Distribution Center Operations Research Articles

Real-Time Delivery Time Forecasting and Promising in Online Retailing: When Will Your Package Arrive?

Providing fast and reliable delivery services is key to running a successful online retail business. To achieve a better delivery time guarantee policy, we study how to estimate and promise delivery time for new customer orders in real time. Delivery time promising is critical to managing customer expectations and improving customer satisfaction. Simply over-promising or under-promising is undesirable due to their negative impacts on short-term/long-term sales. We are the first to develop a data-driven framework to predict the distribution of order delivery time and set promised delivery time to customers in a cost-effective way. We adapt regression tree and quantile regression forests to generate distributional forecasts by exploiting the complicated relationship between delivery time and relevant predictors, which include the queue-length predictors to model the distribution center operations. We further propose a cost-sensitive classification decision rule to decide the promised delivery day from the predicted distribution. Tested on a real-world data set shared from JD.com, our proposed machine learning based models deliver superior forecasting performance. In addition, we demonstrate that our framework has the potential to provide better promised delivery time in terms of both cost and accuracy, as compared to the conventional promised time set by JD.com. Through a more accurate estimation of the delivery time distribution, online retailers can strategically set the promised time to maximize customer satisfaction and boost sales. Our data-driven framework reveals the importance of modeling fulfillment operations in delivery time forecasting, which sheds light on further improvement directions.

Distribution Center material flow control: a line balancing approach

Distribution Center (DC) operations entail several steps and processes to deliver the product/service to the customer. With processes that entail several steps, it is expected that flow issues will arise. One of the most troubling issues in DCs is the material flow balance, especially in DCs with semi-automated facilities. In such facilities, there is so much reliance on the machines to do the work more efficiently. However, if we do not understand the logic of the machines and the flow, the process become inefficient and we create more bottlenecks and unbalanced production flow between input and output. The objective of this paper is to highlight the DC flow issues in semi-automated flow. More specifically, the paper focuses on the issue of running daily production/material flow based on the number of available people and not the output number required per day. We applied the line balancing approach as one of the lean manufacturing strategies in managing flow. We developed a line balance tool to help practitioners control the production flow more efficiently.

Simulation Research on Jingdong Orders System Based on Flexsim

Order processing system is the beginning and core part of distribution center operations, and efficient order processing operations can not only improve customer satisfaction but also reduce costs. Therefore, the trade-off analysis between order processing difficulty and quick response time, improving the handling capacity and efficiency while reducing order processing costs are regarded as two big challenges for e-commercial enterprise. Based on queuing model as well as some data collected from Jingdong, a Chinese E-commerce giant, this paper constructed a 3D simulation model by using Flexsim, aiming at solving the bottleneck of the whole system of E-commerce order processing. According to the simulation, the author gives two order processing optimization solution, service stations optimization and queuing optimization to solve the two challenges.

Dollar Tree Logistics

This case explores the decision of a fast-growing company to expand its distribution network. Financial information is provided in it so students can understand the basic distribution network design covering inbound transportation, outbound transportation, distribution-center operations, and inventory.

Benchmarking and Monitoring International Warehouse Operations in Europe

We report on a cross‐sectional and longitudinal comparison of European distribution centers in the Netherlands. European distribution centers are responsible for the distribution of a manufacturer's (mostly Asian or American) products over customers in a large part of Europe, the Middle East, and Africa, often with strict service‐level agreements. In total, 65 physical warehouses, containing 140 European, Asian, and American European distribution center operations, in combination with different outsourcing relations (own‐account, dedicated outsourced, and public outsourced), were benchmarked in 2000 and monitored over the period 2000–2004. We conclude that both in 2000 and 2004, European warehouses are more efficient than Asian and American warehouses, and outsourced operations (particularly public warehouses) are more efficient than own‐account operations. Over the period 2000–2004, efficiency appears to have declined substantially; the most distinct differences are to be found among public outsourced warehouses and, because many European distribution center warehouse operations of European origin are run by public service providers, among European warehouses. This decline in efficiency also led to a decline in productivity, in spite of the fact that overall the available technology has improved. We conjecture potential causes for this decline.

Pipeline Scheduling and Inventory Management of a Multiproduct Distribution Oil System

Within the oil supply chain, although refinery operations are extensively studied, distribution center operations are not being explored to their full potential. In this paper, these types of operations are studied. A mixed-integer linear programming (MILP) approach is used to model the problem of oil derivatives pipeline transportation scheduling and supply management. The objective of the model is to attain a high level of operation, satisfying clients and accounting for distribution center restrictions and compulsory tasks. First, a base model is developed, which accounts for product transportation, inventory management, and daily client satisfaction. Later, an extension is presented to account for a settling period for each new lot that arrives at the distribution center. A pumping schedule, including the product sequence, lot volume, and timing issues, is obtained. Also, the inventory management is performed while accounting for daily clients requests and quality control tasks. A continuous represent...

Supervisory coaching in a logistics context

PurposeTo examine warehouse worker development associated with managerial coaching in the logistics industry.Design/methodology/approachExamine the efficacy of this developmental approach in a logistics context, a survey method was used to provide an overview of supervisors' coaching behavior at 18 distribution centers in the United States. Warehouse workers answered questions about their interactions with their supervisors and their own job satisfaction while supervisors answered questions pertaining to the job‐related performance of warehouse workers for whom they were directly responsible.FindingsThe study findings indicate that warehouse workers at these distribution centers encounter low levels of supervisory coaching behavior. However, despite these low levels, significant positive associations were found between supervisory coaching behavior, warehouse worker job satisfaction and supervisors' perceptions of their subordinates' job‐related performance.Research limitations/implicationsThe findings are based on the perceptions of respondents at the specific distribution centers in our study and therefore should not be interpreted as being generalizable. However, we hope that they will stimulate further empirical research on the growth, development and retention of front‐line logistics workers – an important, but relatively under‐researched, area of supply chain management.Practical implicationsThe logistics industry is becoming progressively more service‐oriented and technologically‐driven and greater front‐line worker competence in these areas will be required for many firms to survive.Originality/valueAs the greatest aggregation of labor in the supply chain is in distribution center operations, our findings may encourage logistics organizations to evaluate the feasibility of adopting more people‐oriented supervisory approaches like coaching that focus on personnel development and the provision of more intrinsically‐rewarding work environments.

Dollar Tree Logistics

This case explores the decision of a fast-growing company to expand its distribution network. Financial information is provided in it so students can understand the basic distribution network design covering inbound transportation, outbound transportation, distribution-center operations, and inventory.

Improving order‐picking performance through the implementation of class‐based storage

Class‐based storage (CBS) partitions stock‐keeping units (SKUs) into storage classes by demand and randomly assigns storage locations within each storage class area. This study compares the performance implications of CBS to both random and volume‐based storage (VBS) for a manual order picking warehouse. In addition, this study considers the effect of the number of storage classes, the partition of storage classes, and the storage implementation strategy applied in the warehouse. The simulation results show that CBS provides savings in picker travel over random storage and offers performance that approaches VBS. Other operational issues having an impact on warehouse performance are examined. The results offer managers insight for improving distribution center operations.

Aligning Distribution Center Operations to Supply Chain Strategy

A major focus of modern day logistics is on achieving a higher level of responsiveness to marketplace demand, but with less inventory. Achieving the dual targets of lower cost and higher service has implications for every stage in the supply chain and in particular for distribution center operations. What is the extent to which organizations are adjusting their distribution center operations to match current supply chain concepts? Using a survey, roles that these facilities play are explored in order to determine the extent to which modern supply chain theory and distribution center operations are aligned.

Considerations in order picking zone configuration

In today’s competitive global economy, the focus is on faster delivery of small more frequent orders of inventory at a lower total cost. This often precludes the use of full pallet picking in warehouses so firms commonly use manual picking of cases and broken‐cases. Many firms increase the efficiency of their warehouses by using zone picking. Zone picking requires that a worker only pick those stock‐keeping units (SKUs) stored within their picking zone. In this paper we examine the configuration or shape of these picking zones by simulating a bin‐shelving warehouse to measure picker travel where SKUs are assigned storage locations either using random or volume‐based storage. The results show that the size or storage capacity of the zone, the number of items on the pick list, and the storage policy have a significant effect on picking zone configuration. In addition, we found that the absence of a back cross aisle also affected picking zone configuration. These results offer solutions to managers looking to implement improvements in distribution center operations.

Human resource assignment system for distribution centers

Information technology and its wide range of applications have begun to make their presence in a new generation of logistic and distribution service industry. A more flexible breed of application packages is emerging by the application of fourth generation language (4GL) technologies, which are able to provide foundations for true enterprise resource planning (ERP). There are many good reasons for adopting enterprise‐wide resource planning systems. This research, however, focuses on the development of a human resource assignment module (HR module), usually considered as an essential part of an ERP system. This module provides crucial human resource data and supports decisions in human resource utilization in distribution center operations. We detail the crucial algorithm for the HR module, which provides efficient and effective manpower management for key logistic/distribution center operations.

Reliability analysis of warehouse containers under life test policies

In a warehouse and distribution center operations, one of the basic ingredient of cost is the containers used in storage and distribution of goods. These containers or cases are perishable items because aging after a number of usage cycles known as turns. Thus, the economic case requirement planning is highly dependent on the case failure probability. In this paper, we assume a deterministic failure probability (p) and derive a reliability model under two life test policies. It is shown that the reliability is a function of p and the number of life test periods.