Exploring the Impact of Delivery Robots on Last-Mile Delivery Capacity Planning Using Simulation

Background: Over the past decade, the growth of ecommerce and omnichannel order fulfillment has led to a spike in last-mile delivery services. Last-mile delivery being the most expensive portion of the supply chain has resulted in process improvement initiatives by industry and academia targeting lower operational costs. Methods: In this study, we use simulation to account for the daily randomness regarding order quantities with missed deliveries being rolled over to the next period and attrition of the capacities used to meet the demand for each period. Further, to alleviate the impact on operations due to attrition, we consider the use of automation as a replacement for permanent capacity. Results: From the simulation results, we observe that the negative operational impact of employee turnover can be overcome with a combination of delivery robots and crowdsourcing with a payback period as short as 1.55 years. Conclusions: Optimal resource allocation is further refined by the use of simulation. The use of advanced automation such as robots seems to be a viable option for businesses to lower operational costs for some scenarios.