A Minnesota company’s on-demand delivery app gets supplies to sites faster, cheaper, and more efficiently.
The global pandemic has brought to light the fragility of many supply chains. Product shortages in grocery stores, food processing slowdowns, and e-commerce businesses scrambling to meet surging demand all illustrate supply chain choke points. But entrepreneurs say technology can help solve these problems. This week, I’m highlighting Midwest tech businesses that are disrupting conventional supply chain dynamics for positive outcomes.
The problem: Final-mile — or local, short distance — goods deliveries are challenging to complete through big parcel delivery services such as FedEx or UPS. They can be inefficient, expensive, and take longer than desired. This is especially true in commercial and industrial situations, such as getting construction materials to a job site. With the recent emergence of on-demand economies, customers want goods fast, and they want visibility into the status of their deliveries. Larger commercial/industrial businesses with many locations in different markets experience inconsistencies with service and pricing when using traditional courier services for final-mile deliveries.
The innovation: On-demand delivery app Dispatch lets businesses order a courier service directly through a local driver instead of a courier agency. The app runs algorithms to boost cargo capacity and speed, said the Bloomington, Minnesota business’ CEO and co-founder Andrew Leone. It’s similar to on-demand services such as Uber or Lyft in that a gig worker receives the delivery information when they accept the job via the Dispatch app. The customer receives transparent information about their order along the way, including visual tracking, driver ETA, driver contact information, and accurate wait time billing. “Our focus is the industrial distribution segment, that final mile. It’s an antiquated space and there’s a lot of pain there,” Leone said.
The impact: Dispatch improves delivery efficiencies for customers, which translates to cost savings. “Most of our customers have branch managers solving this problem so it’s not an efficient corporate way, because there’s not a consistent solution. We were able to bring technology and a consistent network to all these locations,” Leone said. The app also utilizes and optimizes cargo capacity for the gig workers’ existing vehicles rather than requiring new delivery vehicle purchases. Maximizing the space in every vehicle in the Dispatch network reduces miles traveled and carbon emissions.
The backstory: Leone and a couple partners used to own a distribution center and saw a big change in final mile deliveries over the past 10 years. “It used to be much more route delivery and inventory replenishment… We saw a lot of pressure put on our customer base… from consumers needing jobs completed that day,” Leone said. The partners started their own job site delivery fleet, but that is difficult to scale well. So Leone pivoted and built Dispatch to tap into the market of independent courier drivers with their own vehicles. “It was built for the B2B enterprise space,” he said. Dispatch incorporated in 2015 and launched in 2017.
What’s next: Dispatch is available in 31 markets, three of which were added during the pandemic. Business has not taken a big hit during the pandemic “because we’re very vertically spread. We’ve seen some customers shut down — like restaurant suppliers — but we’ve seen other verticals really surge, like plumbing,” Leone said. “On top of that, there’s a huge shift in the supply chain and the way people are thinking about it. We’re seeing a lot of our distributors move to curbside pickup. The final mile is something almost everybody is aware of now.” The company is working on an adaptation plan because businesses are getting used to “the new normal” of e-commerce and curbside deliveries, and it plans to continue scaling to be in 50 markets by the end of this year, Leone said.
Do you know other Midwest tech businesses transforming supply chains? Let me know so I can highlight them in a future newsletter. Email firstname.lastname@example.org or connect on Twitter @centereddottech to share ideas.
Today’s tech headlines:
- The Information Technology & Innovation Foundation is calling for the creation of an energy technology commercialization foundation. ITIF says such a group would work closely with the U.S. Department of Energy to support entrepreneurs and organizations in bringing clean energy technology to market. (ITIF)
- Researchers at Northwestern University and the University of Illinois at Chicago are among those touted for using artificial intelligence modeling to gather data relevant to developing potential vaccines and treatments for COVID-19. (Healio)
- Three Michigan startups are among the recipients of $104 million in NASA grants to develop space technology. Atlas Space Operations, based in Traverse City; DornerWorks, based in Grand Rapids; and Soar Technology, based in Ann Arbor, each received investments for their promising technologies. (MITechNews)