Redesign of Last Mile Delivery

Aditya Batham Dibyansh Jalan Tarun Innani

Industrial Engineering and Industrial Engineering and Industrial Engineering and
Management Management Management
RVCE RVCE RVCE
Bengaluru, India
adityabatham@yahoo.in
Bengaluru, India Bengaluru, India
dibyanshj@gmail.com taruninnani@gmail.com

Tejas Karwa
Industrial Engineering and
Management
RVCE
Bengaluru, India
tejas_karwa@yahoo.co.in
Abstract— One predicament that constantly turns up while
shopping online is when the order will be delivered. Moreover,
the availability of the customer at the time of product delivery
is always essential. The requirement of this constraint
minimizes the easiness of ordering the product online. This
mismatch leads to deliveries being re-scheduled more than
once for the same order. Keeping this in mind the existing
problem, this project is aimed at developing an efficient
delivery system by providing electronic key management to
provide access to customer for order pick up. DMADV
methodology has been followed for the development of the new
product. Exploratory study has been performed for capturing
the voice of the customers and gaining insight from the
interview with the delivery personnel. Process study of E-
Commerce Service Provider followed by the Value Stream
Mapping of the entire delivery process led to the redesign of
last mile courier delivery system by E-Commerce Service
Providers.
Keywords— E-Commerce service providers, Electronic key
management, Last mile delivery, Smart locker
I. INTRODUCTION
The increased popularity of e-commerce is already
visible on the streets due to the growing number of delivery
vehicles in residential areas. As home deliveries become
more and more common, the amount of failed delivery
attempts rises. Express delivery companies require
consignee’s signature in order to deliver the shipment, and
often the consumers are not at home when the delivery
attempt occurs.
A failed delivery attempt leads to increased delivery costs
as the shipment needs to be re-delivered or even returned to
the shipper. Responding to the increased demand of small-
sized frequent shipments incurred by ecommerce has become
one of the biggest challenges for logistics express delivery
companies.
II. LITERATURE REVIEW
In order to resolve the limitations in last mile delivery,
many delivery methods have been created and developed. In
this report, the focus is on the present alternatives for the
last mile delivery and on the smart courier delivery system.
A. Gurgaon Postal Department
The Gurgaon division of the Postal Department has
launched a postal locker service at the Udyog Vihar postal
campus. The lockers can be hired at fee of Rs. 750 per year
and used to store parcels, registered letters, gifts and goods
purchased online. The service will particularly benefit the
working population, who are mostly unavailable at home
during the day to take delivery of these items. The 100
postal lockers that are being offered by the postal
department would be available to individuals as well.
Subscribers who rent a postal locker, will receive an SMS
and a call from the postal department whenever they receive
an item. These items can be collected from 8am to 6pm on
working days.
B. Pick up Station with convenient stores
SF Express Company cooperated with 7-11 Convenient
Chain Stores to combine its delivery and send services into
7-11 outlets, and more than 100 stores of 7-11 have started to
implement this collaboration in 2011. Since the service range
of 7-11 CVS is not big enough to cover SF Express’s
customers, SF Express started to establish its self-own CVS
in 2011 in Beijing and Shenzhen.
However, since the business of convenient stores is too
complicated to arrange for an express company, the majority
of SF Express’s self-owned CVS shut down or cancelled
their retail service. This is because running this service not
only incurs deficit but also expands service range, time and
cost.
III. METHODOLOGY
DMADV approach has been followed to guide the entire
project. DMADV is a Six Sigma framework that is focuses
primarily on the development of a new service, product or
process as opposed to improving a previously existing one.
This approach – Define, Measure, Analyze, Design, and
Verify - is especially useful when implementing new
strategies and initiatives.
A. Define
The goals of the first phase are to identify the purpose of
the project, to identify and then set realistic and measurable
goals as seen from the perspectives of the customer and the
stakeholder(s). This project is aimed at improving last mile
delivery by eliminating redundant deliveries and providing
access to customers for order pick up.
B. Measure
Next comes measuring the factors that are critical to
quality, or CTQs.
The CTQs are:
i. Last mile costs
ii. Redundant deliveries
iii. More independence to users
iv. Number of orders delivered in a day
v. Security and reliability of parcel
vi. Energy consumption
C. Analyse
Actions taken during this phase include: developing
design alternatives, identifying the optimal combination of
requirements to achieve value within constraints, developing
conceptual designs, evaluating then selecting the best
components, then developing the best possible design.
D. Design
The design phase of the DMADV Process consists of the
design of the product or service that fully matches the
customer requirements.
During this phase, the project team has used data from
the previous phases, leading to a product that is suitable for
the customer with all possible additional adjustments that
might be needed. This stage of DMADV includes both a
detailed and high level design for the selected alternative.
The elements of the design are prioritized and from there a
high level design is developed. Once this step is complete, a
more detailed model will be prototyped in order to identify
where errors may occur and to make necessary
modifications.
E. Verify
In the final phase, the team validates that the design is
acceptable to all stakeholders and also tests the effectiveness
of the same in the real world. Several pilot and production
runs will be necessary to ensure that the quality is the
highest possible.
IV. RESULTS AND OUTCOME
The locker provides more independence for customers.
This is mainly because the delivery time and location can be
adjusted to personal convenience. The locker will access 24
hours and 7 days a week. This system integrates consumer’s
action into part of the system’s process. The response time
will reduce than the previous traditional method. This is
because the parcel will be delivered by the delivery
personnel on-time regardless of the availability of the
consumer at the delivery address. Response time plays an
important role in E-Commerce since it greatly affects the
customer experience. Low response time will result in
higher customer satisfaction.
Issue of unsuccessful deliveries is solved.
Unsuccessful deliveries and redundant deliveries of same
items is completely eliminated with this alternate solution.
This is mainly because the parcel will be delivered by the
delivery personnel regardless of the availability of the
consumer at the delivery address. Hence there will be no
possibility of delivery being unsuccessful or getting
returned. The number of orders delivered in a day by a
delivery personnel and hence the logistics company has
shoot up. No time will be wasted in waiting for the customer
to pick the parcel in person. Therefore, the delivery
personnel can place the parcel in the intelligent locker and
leave for the next delivery immediately.
Last mile costs, which make up 53% of the logistics
costs has reduced after the installation of the intelligent
lockers. Due to elimination of unsuccessful and redundant
deliveries and increase in the number of parcel delivered,
the last mile costs has taken a dip. This will ensure increased
profit both for the E-Commerce and logistics company.
As far as the security and reliability of the locker is
concerned, electronic locks are highly reliable and provide
authorized access to owner only with help of OTP shared
via SMS and mail. The provision of One time password
makes the locker highly reliable, even more reliable than the
current traditional method of delivery. For the consumer, the
parcel locker resolves legitimate concerns around missed or
stolen packages. Since there is no third party like the
neighbor involved, a parcel cannot go missing. Intelligent
locker also removes the possibility of the parcel being stolen
by someone making it anti-theft in nature.
V. FUTURE SCOPE
According to customer’s point of view our project has
redesigned the last mile delivery. With the concept in the
product, the ease of accessing the parcel will increase and the
amount of redundant deliveries will be reduced. This project
is expected to provide delivery convenience with self-service
consumer delivery by elimination of redundant deliveries of
same items and reducing ongoing service costs. It is also
expected to increase the number of orders delivered in a day
and secure package access with high reliability electronic
locks. Despite the technology problem, locker system as an
infrastructure needs high investment at the start period,
dividing the cost for different express companies is difficult.
The exclusiveness of the system that none of the locker is
owned by anyone thus increases the market usage for the
same. Installation of more lockers in the prominent locations
decreases the lead time gap and fasten up the distribution
process. The advancement of technology can ease the use
and security of the lockers.
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