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Adoption of Big Data For Last Mile Optimization: The Case of DHL

Logistics companies are adopting big data technologies to optimize last-mile delivery operations. DHL has implemented two big data initiatives: Smart Trucks use real-time data from GPS and traffic conditions to dynamically reroute delivery trucks and reduce miles and fuel usage by 15%. MyWays is a crowdsourcing platform that matches individuals transporting packages on their daily routes with shippers to provide flexible last-mile delivery in rural areas in a cost-effective manner using mobile apps, geocorrelation, and complex event processing. Both examples illustrate how massive real-time data from sensors and mobile devices can improve last-mile delivery efficiency.

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Hailee Hayes
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131 views2 pages

Adoption of Big Data For Last Mile Optimization: The Case of DHL

Logistics companies are adopting big data technologies to optimize last-mile delivery operations. DHL has implemented two big data initiatives: Smart Trucks use real-time data from GPS and traffic conditions to dynamically reroute delivery trucks and reduce miles and fuel usage by 15%. MyWays is a crowdsourcing platform that matches individuals transporting packages on their daily routes with shippers to provide flexible last-mile delivery in rural areas in a cost-effective manner using mobile apps, geocorrelation, and complex event processing. Both examples illustrate how massive real-time data from sensors and mobile devices can improve last-mile delivery efficiency.

Uploaded by

Hailee Hayes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Adoption of Big Data for Last mile optimization: the case of DHL

Logistics 4.0 is becoming an emerging phenomenon, where new digital technologies are used
to fulfil increasing demands of delivering individualized products against high cost pressure
and fast delivery times. One of the solutions brought by Logistics 4.0 is called Big Data. Big
Data refers to the large volume of data that is hard to process; consists of structured, semi-
structured and unstructured data. Big Data is produced in large volume at a very high speed.
The size of the data is not important rather the insights that can be inferred from the data is
useful for the company. There are numerous benefits from using Big Data in logistics with a
focus on optimization of the delivery services and streamlining the everyday delivery
functions, including last-mile delivery.
The last mile of supply chain planning is defined as the movement of finished goods from a
transportation hub to its final destination. Last-mile delivery is the top driver of customer
satisfaction in a supply chain and logistics business. As the most time-consuming, expensive,
and unpredictable element of the entire process, it directly impacts a supply chain's
profitability. This inefficiency and high cost are leaving companies struggling to improve last
mile delivery, and many are turning to Big Data to find the solutions. Big Data technology
provides the possibility of collecting and processing a large quantity of logistics data and
optimize the operation of last mile delivery in a real-time manner. In the case of DHL, Smart
Truck and MyWays are two initiatives of the company to boost the efficiency of its last mile
delivery with Big Data technology.
In 2010, DHL first launched the Smart Truck with the route planning system lying at the
core. The aim of the Smart Truck is to solve the “traveling salesman problem”, which
considered as the core challenge for last-mile delivery. In this evolutionary step, a massive
stream of information is processed to further maximize the performance of a conventional
delivery fleet. This is mainly achieved by real-time optimization of delivery routes. Before
the shipment, the system processes a great deal of data collected from roads and GPS and
comes up with the ideal shipment sequence and route. When the truck is running, the
telematics databases are tapped to automatically adjust the route based on real-time data of
latest order and of the traffic, weather and environment condition. Moreover, Big Data
requires the execution of combinatorial optimization procedures to dynamically re-route
vehicles on the go. In this way, the Smart Truck’s drivers receive instant driving direction
updates , guiding them to the best point of delivery. With the Big Data technology, DHL can
achieve better customer service and a more cost-effective operation because of the optimum
use of vehicles with less wasted miles. By using the Smart Truck, the number of miles was
reduced by 15%. Fuel consumption and CO2 also decreased remarkably.
Apart from the Smart Truck, DHL also launched a crowdsourcing platform for parcel
delivery named MyWay in 2013. The crowd-based delivery has potential to reduce last-mile
delivery cost, especially in rural and sparsely populated areas. In those areas, delivery points
along a particular route could be several miles apart, only one or two packages getting
dropped off at each one would be inefficiency. MyWay matches those who are willing to
transport parcels on their daily routes earn some additional money and shippers who
seek flexible last mile delivery. To automated control the huge number of deliveries, Big
Data techniques such as complex event processing and geocorrelation was adopted. The
whole process is done through a mobile application that enables the crowd affiliates to
publish their current location and get assigned the delivery task.
The above two use cases illustrate approaches to optimizing last-mile delivery, yet they are
diametrically opposed. In both cases, massive real-time information (originating from
sensors, external databases, and mobile devices) is combined to operate delivery resources at
maximum levels of efficiency. And both of these Big Data applications are enabled by the
pervasiveness of mobile technologies
The adoption of big data revolutionizes the logistics service and supply chain management
operations with a positive impact. Hence, companies need to think about this technology and
invest in it to get an improved return on investments and better customer satisfaction. Overall,
implementing Big Data is essential to maximize productivity, make profitable business
strategies and run business operations efficiently.

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