Title: E-fulfilment in grocery retailing: design insights for a store-based distribution system

Authors: Monica Rasini; Elena Tappia; Marco Melacini

Addresses: Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milan, Italy ' Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milan, Italy ' Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milan, Italy

Abstract: E-commerce dynamics are making the design of distribution systems more and more challenging, especially in grocery retailing. The use of stores as picking location for e-fulfilment brings the opportunity of both offering fast deliveries and exploiting synergies with the traditional channel. However, efficiently designing a store-based distribution system turns out to be a critical task. This paper addresses the tactical problem of selecting stores to be used as picking location and defining the related delivery zones. We developed a model for the delivery cost estimation using the continuous approximation approach, as well as a heuristic procedure to compare multiple store-based distribution systems. The model was applied to a real case. Results showed that properly selecting the picking locations in a store-based distribution system is recommended because cost saving can be up to 40%. The most cost-effective number of picking locations decreases with an increase in the online demand.

Keywords: e-fulfilment; electronic fulfilment; grocery retailing; distribution system; continuous approximation approach.

DOI: 10.1504/IJLSM.2021.116850

International Journal of Logistics Systems and Management, 2021 Vol.39 No.4, pp.470 - 490

Received: 17 Apr 2019
Accepted: 03 Jun 2019
Published online: 05 Aug 2021 *

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