Tackling the challenge of last-mile delivery

There's no doubt about it, e-commerce has not only changed the way consumers shop but also upended the way many companies store and deliver their goods. In the newest issue of the Council of Supply Chain Management Professionals' (CSCMP) Hot Topics publication, Sean Monahan and Michael Hu of the consulting company A.T. Kearney address how e-commerce is pushing companies to locate inventory closer to demand and focus more on last-mile delivery.

In the report, titled "U.S. E-Commerce Trends and the Impact on Logistics," Monahan and Hu look at how the demand for next-day or same-day service may drive many retailers to explore new delivery models. One option, the paper suggests, is to work with regional short-haul providers such OnTrac, LaserShip, and XPO Logistics. These companies focus on lane-specific or last-mile deliveries in a particular region, such as the northeastern United States or U.S. West Coast. Another option is to use new crowdsourcing platforms such as Deliv and Uber, which match, in real time, available couriers with orders that need to be delivered from a nearby distribution center or store.

The authors also expect that new digital technologies and automation will help companies solve the challenges of e-commerce logistics. For example, there are now machine-learning algorithms that can be used to better forecast demand for "long-tail stock-keeping units" (goods with low demand levels). These improved forecasts will help retailers make more informed decisions about how much inventory to deploy in regional distribution centers and stores. The authors also expect to see more companies experimenting with self-driving delivery robots that can carry orders as heavy as 40 pounds up to three miles.

The March 2017 Hot Topics report is free for CSCMP members and costs US $20 for nonmembers. CSCMP regularly publishes Hot Topics throughout the year. Each two- to four-page issue is written by a leading expert or researcher in the field. The publications typically focus on new research, hot trends and emerging industry insights, and/or a new perspective or finding on a critical issue.