Background
The customer is a leading e-commerce player that aims to empower small businesses. The social commerce app mainly focuses on buyers and sellers across tier 1, 2, and 3 cities. It was paying high costs for deliveries and needed a system to make them efficient, reduce costs, and improve resource utilization of delivery agents and vehicles.
Challenges
The company relied heavily on third-party vendors and courier services for their first and last mile delivery orchestration. This led to heavy expenses, longer delivery periods, and a lack of resources to offer next-day delivery.
The e-commerce company was looking for a supply chain network design to build and manage its own infrastructure by setting up distribution centers (DC) to cover maximum areas, increase delivery volume, and reduce costs.
Solution
Let’s learn how the e-commerce platform leveraged Dista Insight to streamline first and last mile delivery with cost reductions.
- Dista’s spatial analytics software mapped all onboarded retailers in a particular area and created clusters by factoring in multiple parameters like distance traveled by delivery agent in a day, number of orders per cluster, and more.
- The system then created a territory to identify and recommend the most suitable location for a distribution center and helped in the resource allocation of delivery executives for each DC.
- Dista Insight ran multiple simulations with custom business rules to create optimal clusters to define territories.
- Our robust AI/ML-based engines calculated the cost per shipment (CPS) in addition to distribution center cost, travel cost, etc.
Value Delivered
- Reduced logistics and fulfillment costs by more than 40%
- Designed and strengthened an efficient supply chain network plan that was applied for 75 cities
- Offered crucial insights to set up distribution centers
Highlights
- Reduced overall costs by orchestrating first and last mile in-house with Dista Insight
- Removed outliers by facilitating data cleansing
- Calculated the crucial metric of cost per shipment
- Forecasted resources considering the number of orders from each area
