E-Fulfillment for Attended Last-Mile Delivery Services in Metropolitan Areas

Funding:

Deutsche Forschungsgemeinschaft (DFG)

Contact Person:
Charlotte Köhler

The project „E-Fulfillment for Attended Last-Mile Delivery Services in Metropolitan Areas“ is funded by Deutsche Forschungsgemeinschaft (DFG) and conducted by Prof. Dr. Jan Fabian Ehmke (FU Berlin) and Prof. Dr. Catherine Cleophas (RWTH Aachen). The DFG provides funds for two PhD students doing research on route planning as well as revenue management.

The proposed project focuses on the planning of attended last-mile delivery services. As the customer has to be present for order delivery, a service time window has to be agreed upon already when the order is accepted. Last-mile delivery services such as recently available food delivery in Germany (e.g. AllYouNeedFresh, Bringmeister, REWE) offer comfortable food delivery within a customer chosen time window. 

The time of order delivery is frequently the sole physical contact between e-commerce supplier and customer. Therefore, this event is decisive with regard to customer satisfaction and perceived product quality. History shows: When delivery services are not realized in an efficient and customer-oriented manner, the underlying business model is not competitive.

Last-mile delivery services are present mainly offered in cities. Particularly in those metropolitan areas, logistics service providers have to rise to the challenge of successfully planning attended last-mile delivery services considering uncertain demand and traffic conditions. In metropolitan areas, the high population density offers great potential for e-commerce, while the varying traffic conditions increase uncertainty of delivery.

Many customers ask for tight service time windows and punctual deliveries, but tight service time windows significantly reduce the provider's planning degrees of freedom. They also lead to increased delivery costs or to reduced reliability in an environment determined by high competitive pressure and low profit margins.

The proposed project considers service time windows as a scarce resource and as the critical interface between order capture and order delivery. Our research objective is to extend tactical and operational planning for e-fulfillment optimally utilizing this scarce resource. Our focus is on the conditions and effects of different degrees of integration between the previously separate planning tasks of order capture and order delivery. What type of information has to be aggregated and exchanged in which way? How does the quantity and quality of information affect the success of integrated planning? How do planning methods need to be extended for an integrated solution?

In the pursuit of our research objectives, we will extend and combine two research strains based on a joint simulation system. We aim to develop new and extended approaches to profitable, customer-oriented, and sustainable e-fulfillment through extended methods of value-oriented order capture and order delivery.

Publications

J. F. Ehmke, A. M. Campbell, B. W. Thomas (2016): Vehicle Routing to Minimize Time-Dependent Emissions in Urban Areas. European Journal of Operational Research, Vol. 251, Nr. 2, S. 478-494, doi:10.1016/j.ejor.2015.11.034.

C. Cleophas, J. F. Ehmke (2014): When are deliveries profitable? Considering order value and transport capacity in demand fulfillment for last-mile deliveries in metropolitan areas. BISE – Business & Information Systems Engineering, S. 153-163, doi 10.1007/s12599-014-0321-9.

J. F. Ehmke, A. M. Campbell (2014): Customer Acceptance Mechanisms for Attended Home Deliveries in Metropolitan Areas. European Journal of Operational Research, Vol. 233, Nr. 1, S. 193-207, doi 10.1016/j.ejor.2013.08.028.

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