Data-Driven Decision-Making in Last-Mile Logistics

In November 2023, Sami Serkan Ozarik presented his thesis on new advances in last-mile delivery in logistics.

The concept of last-mile delivery in logistics primarily refers to the distribution of shipments, like parcels from online orders to customers’ chosen locations. This process starts when a shipment reaches a central depot and ends upon delivery to the final destination. Various scholars have explored different definitions and perspectives of last-mile logistics, highlighting its complexities and nuances.

The central aim of this thesis is to optimize last-mile logistics using data-driven methods within the Vehicle Routing Problem (VRP) framework. VRP focuses on finding optimal routes for a fleet of vehicles to serve customers. There’s a distinction between deterministic VRPs, where all parameters are fixed and known, and stochastic VRPs, which account for uncertainties like variable demand or travel times. This thesis bridges traditional logistic decision-making and data analytics, focusing on data-driven routing problems between deterministic and stochastic VRPs.

Two main issues in last-mile delivery services are addressed:

1. Customer Availability and Delivery Time Windows: A significant challenge is the high rate of failed deliveries due to customer unavailability. The thesis explores the trade-offs between customer-chosen delivery time windows and company-optimized schedules. Chapters 2 and 3 discuss data-driven algorithms to enhance delivery efficiency and customer satisfaction. These chapters demonstrate that considering customer availability information and relaxing strict time windows can lead to cost savings and higher delivery success rates.
2. Leveraging Real Operational Data: Chapter 4 delves into using historical route data to improve last-mile delivery solutions. This approach aims to bridge the gap between theoretical route planning and practical route implementation. By incorporating experienced drivers’ tacit knowledge, the thesis enhances route planning efficiency, reducing the discrepancy between theoretical planning and real-world implementation.

In summary, this thesis contributes to the field of logistics by developing innovative, data-driven strategies to optimize last-mile delivery, addressing critical challenges like customer availability and the practical implementation of routing solutions.