Logistical consequences of rapid deliveries in omnichannel retailing : Investigating the impact of 15-minute deliveries on the demand management and order fulfilment process

Sammanfattning: The need for fast, flexible, and sustainable deliveries has become a key priority for companies as customers demand more convenience in their purchasing experience. Retailers have responded by developing their logistics into an omnichannel to meet these expectations, which has made the supply chain more complex. The following study has been conducted at The Company, a telecommunication company aiming to be competitive in the market with fast deliveries through its omnichannel. In 2015, The Company set the logistics vision of “Availability as The Competitive Advantage”, aiming for 15-minute deliveries of all physical products in Sweden. This study involved investigating the logistical consequences of realising 15-minute deliveries in an omnichannel company. Therefore, the purpose of this study was formulated: “The purpose is to investigate the logistical consequences for The Company if the logistics vision of 15-minute deliveries is realised.” Since The Company cannot provide 15-minute deliveries today, local inventory points must be added to the underlying warehouse structure, acting simultaneously as storage points and parcel boxes. Firstly, the study involved creating scenarios for The Company where the customer can reach any local inventory point within 15 minutes by bicycle. Four scenarios were designed realising 15-minute deliveries in Sweden, Östergötland County, Jönköping County, and Stockholm respectively. For all four scenarios the number of local inventory points, central- and satellite warehouses, stores, replenishment- and distribution flows were decided by semi-structured interviews with The Company. Furthermore, investigating the logistical consequences involved two supply chain business processes connected to demand and supply: the demand management- and order fulfilment process. The included activities in the demand management process were Plan Forecast, Collect Data, Forecast, Synchronization and Communication of Forecast, Measure Performance. In the order fulfilment process, activities included were Defining Requirements, Evaluation of Logistics Network, Order Fulfilment Plan, Process Order, Pick and Pack Order, and Transport and Delivery. 12 respondents from The Company were interviewed to analyse the current activities and the required activities in the four scenarios. The logistical consequences to bridge the gaps were found and investigated. In the two processes investigated, 14 logistical consequences were found, seven in the demand management process and seven in the order fulfilment process. The study’s result indicates that rapid deliveries imply the same logistical consequences regardless of geographical area and the number of local inventory points for The Company. Covering Sweden implies bigger gaps and consequences than solely covering a big city. Many of the logistical consequences address similar gaps and logistical consequences resulting in the two processes interfacing. Consequently, the logistical consequences were divided into three main categories: system, strategic, and operational. Despite the difference between the four scenarios, many of the respondents have expressed the challenging future ahead by offering 15-minute deliveries. To fulfil the logistics vision The Company must focus on the logistical consequences identified in this study. It will require major significant changes in The Company’s logistics system adding stores. However, the focus of the study lied in understanding the requirements of the demand management and order fulfilment processes within the designed scenarios. Moreover, The Company is recommended to prioritize these consequences and then actively address them.