Business-to-consumer case study

Consultancy for large companies

Business-to-consumer study

This project focused on the delivery of packages to the home, driven by an online portal and supported by a packaging consolidation centre located next to a densely populated urban environment.

Background

The total UK postal services market was valued at £11bn in 2007/2008, including £4bn in courier and express delivery items and £1.5bn in parcels. At present, UK logistics providers report that 30% of small packages dispatched to customer homes fail to be delivered first time, resulting in poor customer service and avoidable logistics inefficiencies. This, in turn, results in larger numbers of delivery runs which exacerbate urban congestion, pollution and accident levels. For the general public, there are significant negative environmental and societal impacts caused by increased numbers of vehicles, which are often unsuitable for urban infrastructure. Failed deliveries significantly reduce the productivity of the logistics provider with lack of integration meaning many courier firms are engaged in multiple drops to the same urban area each day, with no value added to the consumer. Initial results from the pilot suggest a significant improvement on first-time deliveries with successful delivery rates in excess of 99%.

Resulting supply chain configuration

The CIM approach was applied to develop a novel last-mile supply chain configuration. One key element of this is a ‘consumer portal’ as illustrated in the diagram below. This shows an innovative approach that enables the consumer to make informed decisions regarding the mode of last-mile delivery and to take control of timing, cost, reliability and ‘greenness’. The approach also led to detailed mapping of the order/delivery system for a single parcel, and development of a physical consolidation centre that handles the incoming packages from the logistics provider for last-mile provision.

Benefits

The key benefits delivered by the project included improved consumer choice on delivery mode and timing, alongside improved service, reduction in congestion and improved environmental performance.

Consumer portal for selecting optimum last-mile delivery choices