TY - JOUR
T1 - Optimal in-store fulfillment policies for online orders in an omni-channel retail environment
AU - Difrancesco, Rita Maria
AU - van Schilt, Isabelle M.
AU - Winkenbach, Matthias
PY - 2021
Y1 - 2021
N2 - The explosive growth of e-commerce creates a need for increasingly responsive omni-channel fulfillment capabilities, which raises new challenges in inventory management and order fulfillment for retailers. In response to these challenges, many retailers attempt to establish so-called ship-from-store concepts, which leverage their physical store networks to fulfill online orders. In this study, we analyze the optimal setup of these in-store fulfillment processes of online orders for an omni-channel retailer. We use a simulation-based approach combined with exploratory modeling to prescribe optimal fulfillment policies under a variety of sources of uncertainty. We apply our proposed model to a case study informed by real data from a leading sports fashion retailer in New York City in order to illustrate the practical applicability and value of our approach. Our results determine (i) the optimal amount of time to allow for batching of online orders prior to starting the in-store picking process; (ii) the optimal amount of time to allow for readily picked orders prior to starting the delivery process; (iii) the optimal number of pickers; and (iv) the optimal number of packers, and the related performance measures. Finally, we build on our analysis results to derive a set of managerial implications applicable to many omni-channel problems.
AB - The explosive growth of e-commerce creates a need for increasingly responsive omni-channel fulfillment capabilities, which raises new challenges in inventory management and order fulfillment for retailers. In response to these challenges, many retailers attempt to establish so-called ship-from-store concepts, which leverage their physical store networks to fulfill online orders. In this study, we analyze the optimal setup of these in-store fulfillment processes of online orders for an omni-channel retailer. We use a simulation-based approach combined with exploratory modeling to prescribe optimal fulfillment policies under a variety of sources of uncertainty. We apply our proposed model to a case study informed by real data from a leading sports fashion retailer in New York City in order to illustrate the practical applicability and value of our approach. Our results determine (i) the optimal amount of time to allow for batching of online orders prior to starting the in-store picking process; (ii) the optimal amount of time to allow for readily picked orders prior to starting the delivery process; (iii) the optimal number of pickers; and (iv) the optimal number of packers, and the related performance measures. Finally, we build on our analysis results to derive a set of managerial implications applicable to many omni-channel problems.
KW - E-commerce
KW - Exploratory modeling analysis
KW - Logistics
KW - Omni-channel retailing
KW - Simulation
UR - http://www.scopus.com/inward/record.url?scp=85101266544&partnerID=8YFLogxK
U2 - 10.1016/j.ejor.2021.01.007
DO - 10.1016/j.ejor.2021.01.007
M3 - Article
AN - SCOPUS:85101266544
SN - 0377-2217
VL - 293
SP - 1058
EP - 1076
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 3
ER -