We’ll start today’s post with a little segue.

My son is a “gear head”. He got his start working for a Mercedes dealership but quickly got bored. He quit and went back to trade school and learned all about machining: the use of mills, lathes, drill presses, CNC machines and industrial size 3D printers. This turned out to be the perfect set of skills — knowing how to work on cars and knowing how to craft and fabricate complex custom parts.

He’s now a founding partner of a small start up in town. They build custom cars for very rich clients who typically spend $200,000 – $500,000 on their vehicles. Many of them are what arecalled “resto-mods” which is an abbreviation for restoration-modifications. In other words, taking an old car and completely restoring it, but replacing all the old components — suspension, brakes, engine, transmission — with modern equivalents. The finished vehicle often looks like the original but drives like a brand new modern one, right off a production line.

Here’s one of the finished products (click to play video with the sound turned up. It’s worth it!):

The art of building these custom vehicles requires not only an extensive set of standard tools but also a large number of specialised tools, and often some very custom built tools too. For example, here’s a totally custom tool specially developed by the shop to enable cutting exhaust pipe at precise angles:

The end result of all this extensive work? A beautiful and unique vehicle that precisely fits the requirements of its customer in every single detail, perfect for its job.

Now, why am I bringing all this up? Well, funnily enough it all relates back to mapping in a very roundabout way.

For roughly the last 30 years people have been starting to use maps in their lives. It started slowly and then grew exponentially, especially for consumers, once the internet took off. And in parallel with that the use of maps in business has gradually grown. Even now it’s not pervasive in the enterprise, but at least maps have slowly made their way into business analytics products like Tableau and Power BI. It’s now even possible to add a basic map to a spreadsheet in Microsoft Excel 365, at least in a rudimentary way.

But there is a fundamental problem: all of these mapping products, including ones from the enterprise mapping technology behemoths like Esri, are general purpose tools. Translating back to the automotive world for a moment, it’s like having a very basic set of spanners and wrenches. To use these generic products for any very specific business problem is actually very difficult, and even if you do use them, they don’t really provide what you need and they really aren’t fit for purpose.

What you need in these cases then is a very specific product. Rather like that custom built resto-mod vehicle — precisely fitting the needs of the customer in every single way. But, unlike that custom vehicle, it can’t break the bank! It has to be affordable and provide a significantly better return on investment.

So that brings us to this week’s topic: the second in the series of “Mapping Amazing” companies. Today we’re going to focus on a small start up based in Munich, called Mily Tech.

Mily Tech got its start just a four years ago in 2021, when its founder, Miloš Zlatković, realised that there was a significant problem in the pervasive and growing industry of last mile delivery.

The problem revolves around something called “Out of Home delivery” or “OOH delivery” whereby a parcel or package is delivered to a smart locker or a pickup and delivery counter. OOH delivery is perhaps slightly less common in the US than in Europe and Asia, but the need for it everywhere remains strong and it’s growing like crazy…

Think about it.

The need for OOH delivery is obvious:

• Parcels get stolen from front door steps.
• Deliveries get missed because the customer isn’t home.
• Deliveries can’t be made because there is a locked or key coded gate.

And there’s another significant incentive for delivery companies: a smart locker is a single delivery point for dozens of parcels, so use of them significantly increases delivery efficiency and reduces carbon footprint.

In the US this OOH delivery is dominated by Amazon Lockers. But in other markets many delivery companies national mail carriers are providing OOH delivery, mostly in the form of smart lockers.

At first glance the problem would seem to be a classic site selection challenge. Where do you put the lockers? You can’t just carpet bomb a whole city. It costs too much money and you can’t just set up a smart locker anywhere you want. And just like opening up a retail outlet in the incorrect location, it’s a very costly mistake to pick the wrong location.

And this site selection problem is different in every market. Tokyo is very different from Sydney which is very different from NYC.

But it doesn’t stop at putting the lockers in the correct location — it’s not fire and forget problem.

Once you’ve established your locker network you to have to make sure the utilisation of them is continuously monitored, optimised and adjusted. Why? Because the environment around each locker constantly changes. The number of parcels being delivered changes constantly. Sometimes a particular set of smart lockers is under utilised and sometimes it’s over subscribed. Competitive locations may pop up or disappear. And the population and demographics are always evolving.

Like all good companies, when Mily Tech initially looked into solving this problem, they started by talking to a ton of potential customers. They wanted to understand the precise issues, the root causes and, just as importantly, the set of tools the companies were currently using in an attempt to manage the challenge.

It was during this discovery process that the light bulbs quickly started to go off. It was like these big delivery companies and national mail carriers were trying to build a custom car using a set of basic wrenches and spanners.

Not only that, the set of tools they were using fell well short of addressing all the problems. Even if they came close, they had to accomplish it using multiple sets of tools across several disciplines. You can probably imagine: spreadsheets in one department, BI tools in another. And if you were lucky —very lucky — maybe a geographically insidious system (GIS) tool in a third.

Basically it didn’t work. Last mile delivery companies were desperately in need for the equivalent of that perfect, custom resto-mod car!

So that’s what Mily Tech set out to do. Build the perfect custom software platform to solve this very tricky problem. It’s a platform that transcends several disciplines. It’s not a spreadsheet. It’s not a BI tool. And it’s definitely not a general purpose GIS.

Using Mily Tech customers are able to build an optimal network of OOH delivery points, manage them for maximum efficiency and then easily scale them to expanded or entirely new markets.

And they’ve already had tremendous success. They’ve won business from DHL in Europe as well as a number of national mail carriers, for example in Italy and Slovenia. And now potential customers are starting to ask the internal question: “Why aren’t we using MilyTech?”

You’d think the market for last mile delivery is actually pretty small. There’s only so many delivery organisations after all. But they deliver hundreds of millions of parcels every day and every tiny gain in efficiency gain makes a huge difference to the bottom line.

But delivery isn’t the only problem to solve. There’s actually an even bigger problem. And it’s about optimising returns. Why? Because returns are a pain and expensive. They are the bane of not only every delivery company, but also every e-commerce company too. And there are orders of magnitude more e-commerce companies than delivery companies.

Mily Tech contrasts this problem with last mile delivery and they’ve given it a name. They call it “First Mile Returns”. And they’re coming after the problem to solve it. Stay tuned!

In the meantime, if you’d like to learn more check out milytech.com.

Until the next time…

---

The Mily Tech Product in Action: