CHAPTER I:

EXECUTIVE SUMMARY
This study deals with one of the biggest tests of agility for the consumer products and
retail industries currently is last-mile delivery and associated services (e.g. returns).
These services are now so pivotal to the customer experience that they are determining
brand choices as never before. Achievements in getting products efficiently to the
warehouse now need to be matched by equivalent improvements in getting goods to
(and from) consumers. It is a challenge that has been seized widely and zealously.
Such is the level of competition among retailers and logistics companies to ‘go one
better’ that consumers have become spoiled by the available options. Next-day home
deliveries, once the pride of Internet sellers, are now expected as a given. To
differentiate anew, leaders have had to up their game with same-day or ‘on-demand’
services - from drone deliveries to advanced ‘click and collect’ options using nearby
convenience stores, intelligent lockers in underground train networks, and even drop-
offs to consumers’ cars. But all of this responsiveness and customer-centricity comes
at a high price. Consumer research suggests that although customers expect their
increasingly demanding needs to be met, they are not prepared to pay more for the
improved level of service. Rather, it is down to the suppliers to earn their business by
keeping up with the market. This presents retailers with an almost impossible
challenge. If they cannot match their competitors and satisfy consumers’ soaring
expectations, they will lose business. But if they try to cover all bases they risk their
profitability.

Taking these many challenges into account, the following study examines the latest
innovation in last-mile services and explores how companies can harness the
opportunities, and keep customers happy, without undermining their businesses - or
promising more than they can deliver.

1
 CHAPTER II:
INTRODUCTION OF THE STUDY

In the world of online shopping customers are used to facilities like next day
delivery. The E-commerce companies have developed their operations to the extent
that long wait for product to deliver are now a thing of past. But before the product
reaches the customer it passes through a chain of transport activities which are
essential for the earliest possible delivery. An important step in these activities is an
activity known as LAST MILE DELIVERY. Last Mile Delivery is the last step in the
product delivery where the product moves from the distribution warehouse to the
customer. Last mile logistics refers to the final step of the delivery process from a
distribution centre or facility to the end user. In other words, the last mile is the last
leg of your product’s trip before it arrives on your customer’s doorstep. This activity is
considered the most significant in the entire delivery process as this directly affects the

customer perception about the delivery process, also this is the most cost intensive
activity in the product delivery process.

Figure 1.1 Last mile Logistics

Most often, last mile logistics involves the use of parcel or small package
carriers to deliver products to consumers. According to McKinsey and Company,
parcel shipment are valued at more than $83 billion, and the growing e-commerce
market will double in value in roughly 10 years in mature markets. The cost of global
parcel delivery, excluding pickup, line-haul, and sorting, amounts to about €70 billion,
with China, Germany, and the United States accounting for more than 40 percent of
the market.

2
Last-mile delivery is much more than navigating city streets, avoiding traffic
congestion and finding the right address. These days, people want convenience and
choice. They want to be able to get their parcels delivered to more locations at a time
that suits them. People want more control over their parcel's journey than ever before.
And they still want to see a friendly face! That’s why the last mile is also known as
'the last smile'. eCommerce logistics market in India is pegged to reach $5.1 billion by
2020. Last mile logistics constitutes 40% of eCommerce logistics and is expected to
grow at a CAGR 48% to reach $2.1 billion by 2020

Objective:

• To study the current problems in Last Mile delivery activities.

• To study the probable solutions as well as future trends in Last Mile Delivery.

Scope:

• This study is limited only to the process of Last Mile Delivery.

• It is more focused on business to customer rather than business to business.

3
 CHAPTER III:

LITERATURE REVIEW

With the rise of e-commerce, consumer preferences have grown increasingly

important in the formerly business-oriented parcel-delivery market. Large e-commerce
players, as well as various start-ups, have identified last-mile services as a key
differentiator. In fact, the variety of delivery options and the perceived quality of the
delivery service are major decision-making criteria for online customers and hence
directly affect e-commerce players’ success in the marketplace. With this in mind,
vendors are working hard to offer the best customer experience possible, especially by
improving delivery times. Nearly 25 percent of consumers are willing to pay
significant premiums for the privilege of same-day or instant delivery. This share is
likely to increase, given that younger consumers are more inclined (just over 30
percent) to choose same-day and instant delivery over regular delivery. But despite the
large share of consumers willing to pay extra for same-day delivery, only 2 percent
said they would pay sufficiently more to make instant delivery viable (assuming the
consumer would have to bear the additional cost of this extremely fast service). In any
event, same-day and instant delivery will likely reach a combined share of 20 to 25
percent of the market by 2025, and they are likely to grow significantly further,
especially if the service is extended to cover rural areas to some extent. [1]

Last-mile delivery is generally arranged by one of three parties: a seller, an

intermediary, or a buyer. Today, these parties can use traditional means of delivery or
new algorithm- and analytics-driven applications (i.e., apps). Tomorrow, drones,
robots, and driverless cars may become formidable new choices in various geographic
settings and markets. New advanced algorithm- and analytics-based services catering
to various customer needs will likely continue to emerge given low barriers to entry.
Since the profitability of some of these models may be questionable, innovative firms
that can reduce the cost structure through novel models may gain the ultimate
advantage. Given that delivery services based on drones or driverless vehicles require
heavy upfront investment, it is likely that large sellers or delivery providers will
emerge as first movers in this space. In the near term, the U.S. Postal Service (USPS)
has an opportunity to leverage advanced algorithms such as dynamic routing to

4
improve the efficiency of existing business models and develop new models USPS
may also consider drones.

5
 Given that robots are likely to have niche applications in smaller communities
in the early stages of deployment, they may not present a large opportunity for the
U.S. Postal Service in the near term. As the cost of driverless vehicles becomes more
competitive with traditional vehicles over time, the USPS may have an opportunity to
consider incorporating driverless vehicles within its fleet, with the potential of saving
labor and other costs. [2]

One of the biggest problems with the organization of the supply of goods to
customers in ecommerce is that there is a significant fragmentation of the orders.
Individual customers usually buy small amounts of products, while expecting fast
delivery. This forces the competitive market of transport services to respond
dynamically to the emerging demand for transport. Often, in order to satisfy the
customer, commercial vehicles provide their services regardless of the degree of use
of their loading space. On the other hand, at this point it is worth to highlight the
problem of inadequate fleet of transport companies, which is not adapted to the needs
of ecommerce, particularly in the context of the size of the vehicle in relation to the
volume of deliveries. Additionally very often local authorities implement not enough
efficient measures to reduce negative impact of urban freight transport. [3]

Delivery services to the end consumer related to online shopping have resulted
in the increasing fragmentation of shipments in the “last mile” (as the final segment of
the supply chain is known) From a city logistics point of view, home deliveries
constitute the most problematic solution in terms of service costs and organization,
however this option is usually preferred by online shoppers, who seek express,
arranged and reliable services.

6
 CHAPTER IV:
RESEARCH METHODOLOGY

Research methodology is a systematic way to solve a problem. It is a science

of studying how research is to be carried out. Essentially, the procedures by which
researchers go about their work of describing, explaining and predicting phenomena
are called research methodology. It is also defined as the study of methods by which
knowledge is gained. Its aim is to give the work plan of research. It is necessary for a
researcher to design a methodology for the problem chosen. One should note that even
if the method considered in two problems are same the methodology may be different.
It is important for the researcher to know not only the research methods necessary for
the research under taken but also the methodology. For example, a researcher not only
needs to know how to calculate mean, variance and distribution function for a set of
data, how to find a solution of a physical system described by mathematical model,
how to determine the roots of algebraic equations and how to apply a particular
method
but also need to know
• Which is a suitable method for the chosen problem?
• What is the order of accuracy of the result of a method?
• What is the efficiency of the method?
Consideration of these aspects constitute a research methodology.

Research Design

A. Basic Research
Basic research is an investigation on basic principles and reasons for
occurrence of a particular event or process or phenomenon. It is also called theoretical
research. Study or investigation of some natural phenomenon or relating to pure
science are termed as basic research. Basic researches sometimes may not lead to
immediate use or application. It is not concerned with solving any practical problems
of immediate interest. But it is original or basic in character. It provides a systematic
and deep insight into a problem and facilitates extraction of scientific and logical
explanation and conclusion on it. It helps build new frontiers of knowledge. The

7
outcomes of basic research form the basis for many applied research. Researchers
working on applied research have to make use of the outcomes of basic research and
explore the utility of them. Research on improving a theory or a method is also
referred as fundamental research.
For example, suppose a theory is applicable to a system provided the system
satisfies certain specific conditions. Modifying the theory to apply it to a general
situation is a basic research. Attempts to find answers to the following questions
actually form basic research.
• Why are materials like that?
• What are they?
• How does a crystal melt?
• Why is sound produced when water is heated?
• Why do we feel difficult when walking on seashore?
• Why are birds arrange them in ‘>’ shape when flying in a group?
Fundamental research leads to a new theory or a new property of matter or
even the existence of a new matter, the knowledge of which has not been known or
reported earlier. For example, fundamental research on
• Astronomy may lead to identification of new planets or stars in our galaxy.
• Elementary particles results in identification of new particles.
• Complex functions may lead to new patterns or new properties associated with them.
• Differential equations results in new types of solutions or new properties of solutions
not known so far.
• Chemical reactions leads to development of new compounds, new properties of
chemicals, and mechanism of chemicals reactions etc.
• Medicinal chemistry leads to an understanding of physiological action of various
chemicals and drugs.
• Structure, contents and functioning of various parts of human body helps us identify
the basis for certain diseases.

8
B. Applied Research
In an applied research one solves certain problems employing well known and
accepted theories and principles. It is designed to solve practical problem of the
modern world, rather than to acquire knowledge for knowledge's sake and it uses
scientific knowledge to solve practical problems Most of the experimental researches,
case studies and inter-disciplinary researches are essentially applied research. Applied
research is helpful for basic research. A research, the outcome of which has immediate
application is also termed as applied research. Such a research is of practical use to
current activity. For example, research on social problems have immediate use.
Applied research is concerned with actual life research such as research on increasing
efficiency of a machine, increasing gain factor of production of a material, pollution
control, preparing vaccination for a disease, etc. Obviously, they have immediate
potential applications.
Thus, the central aim of applied research is to find a solution for a practical
problem which warrants solution for immediate use, whereas basic research is directed
towards finding information that has broad base of applications and thus add new
information to the already existing scientific knowledge.

C. Normal and Revolutionary Researches

Basic and applied researches are generally of two kinds: normal research and
revolutionary research. In any particular field, normal research is performed in
accordance with a set of rules, concepts and procedures called a paradigm, which is
well accepted by the scientists working in that field. Normal research is something
like puzzle-solving: interesting, even beautiful, solutions are found but the rules are
remains same. In this normal research sometimes unexpected novel results and
discoveries are realized which are inconsistent with the existing paradigm. Among the
scientist, a tense situation then ensures, which increases in intensity until a scientific
revolution is reached. This is marked by a paradigm shift and a new paradigm emerges
under which normal scientific activity can be resumed.

9
D. Quantitative and Qualitative Methods
The basic and applied researches can be quantitative or qualitative or even
both. Quantitative research is based on the measurement of quantity or amount. Here a
process is expressed or described in terms of one or more quantities. The result of this
research is essentially a number or a set of numbers. Some of the characteristics of
quantitative research method are:
• It is numerical, non-descriptive, applies statistics or mathematics and uses numbers.
• It is an iterative process whereby evidence is evaluated.
• The results are often presented in tables and graphs.
• It is conclusive.
• It investigates the what, where and when of decision making.
Statistics is the most widely used branch of mathematics in quantitative
research. It finds applications not only in physical sciences but also in economics,
social sciences and biology. Quantitative research using statistical methods often
begins with the collection of data based on a theory or hypothesis or experiment
followed by the application of descriptive or inferential statistical methods.
Qualitative research is concerned with qualitative phenomenon involving
quality. Some of the characteristics of qualitative research method are:
• It is non-numerical, descriptive, applies reasoning and uses words.
• Its aim is to get the meaning, feeling and describe the situation.
• Qualitative data cannot be graphed.
• It is exploratory.
• It investigates the why and how of decision making.
We measure and weigh things in the study of substance or structure. Can we
measure or weigh patterns? We cannot measure or weigh patterns. But to study
patterns we must map a configuration of relationships. That is, structures involve
quantities whereas patterns involve qualities. If one wishes to investigate why certain
data are random then it is a qualitative research. If the aim is to study how random the
data is, what is the mean variance and distribution function then it becomes
quantitative. Explaining how digestion of food takes place in our body is a qualitative
description. It does not involve any numbers or data and quantities. The detection of a
particular compound is a qualitative analysis. This can be done by carrying out
physical or chemical tests. Determination of exact amount of a particular compound
present in a volume is essentially quantitative analysis. This can be done by
10
volumetric, gravimetric and colorimetric methods or instrumental methods.
Experimental and simulation studies are generally quantitative research. In fact,
qualitative methods can be used to understand the meaning of the numbers obtained
by quantitative methods.

Data Collection
The main objective of this project was to study and improve supply chain of a
project based industrial automation company. The data collection method adopted for
this research study is secondary in nature.

Secondary Data:
Secondary data is information that is already available somewhere, whether it
be in journals, on the internet, in a company's records or on a larger scale, in corporate
or governmental archives. Secondary data allows for comparison of, say, several
years’ worth of statistical information relating to, for example, a sector of the
economy, where the information may be used to measure the effects of change or
whatever it is that is being researched. The secondary sources of data include
information which were already recorded on the subject of the study. They are being
used for some purposes other than that of which they were originally collected.
Sources of secondary data are:
• Internet
• Office Statistics
• Research Papers

11
 CHAPTER V:

CHALLENGES IN LAST MILE DELIVERY

1. Fragmented delivery:
In case of first mile delivery many products are shipped together to a central
warehouse and then are distributed further but in case of Last Mile Delivery
the orders are lesser in quantity and delivery locations are far away from each
other, this increases the cost of transportation and also the time for delivery.

2. Cost of transportation:
Many direct as well as indirect costs are included in the last mile delivery. On
the surface, last mile may not seem very important, but it can make up 28
percent of a shipments total cost. Cost is not a new issue, obviously, but new
expectations, particularly regarding same-day/on-demand delivery has put a
greater strain on budgets. Additionally, when it comes to online retail, there
can be inconsistent demand, such as increasingly higher volumes of purchases
during holidays. Amazon had a real problem with this issue – their largest cost
was fulfilment and their biggest challenge was last-mile delivery. For Amazon,
owning the entire supply chain turned out to be the solution to handling the
challenges of last-mile delivery. For other businesses though, this may not be
the best option. There is no silver bullet for offsetting costs. However,
efficiency and planning go a long way to neutralize its affect. For bigger
eCommerce companies such as Amazon, creating efficiencies throughout the
supply chain enable lower costs during the last-mile.

12
3. Unavailability of customers:

This can be called as the most difficult challenge. Due to newer options like
same day delivery or next day delivery the customers expect their deliveries to
be completed in minimum time. But most of the time while delivery of the
product the customers are not present in their homes due to which the delivery
attempt is wasted all the direct as well as indirect costs are lost. For eg
consider a case where a customer has ordered a single product of value 100rs
but at the time of delivery the customer is not present the parcel has to be
returned to the distribution center and another delivery attempt has to be done.
Thus the entire resources used in that delivery attempt are lost. The fuel cost,
the labor cost of delivering the parcel are altogether lost.

Figure 4.1 Rate of missed delivery

13
4. Vehicle routing problems:
A delivery vehicle has to fulfil many orders in one day therefore it has to travel
many locations, one of the problem is to determine the optimized route to
reduce the fuel cost. The objective of most routing and scheduling problems is to
minimize the total cost of providing the service. This includes vehicle capital costs,
mileage, and personnel costs. But other objectives also may come into play,
particularly in the public sector.

Figure 4.2 Vehicle routing

14
 CHAPTER VI

RECENT TRENDS FOR SOLVING THE PROBLEMS

1. Advanced Algorithms and Analytics:

Several software innovations have been improving last-mile delivery over the past
few years and have opened the door for established delivery companies as well as new
entrants to offer new or improved services that better address customer expectations. In
particular, the main innovations that allow delivery companies to offer customized delivery
(e.g., on-demand or same-day) include task-courier matching and dynamic routing algorithms.

Figure 5.1 Advanced analytics

The algorithms and analytics are being applied by traditional firms as well as new
entrants. New entrants can access the last-mile delivery market quickly using these tools, often
with relatively low upfront investment and low operating costs. This is especially true for
companies that rely on crowdsourcing or subcontracted drivers, thus avoiding the need to
operate their own fleet of delivery vehicles and to employ full-time drivers.

Advanced algorithms and analytics also make it easier for new entrants to offer on-
demand or same-day delivery service, as well as the option to shop for goods on behalf of
customers. For example, product search-and-match tools help providers improve efficiency,
while task-courier matching and routing optimization make it easier to provide on-demand or
same-day delivery service. Optimization algorithms may also make it easier for merchants to
select the best shipping method for each order based on multiple criteria (e.g., cost, speed) to

15
better meet customer expectations. This may make it more challenging for traditional delivery
companies to win merchants’ business. While algorithms and analytics enable new entrants,
they also present opportunities for traditional delivery companies to enhance their service
offerings. For example, they can use more sophisticated routing algorithms to better meet
customer requests for specific delivery times, to inform customers of the expected delivery
time, to schedule a specific pickup time from a merchant, or to make the best use of the
deliverer’s available capacity. Alert systems can be used to notify customers of their order
status, expected arrival time, and delivery time. Other innovations can also make it easier for
deliverers to offer customers special services, such as change of delivery location or time, or
the ability to submit specific delivery instructions.

2. Drone delivery:

Figure 5.2 Drone Delivery

A drone, in a technological context, is an unmanned aircraft. Drones are more

formally known as unmanned aerial vehicles (UAVs) or unmanned aircraft systems
(UASes). Essentially, a drone is a flying robot. The aircrafts may be remotely
controlled or can fly autonomously through software-controlled flight plans in their
embedded systems working in conjunction with on-board sensors and GPS. A new

16
study published Tuesday in Nature Communications led by researchers at Lawrence
Livermore National Laboratory and Carnegie Mellon University finds that using
relatively small quad- or octo-copters (in comparison to far larger drones used for
military applications, for example) instead of diesel-burning delivery trucks could
mean a reduction in both energy consumption and release of greenhouse gases that
contribute to climate change. In new research published in Nature Communications,
they found that within the 4km (2.5 mile) range of current battery-driven delivery
drones, the airborne devices consumed less energy per package and per kilometre than
trucks for light deliveries of 0.5kg (1.1lb). Amazon can already deliver items to some
customers just hours after they’ve been ordered. But the online retailer says that time
window will shrink down to just 30 minutes if it can deliver packages via drones
through its Amazon Prime Air service. Once the technological limitations are
resolved, regulatory restrictions are relaxed, and public concerns around safety and
privacy are addressed and minimized, drones could have a significant impact on the
landscape of last-mile delivery Traditional delivery companies, new entrants to the
market, as well as merchants themselves could use drones to offer same-day delivery
services, thus satisfying customers’ desire for speedy delivery in an environmentally
friendly way. Similarly, intermediary companies could save costs by having their
workforce focus on shopping for customers while using drones for the actual delivery,
at least for those orders within the drone’s capacity limitations. If the cost to own and
operate a highly functional drone becomes sufficiently low so that individual people
could own drones for personal product transport, customers could potentially send
their drone to the store to fetch their orders. Even though the use of drones will be
limited to a certain delivery distance and package size, the market potential is high; for
example, it is estimated that around 20 percent of Amazon’s e-commerce orders meet
these criteria.41 Furthermore, retailer Walmart has locations within 5 miles of 70
percent of the U.S. population, creating real opportunities for drone delivery.42
Drones can also provide a convenient solution for delivering urgently needed items to
remote or hard-to-reach locations. Drones already have been used to deliver small aid
packages after the Haitian earthquake in 2012, and Doctors Without Borders used
them to transport dummy TB test samples from a remote village to the large coastal
city of Kerema in Papua New Guinea.

17
 Delivering packages with drones can reduce carbon dioxide emissions in certain
circumstances as compared to truck deliveries. But the carbon benefits erode as the
weight of a package increases, since these unmanned aerial vehicles have to use
additional energy to stay aloft with a heavy loadWhile public debate has largely
focused on cost reduction, privacy implications and airspace congestion, few people
have analysed the environmental consequences that drone technology may have if
fully adopted by industries, the researchers found. The new analysis compared carbon
dioxide emissions and vehicle miles travelled from drone and truck deliveries in 10
different, real-world scenarios in Los Angeles. The model incorporated 330 different
service zones, with the number of recipients varying from 50 to 500 in each zone. The
researchers estimated how much energy generation the drone deliveries would require,
based on consumption for 10 different hypothetical products. Carbon dioxide
emissions were calculated using an average fuel mix for the state of California. The
researchers found that delivering light packages with drones may help reduce carbon
emissions when compared to truck delivery.

18
 3. Crowdsourcing:

Figure 5.3 Crowdsouring

Crowdsourcing is the practice of engaging a ‘crowd’ or group for a common

goal — often innovation, problem solving, or efficiency Simply defined,
crowdsourcing represents the act of a company or institution taking a function once
performed by employees and outsourcing it to an undefined (and generally large)
network of people in the form of an open call. This can take the form of peer-
production (when the job is performed collaboratively), but is also often undertaken
by sole individuals. The crucial prerequisite is the use of the open call format and the
large network of potential laborers

While crowdsourcing is not a completely new phenomenon, few carriers other

than Amazon have so far harnessed the model to final mile delivery. A common
conventional wisdom is that crowdsourcing works well in ride-sharing or point-to-
point deliveries (as with restaurant delivery apps UberEats and Deliveroo), but that the
model is unfit for large volume distribution. We, however, hold a different view.
Based on Amazon’s success with the model as well as our own experience, we believe

19
that crowdsourcing presents one of the largest opportunities for package delivery
companies today. When properly understood and leveraged, crowdsourcing can yield
major operational benefits, help provide exceptional customer experience, and enable
delivery companies to better capitalize on the growing demand for final mile delivery.

4. Locker facility:

Figure 5.4 Locker Facility

Many ecommerce companies are coming up with locker services for the benefit of
the customers who are not available at the time of delivery. One such company is
Amazon which provides the service called Amazon Locker. Amazon Locker is a self-
service parcel delivery service offered by online retailer Amazon. Amazon customers
can select any Locker location as their delivery address, and retrieve their orders at
that location by entering a unique pick-up code on the Locker touch screen. Amazon
Locker program was launched in September 2011 in New York City, Seattle, and
London. As of December 2017, Lockers were available in over 2,000 locations in 50+
cities. A customer orders a parcel from Amazon and has it delivered to a Locker
location. Amazon's preferred carriers deliver the packages locker, and the customer
receives a digital pick-up code via email or text messaging. Once the unique pick-up
code is entered into the locker's touch screen, the assigned door opens for package
retrieval. Amazon customers have three days to collect their packages once they
receive their pick-up code. Amazon customers can also return packages to select
Amazon Lockers. Amazon Lockers can sometimes be full and therefore not available

20
when a delivery is attempted. In that case customers will have to wait an unspecified
amount of time until space is available.

21
 CHAPTER VII:
CASE STUDIES

1. UPS No left turn policy:

UPS trucks almost never take left-hand turns. By favouring right-hand turns at
all times -- unless a left is unavoidable -- the carrier saves millions of gallons of fuel
each year, and avoids emissions equivalent to over 20,000 passenger cars. The
practice started decades ago, before computers and GPS, and is now managed by a
software that conjures the most efficient route for each truck.

What's wrong with turning left?

Left-hand turns are generally considered unsafe and wasteful on right-hand

driving roads, such as those in the US. “Left-turning traffic typically has to turn
against a flow of oncoming vehicles," explains Tom Vanderbilt, author of the book
"Traffic: Why we drive the way we do. “This can not only be dangerous, but makes
traffic build up, unless you install a dedicated left-turn 'phase,' which is fine but
basically adds 30 or 45 seconds to everyone else's single time," he said. A study on
crash factors in intersection-related accidents from the US National Highway Traffic
Safety Association shows that turning left is one of the leading "critical pre-crash
events" (an event that made a collision inevitable), occurring in 22.2 percent of
crashes, as opposed to 1.2 percent for right turns. About 61 percent of crashes that
occur while turning or crossing an intersection involve left turns, as opposed to just
3.1 percent involving right turns. Left turns are also three times more likely to kill
pedestrians than right ones, according to data collected by New York City's
transportation planners.

The right way to save fuel

"A left-hand turn is also less fuel efficient," said Jack Levis, UPS Senior
Director of Process Management, "because your car's idling longer, which is also not
good for your vehicle."UPS does not ban left turns outright, says Levis: "We will
make left hand turns, but not ones that are unnecessary. We don't need to go in circles
all day long by making only right hand turns. We have tools analyze the number of

22
left hand turns for each route, and we can work out which ones are avoidable."The
procedure is now incorporated in most countries around the world.To this end, the
carrier created its own maps, which it says are more accurate that commercially
available ones: "We can differentiate more important left-hand turns from unimportant
ones. Google Maps has no concept of not making a left-hand turn, it just shows the
most direct way to reach your destination. We have the ability to penalize some of
those," Levis told CNN.The system knows about parking lots, private driveways,
variable speed limits and roads that are inaccessible for a truck.The software can give
an undesirable left turn a penalty that adds 20 seconds to the estimated route time. In
that case, going around the block and turning always right might offset that 20-second
penalty: "We were able to turn off left hand turns," said Levis.Taking a longer route
while still saving time and fuel might sound confusing, even to UPS drivers, according
to Vanderbilt: "I've actually been to UPS's logistics center and discussed this with
their lead engineers," he said. "A lot of individual drivers felt the new routing software
was making their trips longer, but they were later proven wrong. This is the thing
about traffic, it's such a complex system that often the individual cannot get a sense of
the overall efficiency of the system, and optimize accordingly. It's also one of the
counterintuitive, 'slower-is-faster' effects you often see in traffic."The rule, says Levis,
can also be applied to left-hand driving countries, such as Australia and the UK, where
it discourages right-hand turns. UPS started avoiding left turns in the 1970s, when it
came up with a method called "loop dispatch," plotting deliveries in a right-turning
loop and starting with one side of the street first. In 2008, it launched a routing
software to calculate the best possible route for each truck while favoring right-hand
turns, called Orion: "It took 10 years to get it right. The hardest part was making it
think more like a driver and less like a computer," said Levis. UPS, which makes 18
million deliveries a day in the US, says that Orion analyzes 250 million address points
a day and performs 30,000 route optimizations per minute. This saves the company
$300 to $400 million annually in fuel, wages and vehicle running costs: "Our basic
routines were already good, and allowed us to save about 85 million miles a year.
When we put Orion on top of those, it shaved off an extra 100 million miles, and the
savings got up to 185 million miles a year."

23
 2. Route Planning Software by Descartes

Customer Success story by BOSCH

Robert Bosch Inc. Canada houses more than 55,000 Stock Keeping Units
(SKUs) in its 152,000 square foot Mississauga, Ontario warehouse facility, each
business day shipping 600-700 orders to destinations coast-tocoast that range from
light-weight parcel shipments to full-load tractor-trailer or rail car. Similar to the size
of its orders, shipment contents leaving the Bosch warehouse vary widely and include
automotive aftermarket parts, power tools and accessories, and security systems. The
customer profile is similarly diverse, according to Distribution Manager Chris Dyer.
“We ship to everyone from the corner garage to major automotive retailers, local
hardware stores to national retail home improvement centers,” he says. “For example,
a warranty shop might need just a couple of screws, but if they need them, their orders
merit the same level of attention as does a truckload of table saws going to a national
retailer.” The Challenge Robert Bosch Inc. is the Canadian arm of the North American
Division of the Robert Bosch Corporation, a Stuttgart, Germany-headquartered
international company that employs approximately 250,000 people in more than 50
countries. To deal with its complex distribution matrix of products, carriers and
customer preferences, Robert Bosch Inc. has a sophisticated IT structure. A SAP
system houses data for Bosch, Skil & Dremel power tools, and an IBM AS/400
system services Bosch Automotive and Bosch Security product lines.

The Problem

Orders download to the warehouse management system (WMS) for

fulfillment; parcel-size orders were picked and packed and then rated and routed using
a commercial shipping machine. Large orders – the truckloads, less than truckloads
(LTL s) and rail car loads – were manually rated and routed, with paperwork being
manually generated. “Over time these procedures became unsatisfactory on several
levels,” Dyer says. “Software support was unpredictable since it usually came out of
the U.S., which could mean slow response times. Information was not readily
available to our customer service teams. And, too often, we found ourselves limited to
a single carrier for LTL shipments because we did not have an expedient way to
source the carrier with the most economical solution, which would also satisfy our
customers’ specific requirements. It was apparent that we needed a flexible shipping

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solution that would accommodate all types of shipments within a single system.” The
Discovery Finding it wasn’t so easy, Dyer says. He researched the available options
and “While some systems may have satisfied some of Bosch’s operational
requirements, Descartes’ Transportation Management(TM) solution, specifically the
Pick, Pack and Ship module, had the best return on investment (ROI). Based on the
vendor selection and review process, Descartes gave us the highest confidence level in
meeting the implementation target, as well as providing ongoing timely support.”
Additionally, Descartes’ TM could be acquired economically on an operating rental
model, and it met with all of Bosch’s requirements in terms of implementation,
flexibility and functionality.

The Solution

The Descartes TM solution is a multi-carrier-compliant enterprise logistics

software solution that provides efficient planning and execution of shipping and
warehouse activities at touch-points in the distribution process. Descartes’ TM helps
support rules-driven automated routing of Truckload (TL ), LTL , small package
carrier, multi-modal, fleet and messenger services. Once the Descartes system had
been selected, Dyer worked with Descartes personnel to define the transition program,
which involved several stages. First, they established and documented the scope of the
project, including a review of the entire logistics processes. They identified the steps
that represented the optimum flow of information from the SAP – AS /400
management software, where orders and inventory information were maintained, to
the warehouse system, which executed the receiving, inventory management and
fulfillment process, and finally to the newly acquired Descartes shipping solution. In
this manner, the implementation team was able to determine what information was
required by Descartes as well as the types of data that was needed back from
Descartes. The Implementation The Descartes software was installed on a network
server and interfaced with the warehouse management system. “This provided us with
a high speed exchange of data between the two systems, virtually real-time,” Dyer
says. “Orders drop from the databases into the WMS and, once they are picked and
packed, the data drops automatically into the Descartes software for rating and routing
according to the customer’s delivery requirements and cost. Descartes performs these
tasks automatically, verifying customer order numbers, shipment weights, shipping
details, and choosing the most economical routing, also providing alternatives if the

25
options programmed into Descartes are not compatible with customer requirements.”
Once the shipments are rated and routed, Descartes generates the shipping labels and
carrier bills of lading. All carrier loads are manifested daily. Its electronic data
interchange (EDI) module enables it to send advance shipping documentation to EDI-
enabled carriers, and retrieve delivery information back on previous shipments that
have been delivered by the carrier. The Results The efficiencies achieved using
Descartes are readily apparent, Dyer says. “Descartes can handle all of our shipping
needs, from the very smallest package to the largest full loads,” he says. “We haven’t
quantified savings at this point, but it is easy to see that they are significant. We’re
through with handwritten documents: Descartes prepares printed, error-free copies
automatically and quickly and this alone represents a major savings of personnel
time.”

3. Amazon Prime Air:

Amazon Prime Air is a conceptual drone-based delivery system currently in

development by Amazon. The company first announced its project — appropriately
dubbed Prime Air — in late-2013, to much skepticism. Since then, the project has
overcome numerous hurdles, and while it’s not quite ready for primetime quite yet,
every month it inches closer toward launch. Getting Amazon drones off the ground
(both literally and figuratively) will take a lot of work, in addition to persuading the
FAA to agree to let drones in the air in the first place. One big hurdle is the issue of
getting the packages to you. Although Amazon has established a commendable
network of fulfillment centers throughout the country, there are only locations in 24
states, most of which are coastal.

To remedy this — and this is pretty out there — Amazon recently patented what it
calls an “airborne fulfillment center.” This basically amounts to a warehouse that
doubles as a drone airport, one that would hang suspended from a blimp. Another
issue Amazon has to deal with is where to put these drones when they’re not in use.
For this one, the company has suggested using street lights, cell towers, and other
high-lofted objects as potential “docking stations.” And how about getting the package
to you? Does the drone land on your front porch? Maybe not — it might deliver the
package via parachute. But in every case, these ideas are not yet realistic and show
that it’s likely that it will be many more years before Prime Air takes off (no pun

26
intended). As for a timeline, it looks like we will have to wait until as late as 2020, if
not later, for large-scale availability.

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 CHAPTER VIII:

CONCLUSION
Amazon being one of the leading products site has enormous growth potential in
itself. The ever increasing population and awareness of technology in people has
triggered growing need for the products in various ways.

This has indeed led to boom in overall supply chain of various industries. This
growing need has also a parallel platform of growing competitiveness amongst various
players in this sectors. Thus, Everyone is striving hard to perform at their best and
satisfy customers in various ways.

This concept of “LAST MILE DELIVERY” has got into the chain of customer
satisfaction but it has various problems such as fragmented delivery, transportation
cost and unavailability of customers etc. Abiding to this the company is framing
various solutions viz advance algorithm, Drone delivery, Crowdsourcing, Locker
facilities etc. These are some solution which are pacing hard to tackle the problems in
best possible ways. Thus, leading the company towards a bright future in upcoming
time.

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 CHAPTER IX:

BIBLIOGRAPHY

[1] M. J. F. N. a. J. Schröder, "How customer demands are," p. 4, 2016.

[2] Y. Chen, "TECHNOLOGICAL DISRUPTION AND INNOVATION IN LAST-MILE

DELIVERY," 2016.

[3] K. K. J. L. Stanisław Iwan, "Analysis of parcel lockers’ efficiency as the last mile
delivery," 2015.

[4] "Mckinsey.com," Mckinsey, [Online]. Available:

https://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/how-
customer-demands-are-reshaping-last-mile-delivery. [Accessed 15 February 2018].

[5] "supplychaindive," [Online]. Available: https://www.supplychaindive.com/news/last-mile-

spotlight-inefficient-perfect-delivery/443089/. [Accessed 15 FEbruary 2018].

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