Last mile delivery in the retail sector in an urban context
Creators: name: Motavallian, Joerin
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350903
subject: Logistics

description: Last mile delivery (LMD) is a critical yet ambiguous stage of every supply chain. Previous studies have indicated that LMD is one of the most expensive, inefficient and polluting stages of the supply chain yet, despite its importance, the concept of LMD remains unclear in both academic and industry contexts. The use of different phrases, unclear boundaries and uncertain definitions and structures cause LMD to remain unclear. Thus, this study aims to demystify the basic understanding of LMD in terms of terminology, definition, scope, dimensions and structures. It then aims to introduce an initiative to improve the performance of LMD. A systematic literature review and content analysis are used to clarify the definition, dominant terminology and boundary of LMD, and investigate how the literature addresses these. The study then uses the ontology concept to discover and classify the LMD component, which provides a framework for extracting potential problems, solutions and structures for LMD. The proposed ontology is also used to map the LMD literature and identify the gaps in the literature.<br><br>Using the proposed ontology, LMD is categorised into 40 structures that are employed to discover the structure of LMD used by major retailers and third-party logistics in the city of Melbourne. The results indicate that warehouses and distribution centres are the most common places that the investigated companies used to begin LMD. The results also indicate that the LMD process is usually finalised at stores in the business-to-business (B2B) context, while it is finalised at consignees location in the business-to-consumer (B2C) context. The companies investigated in this study mostly prepared the orders at factories, warehouses or distribution centres in the B2B context and prepared orders at stores in the B2C context.<br><br>Considering these findings, along with coopetition strategy, this study develops an initiative to improve LMD performance. This study proposes a conceptual model for collaboration in the form of coopetition between retailers and logistics providers, and develops mathematical models to evaluate and optimise the initiative. The conceptual model is formed based on sharing 'empty running vehicles' between different delivery networks to decrease the cost and lead-time of delivery simultaneously. A mixed-integer linear programming model solved by genetic algorithm is developed to discover the optimised vehicle-sharing combinations. The results indicate that the proposed model with coopetition decreases delivery cost and lead-time by 60% and 56%, respectively. The results also indicate that the model reduces travelling distance by 66%, which contributes positively to environmental effects. The scenarios with and without coopetition strategy are then compared using real data from the city of Melbourne, which confirms the improvements of the proposed model with coopetition. The results of a case study show that the LMD model with coopetition strategy reduces cost, lead-time and travelling distance by 55%, 46% and 64%, respectively, which is almost similar to the results of random instance sets.<br><br>This thesis makes significant theoretical and practical contributions in relation to LMD and employing coopetition strategy in this area. This thesis provides a conclusion regarding the domain terminology, definition and scope of LMD, and presents classified components and structures of LMD, which help create a common understanding among people working and studying in this field. This study presents an LMD model with coopetition among carriers sharing empty running vehicles, which decreases cost, lead-time, travelling distance and the number of vehicles required. The implementation of the proposed model on a large scale can reduce congestion and improve the sustainability aspects of deliveries in cities.<br><br>The results of this study encourage decision makers in government authorities to identify empty running vehicles in cities and facilitate collaboration among different networks and companies. Moreover, LMD stakeholders such as residents, authorities and end consumers may enjoy the benefits of the proposed coopetition model without being involved in the coopetition practice directly. A shorter time for receiving parcels and lower price of service are the potential benefits experienced by end consumers, while reduced traffic and reduced negative environmental effects are the potential advantages for residents and government authorities. An initiative two-echelon vehicle routing problem (VRP) model is presented to simultaneously minimise lead-time and cost in this study, which has not previously been presented in the LMD context. Moreover, the proposed two-echelon VRP model can be used in other contexts and disciplines.