is not very convenient to shop from a mobile device, despite the fact that online shopping is increasing. In fact, almost 70% of online purchases are already made from a mobile device, but it is not practical to access multiple platforms or web sites, make the payment in each of them and, in some cases, have to pay for the different shipping costs and even receive the products at different times.

And here comes the doubt, what can small businesses do? Perhaps the solution is to search for marketing agreements that allow them to be present on different platforms.

In the end, it is all about listening to customers, giving them what they want and making it easy for them.


Cloud computing, the future of the supply chain


Cloud computing and virtualization are two trends that are raising great interest in the business world today. These are concepts we use daily but we do not always know exactly what they mean. We can find the following two definitions on Wikipedia: “Cloud computing is a form of computation that has its foundations on the Internet and by which shared resources, software and information are provided to computers and other devices on demand as a service”; “Virtualization is a mechanism that enables to share a physical machine in order to run multiple virtual machines. These virtual machines share free CPU resources, memory, disk and network connection that would otherwise be untapped while waiting for peak working times.” That is, virtualization is a technique that allows sharing a physical resource with multiple virtual users , which is a necessary element to provide network services (Internet), but not necessarily only linked to the Internet, as it could occur in a private environment; while cloud computing is a very powerful way to get services distributed and accessible anywhere. This last idea is indeed very powerful when it comes to supply chains, although we can consider virtualization and cloud computing as associated concepts, since cloud computing uses virtualization as an essential tool to ensure the services provided.

When we talk about cloud supply chain we mean ensuring a collaborative development on the Internet from the start of the chain until the product reaches the consumer’s hands. The approach to the use of cloud computing is intensive, as it is the most efficient way to manage a global business with many participants as agents like the supply chain. In a supply chain, it is especially important to have a cloud ERP software built to operate from the start, because it will enable us to efficiently manage all the agents involved. These agents involved are product suppliers, customers, carriers, service providers, and freelance employees distributed all over the world. Therefore, it will be essential that the common software is accessible efficiently and at a low price through a simple browser, from anywhere, taking into account that access conditions may vary. It makes a big difference, for example, if I am at the headquarters with an excellent Internet connection, or if I am in a small hotel in a remote country working as a salesman and I try to inform about orders made by customers, or if I am the manager of a store that wants to update the shared stocks of the company. Only an ERP designed from the start to operate in the cloud will be efficient in such different environments as the optimum management of the supply chain requires.

The new technologies are no longer seen as a cost to businesses and have gradually become part of the strategies, thus investing a significant part of the budget. The goal: to help manage and promote interactive workflows, as productivity starts to be understood as well beyond the office. The key is immediacy and security. Gone are the days when marketers provided their customers with short-termed paper catalogues. Today, sales require dynamism, agility and speed; now paper catalogs are replaced with digital catalogs updated in real time providing all the information about the product, its features and availability. The immediacy offered by new technologies enables to safely complete business in less time. Providing customers with a complete service through dynamic, quick and reliable management no doubt requires using the cloud.

Supply chain in the cloud

Distribution centers require a high level of control and there is increasingly less room for human error. And for this reason, the cloud ERP systems we were discussing before are crucial. In this process the cloud has many things to offer: dynamic and flexible growth, aspects of availability, exact control of costs, as well as test environments and development. All these advantages are often in the background when the issue of safety comes up. There are still many people who give up the advantages of cloud computing because of the intrinsic fear of using this medium intensively.

On a deeper analysis, we can see that a cloud ERP solution can guarantee the same levels of security as a traditional ERP solution on-premise. Just as in traditional models, we need to provide physical security, transmission security, storage security, access security, data security and applications security.

The only difference is that in the case of traditional ERP, security issues are managed by the internal IT resources of the company while in the case of cloud ERP, it is managed by external resources. An audit conducted by third parties can certify that external processes are documented and followed, but in most cases, external providers of cloud services pay more attention to those details than the internal resources would. In short, the cloud ERPs are as safe as the traditional on-premise ERP systems. Some security problems are different and perhaps less known, but once understood, many experts conclude that cloud systems are safer than the often poorly managed, in terms of security, internal applications.

In conclusion, we can say that there is a clear trend to manage the supply chain using ERP and cloud services. This is so because the requirements for flexibility, dynamism, geographical spread and control you need to manage the supply chain perfectly adapt to the features of cloud computing. The security problem can be overcome if you have a reliable business partner with consulting capacity, and the development of a customized solution. It is always necessary to have a third party auditor that certifies the compliance with the safety standards we need in our business.

Certainly, each company is different and will need to adapt the process of cloud computing to its particularities, but it is a path that everyone must take if we want to be competing in the global world we live in.

Omnichanneling: the challenge of retail


Omnichanneling1-300x204As customers, we expect to be treated fairly and receive an effective service from companies. Brands are aware of this and they know that our level of demand is growing at about the same pace as the competition. Thus, we will only go back to a brand if they provide an exceptional service and they make an effort to surprise us. Hence, the great importance of the concept “customer experience” over the last years, referring to the consumer experience or shopping experience.

The way we buy now has nothing to do with the way we did 10 years ago. In fact, the purchase experience might be broken down into three phases; first the search of information, secondly the economic transaction and thirdly the delivery of the product or service. These three phases can be combined in different ways and performed in different media. Today, our process of purchase always includes the search of information about the product or service online. Before the purchase we check comments and ratings of other users who already have consumed what we want to buy. This search of information is often complemented going through the physical points of sale only to consult doubts with the sellers or closing the two remaining phases in this precise moment.

Therefore, the economic transaction and the delivery of the product or service can go together or separately. We can pay through the network and collect the item from a physical point of sale or we can pay through the network and have it delivered at home. We can also pay and collect it at a physical point of sale and many other combinations that can be given. Summarizing, the models are completely opened and we cannot say that the Internet is definitively killing the sale and delivery at a physical point or vice versa. The most veterans will probably remember the famous “Video killed the radio star” that the Buggles were singing in 1979, but today there is no video any more and the radio is more alive than ever before.

The rise of e-commerce has long worried the retail sector. Many wrongly predicted the end of the physical store, like the Buggles did with the radio. However, consumers have eventually decided that, although they still prefer the physical store as the main sales channel, the digital support has contributed to fully satisfy their wishes. Consumers’ demands automatically increased and the retail sector had to adapt to their new customer profile. In face of the inevitable ‘renew or die’, the safest bet is to expand the digital space to the world of the physical sale.

This new scenario has pushed retail companies to adapt to new consumer demands and uses technology as a powerful tool to adapt their communication and the ways in which they interact with customers, to improve customer experience and provide added value to every purchase.

When we talk about omnichanneling, we are actually referring to the evolution of the multichannel. It is no longer enough to be present in the consumer channels (not just digital, but physical). It is essential to effectively manage these channels so as to create a flexible and satisfactory shopping experience, adapted to their consumption habits and where the use of technology is also present. For example, if a customer visits the physical store to buy a product he has researched on the website, he needs to find a coherent response.

Developing and implementing an effective omnichanneling strategy is not easy. Coordination of the different areas of the company is key to maintaining the consistency required. Each channel needs its own kind of communication. Dealing with the customer via e-mail is different from communicating through social networks or over the phone. Nevertheless, it is indispensable to define a strategy that allows that the messages and actions carried out result in the accomplishment of a coherent global communication. We cannot act differently when communicating on twitter, on the phone or answering emails. Customers will probably interact with us through many media and they cannot detect that we are incoherent.

If we think we can provide the service in different ways, often through subcontractors, it is especially important that we monitor and make sure that everyone contributes to generating the same shopping experience, whatever it is that we have defined in our strategy. We need to coordinate properly the internal and external resources to have everyone aligned.

I dare say that beyond communicating consistently from all channels, which is obviously essential, the secret lies in listening to customers and consumers, not only to offer them a full range of solutions, but also to guide them to where they need. We need to guarantee a purchase experience that is coherent with the strategy we have defined. If we can accomplish this goal, we will be successful, otherwise we will disappear. These are the rules of an exciting sector and that moves at great speed, so we’d better wise up!

New challenges in supply chain planning

Planning supply chains consists of all the processes, activities and agents involved in satisfying customer demand and providing the required product or service in proper conditions. As we can see in the chart below, these processes range from managing the products and services portfolio, to the delivery of products or services to our customers.


The evolution of new technologies and the use of new IT tools have affected the planning of supply chains. On the one hand, they facilitate and improve the design, control and management. On the other hand, they have given way to a completely new scenario, full of challenges and new opportunities that require updating, revision and constant adaptation of their planning.

The new opportunities associated with B2C e-commerce, for example, or the consumers’ demand to receive customized solutions have transformed the market, creating new challenges when planning and managing supply chains and other areas that are part of the products and services provision.

Until recently, planning supply chains took place in a framework where the applications and technological tools, despite simplifying and optimizing the processes, did not condition planning in a decisive way.

Today, the planning complexity of any supply chain has increased, partly due to the technological advances and the unstoppable sophistication of all kinds of tools and applications; and besides, of course, to the need for customized operations and the demand for an immediate supply in an ever-growing market.

All the areas related to supply chains have been affected by these developments, but especially and more significantly, planning. Today, markets require the development of more accurate and precise stock controls, sales and growth forecasts backed by increasingly detailed and complex data and studies, strategies design in both production and asset management, and even more dynamic, flexible and adaptable logistics to suit a reality in constant change. In this regard, we can even consider having different product distribution channels, tailored to the level of service required by the different types of customers.

As mentioned before, e-commerce or electronic commerce has been one of the main causes of this transformation. There are many others, but this case meets all the challenges and opportunities related to the planning of supply chains that are present today:

– The provision of services and customized solutions to customers / consumers.
– The transformation of prices and services policies
– The increasingly complex customer loyalty
– The importance of costs policies
– The growing and stronger international presence
– The need to fragment traditional market niches

On the one hand, business opportunities have increased. On the other hand, survival has become a matter of vital importance, versus the traditional pursuit of profitability. Within the current framework and scenarios, proper planning of the supply chain becomes essential to ensure the success of any business strategy.

About the Lean philosophy


The Lean philosophy has its origins in the 80s, when a group of experts described the concept after comparing the General Motors (GM) production processes with the Toyota Production System. The conclusion reached is that processes can be optimized by removing everything that does not create value, reducing total delivery times and searching for the automation of the activities involved in these processes.

At first, the Lean tools were designed with the aim of making production processes more efficient. However, they soon became part of the continuous improvement strategies of the service and logistics industry. Today, Lean is a working system that enables faster, more flexible work processes through the elimination of practices that generate ”waste”, by removing the so-called ”dumb” inefficiencies.

As for the contribution resulting from the implementation of Lean tools to logistics processes, ”logistics operations can generate between 10% and 40 % of the product cost and over 50% of this cost accounts for activities that do not add value. Therefore, the Lean Logistics scheme ensures agile processes by considerably reducing variation.” In logistics and operations in general, variability is something to be avoided in our processes.
Lean tools, including value maps, allow for a deep understanding of logistics processes, managing to create customer-oriented processes, reducing everything that does not add value, generating reliable knowledge and information flows throughout the chain of supply. Some of the results it entails are the reduction of delivery time, the decrease and increase of inventory turns, and a significant reduction in bad quality costs caused by materials management among others.
There are increasingly more expressions like ‘Takt time’ (an expression that combines the German word Takt, meaning rhythm, and the English word Time), which can be defined as the rate at which a product must be manufactured so as to meet customer demand. It is this cadence or rhythm that synchronizes all the activities, from production to product delivery. Supply chains are becoming more ”pull” and less ”push” (both terms having their actual meaning). We have less inventory. Ideally, we only produce a product and move it across the supply chain when we have an order from our customer. It is the customer who pulls the entire chain, going from ”push” to ”pull”. It is not companies that “push” the products to the market across the supply chain, but it is the customers who “pull” them.

Due to this paradigm shift, one of the most important aspects of current operations in general and the Lean philosophy in particular is to access information focusing on the end-customer actual demand, that such information is reliable and that it can go through all the links of the chain without reductions or amplifications, making the appropriate adjustments. The collaborative work of the entire supply chain is essential to avoid wrong predictions about the customer needs in favour of a real demand management focusing on production planning and product delivery management. Therefore, we can state that producers do not currently compete against producers, but supply chains against supply chains. In this regard, coordination between the different companies that conform every supply chain is essential to achieving both effective and profitable systems.

A better balance of the entire supply chain, a reduced turnaround time and significantly improved customer service are some of the advantages allowed by the implementation of this type of Lean philosophy in companies.

We can finally claim that staff training plays a crucial role in developing a truly reliable and effective logistics system .Employees must be trained and educated to master the methodology and the tools. The results can be surprising, but they largely depend on the employees’ commitment. In this regard, management by objectives is essential. We need a comprehensive objectives policy across the company, translating every single objective, so that each member of the organization has a goal that is measurable, close, dependable on the employee and achievable. Not everyone in the organization needs to know what the EBITDA is and how to improve it!.

In this globalized world, where the environment is constantly changing, companies that do not commit to prepare for excellence will hardly be able to compete and even survive.

‘Last mile’, a major logistics challenge to face in e-commerce


last-mile-ignasi-sayol (1)The phrase ‘Last mile’ or last kilometer is now fully integrated in the logistics field, but it does not originally come from the logistics sector. In fact, the term originated in the field of telecommunications and it refers to the final section in the supply chain, which actually provides service to the user. Eventually, the term has extended beyond its original sector and it is now fully accepted in the field of logistics.

E-commerce has been growing exponentially in recent years, whereby the problem of the last mile is becoming a serious one, both for logistics operators and for distribution companies (retailers). Today it is a major logistics challenge to overcome the many difficulties in the chain of distribution or delivery to the final customer: traffic jams, difficulties to park when making deliveries, or the impossibility to deliver in the absence of the customer. We need to take into account that end users do not want to pay for the delivery of the product. They want the product at the best price and with a zero delivery cost if possible.

It is true that the space-time distance between the place and time of production of goods or services and the demand centres has been generally settled thanks to improved infrastructures and transport systems. However, the problem of the final step in the supply chain to the end-customer remains unsolved. This is where the ‘last mile’ challenge comes in, because of the large-scale problems it entails. The first and most important: unsatisfied customers.

Customers are increasingly demanding a fast and comfortable delivery service, regarding it a key differentiator. The problem is that this demand by customers and companies engaged in e-commerce is not entirely solved. Besides, it involves high additional costs for logistics operators.

The issue affects not only cities or towns. If we talk about isolated regions or localities with access or transport infrastructure difficulties, for example, the problem is much bigger and so is the challenge. Here we no longer talk about customer dissatisfaction, but about their lack of access to goods and services and the limitations to which they are consequently subjected.

Another direct consequence is that many companies have to face the inaccessibility to markets that could be very interesting.

What measures are being taken?

Firstly, we have worked on the flexibility in the distribution, achieving a faster service and an improved tracking of orders, but the delivery process is still unsatisfactory. The classical model of express parcel delivery by van is reaching its cost limit, since the cost of delivering 50 packages to the same destination is much lower than that of delivering 50 packages to 50 different recipients.

Among the measures taken to tackle the problem, besides the possibility to pick up the package in person at the nearest courier office, are to include a second delivery attempt at the address after communicating directly with the customer, usually by phone.

The service of package delivery and return at Delivery Points (shops near the address) is increasingly more common as an alternative to home delivery. Thus, customers can pick up their package with the advantage of being able to do so during opening hours.

In any case and despite the efforts, the solutions are not fully satisfactory. There is still a long way ahead that requires the reinvention of logistics business models and a great deal of innovation so as to find efficient solutions that enable customers to receive their orders easily.

The search for alternatives has not ceased, and the giant Amazon, for example, in addition to trying (without much success) installing lockers in locations with heavy traffic, recently surprised us with the use of drones (still in experimentation).

These are just some Interesting proposals that still have not proved a practical and effective solution in a war where the winner will be the one winning the battle of the ‘last mile’.

As I see it, and following the example of the telecommunications sector, the ‘last mille’ issue needs to be solved as it was in this sector, adding levels of service. There is no other option than to segment the market and provide differentiated services to customers. Most likely, if we want to have the maximum comfort with the delivery place and time, we will have to pay a higher price than if we agree to collect the package at the nearby florist during their opening hours.

Today no operator is thoroughly working in this direction and, thus, we are witnessing a real price war coupled with the exponential growth of e-commerce, which is becoming an explosive cocktail for many companies.