Challenges faced in Scaling without Delivery Management System

February 25, 2023

Scalability is referred to as the ability of the business to be productive and profitable regardless of the market challenges or market demand.

According to research, 30% of businesses fail in their second year, 50% of small businesses fail in five years, and only 30% of businesses are able to manage in their tenth year.

Here we’ll discuss the most significant challenges faced by the business while scaling up.

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Top 5 challenges faced by the businesses while scaling their businesses:

Selecting the right technology

Different businesses having different demands require different technology for their business operations. However, there are some common features of delivery management software that are required by most businesses.

Checklist for the right technology that can automate your business operations

  • Order management – Technology must automate the order management process which includes- order acceptance, tracking of the stock, and order fulfilment.
  • Invoicing and payments – The generation of automated invoices and flexible payment options should be available. The invoices should be available to the customers via email or sms and on the customers’ applications.
  • Stock Management – Technology automates the stock management process and gives a detailed report on available and required stock to fulfil customer demand.
  • Distribution and logistics – Generates detailed data on distribution and logistics that help businesses to plan and organize the moving, and categorizing of products. It also allows them to optimize the physical movement of the orders.
  • Customer experience and service – Automates the customer service process by giving customers access giving feedback and raising queries. Good customer service can help in bringing in more referral customers.
  • Fleet tracking and management – Real-time fleet tracking should be provided by the technology you opt for. Features like route optimization should be provided as they help minimise the round turn time and reduce fuel consumption.
  • Digital payment collection options – The technology must provide multiple payment gateway integration which helps in making payment easy. The data must be updated automatically once the invoice is paid and the data of customers with pending payments should be generated. This helps in payment reconciliation and avoids confusion.
  • Integrates with SAP – SAP is software that assists in efficient data flow and information processing and can be accessed by the business on a single pane of glass dashboard.

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Lack of adequate funds

Scaling the business requires significant funds that might not be feasible for most of the business.

  • Cost-effective Technology- Most of the technologies available in the market have either high one-time set-up costs or high maintenance costs.
  • Last-mile delivery issues- According to SOTI Inc., 60% of the companies agree that last-mile delivery is the most inefficient process.
  • Cost of delivery- The delivery cost is very high for last-mile deliveries. It is 40%- 44% of the total supply chain cost.
  • Fuel- The cost of fuel rises if the driver is not clear about where to deliver. Delivery drivers mostly end up roaming around the place increasing fuel consumption.
  • Cost of drivers- The cost of drivers also increases when it comes to last-time delivery. As the business expands its areas it requires more drivers to fulfil the orders.

Shortage of customer demand

While scaling the business, many do not understand the customer demand which leads to thinking shortage of demand.

  • Understanding your target audience- Having a good understanding of your target audience is crucial when you decide on scaling up the business. Without proper understanding, it is hard to know the demand of the customers.
  • TAM, SAM, and SOM

Total Accessible Market (TAM) – The total available market from where the revenue can be generated.

Serviceable Addressable Market (SAM) – The total market demand for the product, that helps in calculating total possible revenue.

Serviceable Obtainable Market (SOM) – An estimated portion of revenue within a specific product segment a company is able to capture.

It can be a tedious task to understand the “Total addressable market” (TAM), “serviceable addressable market” (SAM), and “serviceable obtainable market” (SOM) without any accurate data.

Reaching out to a wider audience digitally

Without appropriate data, it is difficult to reach the audience digitally.

  • Customer Relationship Management (CRM)- Without efficient CRM software, it is difficult to understand the target audience digitally. Maintaining customers’ Excel sheets is exposed to human errors and doesn’t help understand the audience.

More experienced team

  • Scaling a business need expertise and hiring an experienced team is crucial to scale in order to scale with proper strategy and planning.

The decision to scale a business can be an exciting and nerve-wracking process. You might be wanting to expand your business or introduce new products. Regardless of what you want, scaling a business is definitely challenging.  However, delivery management software has made scaling the business more simplified and easy.

Scalability in business might seem to be an easy process, however, sometimes it can become mind-numbing and turn out to be a disaster. If you are thinking to scale up the business our expert team can help. Book an appointment to discuss your business and see how we can assist you.

Hope You Enjoyed the Read!

Ravi Garg Founder & CEO

He loves to explore. His passion for helping delivery industries in all aspects flows through in the vision he has. In addition to providing smart solution to make delivery process flawless, Ravi also likes to write sometimes to make it easier for people from business industry looking for digital solutions.