As identified in our recent survey report, this year's top priority for organizations and their technology functions is to adapt fast digitally. Speed is the name of the game.
My recent interview with Estafeta's Head of Application Development—Juan Manuel Monterrubio Portilla—revealed an organization that stared into an abyss of disruption at the start of the COVID crisis.
Their traditional logistics traffic fell 83% in one week. But, by innovating at lightning speed, Estafeta was able to turn adversity into opportunity. Coming out of the crisis, their logistics traffic has grown 50% above their pre-lockdown levels.
Estafeta's story illustrates the advantages of having a mature, low-code digital factory at the heart of an agile IT organization. Having updated their case study, there were so many more details and insights that Estafeta had to share that I've included them in this blog post for others to learn from.
My thanks to Juan and his colleagues at Estafeta for sharing so generously. If you've already read the case study, you can skip ahead here.
1. Who is Estafeta?
Juan – Estafeta is one of Mexico's largest logistics companies. We were established in 1979, and our 8,200 employees handle nearly 43 million shipments per year, using around 3,600 vehicles, five aircraft, and approximately 1,000 owned or franchised stores.
2. Please can you describe your role and the make-up of your app dev team?
Juan – I'm in charge of an application development team comprising eight technical leads and currently fifteen developers. At any time, we're running eight or more application development projects in parallel. Typical projects involve two or three developers in a team, though occasionally more complex projects involve four or five developers. We're mostly self-sufficient but sometimes use additional developers from partners.
3. Can you tell us about Estafeta's low-code journey?
Juan – We first started using OutSystems in 2015. We had a pretty mixed range of business systems, including large ERP, off-the-shelf apps, and bespoke logistics systems. Bespoke development was mainly .Net, but also some Java.
We were finding integration an increasing challenge, and within the application development team, we suffered a bit from specialism silos, which made work allocation and collaboration more difficult.
We hoped that by adopting OutSystems for bespoke system development, we'd breakdown those silos, make integration easier, and of course, speed-up delivery. And in the past five years, we've delivered on those objectives.
Our first project, "MiEstafeta," was delivered in partnership with OutSystems. This was an 11-week project to deliver a customer-facing web and mobile-friendly application that allows users to schedule pick-ups, track shipments, and manage their Estafeta relationship.
Since then, we've trained and certified most of the members of the development team. They typically have a .Net development background. Nowadays, when we have new members join the development team, we find it quick to get them up-to-speed using the free OutSystems self-study guided learning paths.
In the past five years, the team has delivered all kinds of applications using OutSystems, including:
- Core systems – include transport management, track and trace, route planning, CRM, and operational dashboards.
- Customer-facing apps – include MiEstafeta, and point of sale—both internet sales, and in-store.
- Mobile apps - including the "SOE" app used by drivers to execute routes, scan packages and prove delivery, and the Estafeta mobile app used by customers.
- Backend services – that integrate with SAP and multiple other systems, making it faster and easier to develop and maintain the customer-facing apps that Estafeta needs.
We now have a continuous delivery pipeline, with weekly and sometimes daily releases across a portfolio of over 25 OutSystems applications.
4. How has using OutSystems helped your Agile maturity?
Juan – We've invested in agile development practices since 2015. Our agile maturity has developed alongside our use of OutSystems. Within the team, having a common platform for all kinds of development—web, mobile, and backend services—has made developers much more interchangeable. Breaking down the specialism silos and the power and speed of development leads to smaller team sizes. That helps agility, and we have more capacity, so we're running more projects in parallel.
Moreover, faster and more visual development has brought us closer to our customers. Every project has a business product owner. We typically work in two-week sprints, and our product demos elicit a lot more engagement and feedback from users than we had before.
For us, agile and using OutSystems have grown up together at Estafeta. It's hard to imagine one without the other.
5. How did the COVID crisis affect Mexico's logistics market?
Juan – In a word, dramatically! As a logistics provider, we are an essential business. So, we had to keep running even though lots of our B2B customers were forced into lockdown.
A mainstay of our business was B2B full-truck-load transportation. And in the first full week of lockdown, we saw an 83% decline in business volume. As you can imagine, this was a very gloomy and worrying time. We had no idea when the market would start to recover.
On the other hand, the B2C e-commerce side of the logistics market was about to boom. With most of the population sent home and told to socially distance, demand for home deliveries from e-commerce companies was bound to pick-up. Consumer behavior change accelerated. Mexico had low adoption of e-commerce compared to the USA and Europe. But adoption has leaped forward. According to some industry commentators, what would have taken five years has been compressed into a couple of months.
Moreover, the need to maintain social distancing meant we had to change a lot of the manual procedures involved in the logistics process. For example, handing an Estafeta mobile device to a customer to capture their proof of delivery signature was suddenly impossible. Similar procedures in stores, when customers drop-off packages for delivery, also had to change immediately.
6. How did Estafeta respond to this disruption?
Juan – The company had to step out of its comfort zone and find new opportunities. We had thousands of idle delivery agents and vehicles, and we needed to put them to use as quickly as possible.
We saw that a client—one of the Mexico's largest pharmacy chains—was sinking under the pressure of prescription deliveries. They had a lot of customers sheltering at home, and no resources or systems to support pharmacy-to-home drug deliveries. This was an obvious partnership opportunity—a way for Estafeta to put delivery agents to work while helping vulnerable members of the community get the medicines they needed.
7. What challenges did this pose your app dev team?
Juan – We had lots of super-urgent development requests. Responding fast wasn't just a matter of pride; it felt like a matter of survival. One surprising thing was how our productivity wasn't impacted by the need to work from home. Speaking personally, getting rid of the daily commute through the Mexico City traffic was a huge time saver.
8. Please describe the apps you developed and how these helped?
Juan – There were six reactive web applications that our team delivered during the COVID crisis, grouped under four initiatives.
Pharmacy-specific Express Delivery
Pharmacy Store Backend
To support our new pharmacy partnership, we needed a web-based app for pharmacy store managers to request and monitor deliveries, including GPS delivery tracking. This was a really rewarding project to deliver because the pharmacy company was utterly overwhelmed with delivery requests, and they had no system at all to control and keep track of everything.
We delivered this application in three days—using just one tech lead and one developer.
We were able to develop this so fast, as we reused modules from previous developments. The app was integrated into our main logistics track and trace system.
The app was used to schedule thousands of deliveries of vital medicines to patients during the peak of the COVID crisis.
Mobile App for Pharmacy Deliveries
Paired with the pharmacy store app, the mobile front end was used by Estafeta's delivery agents to fulfill medicine deliveries. The app enables the agent to pick-up a route of multiple deliveries, provides GPS directions to each patient, and supports the proof of delivery with GPS coordinates and photo. It even has support for exceptions, for example, if the delivery could not be made for some reason and the medicines then have to be taken back to the pharmacy.
This app was delivered in six days by a tech lead and one developer. The app was used by delivery agents to execute the medicine deliveries.
Entrega QR - Contactless Sign for Delivery
Many of our B2B customers insist on signed proof of delivery, and if we cannot prove delivery, we might not get paid. In the past, delivery agents passed their mobile device to the recipient, and they provided their signature through the touch screen.
With social distancing, handling a device in this way was no longer allowed. To collect signatures, we needed a contactless approach, fast.
We came up with a smart solution. The delivery agent's mobile device displays a delivery-specific QR code. The recipient now uses their smartphone to scan that QR code, and a reactive web page opens on their device. No app download is required. The webpage allows the recipient to sign for the delivery on their own device and click submit.
We delivered Entrega QR in four days using a tech lead and one developer. More than 3,000 delivery agents use the app, and over 600,000 deliveries were confirmed this way during three months of the COVID crisis.
Store Point of Sale - Contactless Sign for Drop-Off
This app works on the same principles as Entrega QR. It provides a contactless way for customers at our stores to sign to acknowledge their package drop-off. The point of sale terminal displays a consignment-specific QR code to the customer. They scan this using their smartphone and use the reactive web page on their device to sign for the drop-off.
This app is in use at nearly 1,000 stores and dealerships, and at a further 462 point of sale stations.
This app was delivered in two days by a tech lead and one developer. Over 900 Estafeta employees and 1,200 franchisees use this application. Today, around 20% of packages enter the Estafeta logistics system thanks to this app.
Estafeta Externos – App for Third-party Delivery Agents
Despite the massive hit that the COVID crisis initially dealt to Estafeta, we have bounced back even stronger. The combination of pharmacy deliveries, booming B2C deliveries, and gradually recovering B2B logistics, have led to a fifty percent growth in our logistics traffic.
We've been so busy that we've had to open additional regional warehouse space—four new warehouses around Mexico City and several more warehouses around the country. We now have more business than our own delivery agents alone can fulfill.
To solve this, we engaged over sixty third-party logistics partners for last-mile delivery of B2C packages. The Estafeta Externos app is what makes this new business model possible.
Estafeta Externos Backend
The backend app supports the route monitoring of subcontracted deliveries. It integrates with our central logistics system and finance system, but its main purpose is to feed the accompanying mobile application.
Estafeta Externos Mobile App
This is a stripped-down version of the app used by Estafeta's own delivery agents, which we call Sistema de Operaciones Estafeta, or "SOE" for short. This was a slightly more complicated development project. One tech lead and a single developer delivered both the backend and mobile apps in less than two weeks. We spent one week scoping the design concept, and then development took five days, testing one day, and we immediately went live.
The Estafeta Externos mobile app is used by third-party drivers to fulfill last-mile deliveries from Estafeta warehouses to customers. Over 2,000 sub-contracted drivers have used the app to fulfill over half-a-million deliveries. The app provides each driver with his route, including multiple deliveries, and it guides them to each address and allows them to confirm each delivery. In June 2020 alone, nearly 360,000 packages were delivered by drivers using this app.
Also, to support this new subcontracted delivery business model, we needed a new mobile app added to our depot staff’s specialized mobile devices. This app, called “Porteador” (or “Porter”), is used to scan the packages as they are handed from Estafeta to the external delivery agent.
9. What are the main lessons learned through this crisis period?
Juan - I suppose we are lucky to have a mature low-code digital factory. If the pandemic had hit six years ago, before we adopted OutSystems, we would not have had the agility to deliver these kinds of solutions at the speed that was needed.
The crisis has been a moment of truth for our IT strategy. And, it has been a moment of truth for OutSystems 11 as well. Most of the frontends we needed to deliver were for use by customers, pharmacy staff, and sub-contracted drivers. So, developing and deploying reactive web apps was crucial, so there was no need for them to download apps from app stores. The apps work fast and efficiently on any browser and provide a native-app-like user experience.
The benefit for my team is a more unified development experience. We develop once for any device, and there's no need to deploy via app stores, which can often introduce delays.
The other thing these particular apps demonstrate is the importance of reuse. That's why we were able to deliver so many powerful solutions in a fraction of the time people might have expected.
We were lucky to have so many apps and API's to borrow from. All of the apps we delivered during the crisis called on API's we'd previously used. In many cases, the apps we were integrating with were developed on OutSystems. And, several of the apps were slimmed-down versions of apps we'd previously developed on OutSystems. Architecting for reuse is an important principle and something that OutSystems has helped us with from our earliest development five years ago.
10. Where next for OutSystems at Estafeta?
Juan - We have lots of plans. We have a process improvement program rolling-out across the company, called "EstafetaLo." This is throwing-up vast numbers of extra opportunities to use OutSystems to replace legacy systems while implementing new streamlined processes.
Tackling these process improvement opportunities with OutSystems will give us the agility needed to continually optimize our operations. We don't plan to replace our ERP system, but pretty much any other operational system that isn't already on OutSystems is likely to be a few years from now. And as a result, we'll eliminate a lot of expensive, slow-to-change legacy systems, and have even more agility to adapt as the market throws-up new challenges and opportunities.