Where Margins Really Leak: Fixing Process Inefficiencies in the Last Mile

In a market shaped by rising costs and competitive pricing, margin pressure in wholesale and distribution is often blamed on external forces. In reality, the issues originate much closer to home, inside day to day field operations.

For many, the last mile is where process inefficiency quietly undermines profitability. While ERP systems are great at managing finance and inventory effectively, they frequently lack visibility once sales and delivery teams leave the warehouse. Magic happens on the road, and the result is a gap between system control and real-world execution, and that gap is where the margins leak.

The Last Mile: Where Distribution Strategy Loses Control

The last mile represents the point where pricing, ordering, and delivery decisions are executed in real time. It is also where many distributors rely on informal processes that sit outside their core systems.

Typical workflows still involve:

• Manual order capture

• Verbal pricing confirmation

• Paper delivery documentation

• End-of-day data reconciliation

Individually, these steps appear manageable. Collectively, they introduce friction, delay, and inconsistency into operations. Over time, that friction translates directly into margin leakage, customer dissatisfaction, and over encumbered operational systems.

Common Sources of Margin Leakage in Wholesale Distribution

Margin leakage rarely comes from one large failure. It accumulates through repeated, low level inefficiencies across field sales and delivery operations.

The most common causes include:

• Manual order processing

  Orders taken on paper or from memory increase the likelihood of missed SKUs, incorrect quantities, and inconsistent pricing before the order ever reaches the ERP.

• Pricing clarified after the sales visit

  When pricing decisions are confirmed later, sales momentum slows and discounting becomes reactive rather than controlled, chipping away at distribution margins.

• Delivery inconsistencies resolved post-delivery

  Incorrect quantities, substitutions, or returns are often discovered at the customer site and amended later, creating administrative overhead and invoice delays.

• Sales reps managing operational friction

  Instead of focusing on revenue generation, field reps spend time correcting errors, chasing clarifications, and managing avoidable disputes.

These issues don’t just affect efficiency. They directly impact margin, scalability, and customer trust.

Why Process Inefficiency Is a Margin Problem, Not an IT Problem

Process efficiency in distribution is often framed as a productivity or technology initiative. In reality, it is a financial discipline.

We see consistently that businesses who systemise execution outperform those that rely on effort alone. Efficient businesses reduce variability, eliminate rework, and ensure decisions are made once, correctly.

In distribution, inefficiency shows up as:

• Credit notes and invoice adjustments

• Additional delivery runs

• Excess administrative work

• Inconsistent customer experience

Each individual issue appears minor. At scale, they create a persistent drain on margin and limit the ability to grow profitably.

Fixing Last Mile Inefficiency Through Operational Clarity

Distributors that improve margins sustainably focus on how work actually happens in the field. They maximise automation and control at the point of execution and ensure field activity is captured accurately in real time.

Effective last mile process design typically includes:

• Digital order capture integrated with ERP systems

• Real time pricing visibility for sales reps

• Accurate digital-first delivery documentation at the point of drop

• Seamless synchronisation between field teams and head office

When field sales and delivery operations are aligned with core systems, errors fall, confidence rises, and operational effort decreases.

Turning Last Mile Efficiency Into Competitive Advantage

At DSD Assist, we work with wholesale and FMCG distributors facing margin pressure caused not by market conditions, but by process inefficiency in the last mile.

By connecting field sales, delivery, and ERP systems into a single operational flow, distributors gain greater control over pricing, ordering, and execution. The outcome is improved margin visibility, reduced rework, and a stronger foundation for scalable growth.

Growth Follows Process Clarity

When distribution margins are under pressure, the solution is rarely to push harder or add more people. The more effective approach is to eliminate friction in last mile execution.

Margin leakage thrives in manual processes, delayed decisions, and disconnected systems. Fix those, and growth becomes easier, more predictable, and far more sustainable.