Supermarket home delivery made 10% more efficient

05/10/2017

Team der AAU macht Versandhandel effizienter (c)Waschnig
A team of mathematicians from the Alpen-Adria-Universität Klagenfurt have increased the efficiency of delivery routes for a global retail brand in England by 10%. This represents a cost reduction of several million euros each year for the company.

Supermarket delivery services are living in the fast lane since it seems practical for the end customer to have their everyday purchases delivered to their home within a specific time window. The retail chains invest significant logistical efforts in their online trade and there is a great deal both to lose and win.

“The aim of the project which we carried out for one of the world’s largest retail chains was to identify a stable, fast and transparent optimisation approach so as to calculate delivery routes for the many orders, delivery vehicles and depots in real time,” Philipp Hungerländer explains. The project was carried out together with the British company Satalia. A team of six researchers worked on it at the Institute of Mathematics in Klagenfurt.

In the viewed application, new orders are activated online and customers are able to select their preferred delivery time window. The optimisation tool developed quickly calculates how any additional orders impact on the optimal route and devises adapted delivery plans. Finally, both customers and delivery staff should be satisfied because “Good drivers are in demand. Our results show that the optimal delivery plan has a positive impact on satisfaction”.

When calculating the routes and time windows, there is a wide range of factors to take into account which impact on the efficiency of deliveries, for example the time taken for the handover of the shopping to the customer or the number of floors which need to be tackled without a lift. Travel times are dependent on parameters such as week days, time of day, weather and much more. Overall the team achieved a 10% increase in the efficiency of the delivery routes of this international retail chain in England, thereby decreasing annual costs by several million euros with a corresponding reduction in CO2 emissions. The system is currently being rolled out from London across England and will then be implemented globally.

05/10/2017

Team der AAU macht Versandhandel effizienter (c)Waschnig