Same Day Delivery

Last time we talked about the “Rodillas de Titano KaPeJu” Case in class and about the challenge that certain time lapses – for instance, the delivery time – need to be considered when ordering surgical material. This made me think about delivery time in general and how it is currently solved.

The same day delivery is an interesting and emerging topic within Logistics. Whereas 2012 50% of consumers were willing to wait a full week for free deliveries, it was only 35 % in 2014. So customers seem to get more impatient and demand short delivery times – even if they have to pay for it. The big E-Commerce retailers like Amazon or Ebay all offer same day delivery these days, even one-hour delivery services are offered. http://cerasis.com/2015/01/16/supply-chain-facts/

How can Amazon realize same day delivery?

If you order in the morning and pay the extra charge of 5.99 $ (as prime member) Amazon guarantees that you receive your package until 9 p.m. the same day (if your city is in the same day deliver offer included). https://www.youtube.com/watch?v=Cc2anPfCKFg. Amazon realizes that through investing in decentralized warehouses to establish next day delivery as standard and make same delivery an option for many.

Amazon Warehouseshttp://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/same-day-delivery-the-next-evolutionary-step-in-parcel-logistics

With the Amazon Prime Now App you can even order your stuff, be updated about the status and even the location of the courier in real time (it’s delivered by bicycle in the video) and you receive your order within one hour if you pay 7.99 $. (The video in this case is nice to watch and only about 1 minute: https://www.youtube.com/watch?v=ODLp4ZGQwzk)

The complex challenge of processing, fulfilling, and delivering an order within a few hours requires new types of networks. Current processes are often too slowly, fast and flexible couriers cannot handle big parcels. So the creation of a same-day delivery network comes at a high cost. Large volumes in each delivery district need to be achieved, which is difficult in the beginning anddepending on the operating modelmay require extensive upfront investment. Nonetheless, e.g. Amazon started creating networks capable of providing same-day delivery services at scale. Of course, this service is not yet available all over the country or for all items on Amazon. But the service is extending.

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