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Hi-tech last mile delivery

Examining the Last mile delivery concept; a resource and time demanding process for logistic operations.
Hi-tech last mile delivery
© RMIT University 2017

One of the biggest issues in any electronic retailing model is last mile delivery.

“The last mile is a metaphor used to describe the movement of goods from a fulfillment centre to their final destination. In other words, the last mile is the last leg of your product’s trip before it arrives on your customer’s doorstep.”

Last mile delivery is a resource and time demanding process for logistic operations. And businesses often outsource their last mile deliveries to third party logistics service providers, popularly known as 3PLs. However it is, perhaps, the most important process for omni-channel because customers are not concerned with which party manages the last mile, only that the goods are received on-time.

To implement efficient last mile logistics, timely and reliable information must be shared among supply chain members. Supply chain players operating in an omni-channel environment are turning to real time big data and analytics to assist with their last mile efforts.

A report by Deloitte offers five different ways omni-channel orders can be delivered to customers:

  1. Drop-shipping: A customer order triggers a shipment from a 3PL.

  2. Click-&-collect: Customers may purchase items online with an option to pick them up at a bricks-and-mortar location.

  3. Reserve-and-collect: Customers reserve items online, pick them up and pay at the physical store. This enables retailers to better manage their bricks-and-mortar stores’ inventories.

  4. Delivery lockers: Once customers make an online purchase, they are provided with a code for the designated locker (usually placed in convenient locations, e.g. train or gas stations).

  5. Same day delivery: This requires retailers to have items close to their customers and always in stock, either in a physical store or a warehouse. The mode of transport is typically bicycles or scooters.

To get a better understanding of each method, look at ‘Omni-channel Retail: A Deloitte Point of View (2015)’ below in the See Also area below.

The takeaway message here is recognising the impact of Real-time Data on Last Mile Deliveries.

Since customers order through multiple channels and multiple locations, all five approaches require “an enterprise-wide system that constantly provides real-time, accurate information about stock-levels, in-transit inventory, and specific information about the order” (Deloitte 2015, p.18).

This also means that a well-performing omni-channel supply chain should take advantage of new inventory management technologies to increase stock visibility and continuously evaluate shoppers’ behaviours and trends.

Keeping this in mind, Radio-Frequency Identification, which uses radio waves to read and capture information stored on a tag attached to an object, has been a most useful way for omni-channel retailers to keep tabs on inventory. Finally, putting all this together, predictive analytics software is used to monitor customers’ changing needs, facilitated by increased retailers’ responsiveness. Goods-to-person automation address the challenges in picking large quantities of single-line-item orders.

To gain further insights into technological solutions for last mile delivery, we suggest that you go through the Deloitte report and videos, by Taykit and GDS International in the interesting links section.

Have you ever thought about how retailers organise last mile deliveries?

Use Twitter and search the posts using the hashtag #lastmile. Find out what are the key challenges for last mile logistics and share your findings in the Comments area.
© RMIT University 2017
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