IDEAS home Printed from https://ideas.repec.org/p/dar/wpaper/157242.html
   My bibliography  Save this paper

Configuration of last-mile distribution networks for an encroaching manufacturer

Author

Listed:
  • Tahirov, Nail
  • Akhundov, Najmaddin
  • Emde, Simon
  • Glock, Christoph H.

Abstract

The surge of e-commerce has revolutionized distribution channels, escalating from simple single-channel frameworks to complex multi-channel and omni-channel networks. In particular developments in information technology and rising customer expectations have popularized the transition from multi- to omni-channel distribution, where the classic brick-and-mortar stores can also be part of the omni-channel distribution strategy. This evolution poses intricate challenges for manufacturers, especially in the integration and optimization of these channels. Thus, there is a strong need for an in-depth analysis of how manufacturers navigate the transition across diverse distribution channels to meet the varying needs of different customer segments. To this end, we investigate single-, multi-, and omni-channel distribution strategies for the case of a manufacturer selling both standard and customized products to different customer segments with varying preferences. A central contribution of this research is the creation of an integrated optimization model that resolves a location-routing problem, designing a complex and realistic supply chain configuration suitable for an omni-channel distribution system. This model strategically serves to fragmented customer demands through multiple shopping and delivery options. The outcomes of our study indicate that an omni-channel distribution system is a viable approach, capable of serving more customer segments while simultaneously minimizing logistics costs. In addition, we offer a detailed analysis of the cost implications of in-store pickup versus home-delivery options, providing a comprehensive evaluation of their respective impacts on total logistics costs and customer responsiveness.

Suggested Citation

  • Tahirov, Nail & Akhundov, Najmaddin & Emde, Simon & Glock, Christoph H., 2025. "Configuration of last-mile distribution networks for an encroaching manufacturer," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 157242, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:157242
    DOI: 10.1007/s10479-024-06031-3
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/157242/
    as

    Download full text from publisher

    File URL: https://tuprints.ulb.tu-darmstadt.de/29130
    Download Restriction: no
    File URL: https://doi.org/10.1007/s10479-024-06031-3
    Download Restriction: no
    File URL: https://libkey.io/10.1007/s10479-024-06031-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Perl, Jossef & Daskin, Mark S., 1985. "A warehouse location-routing problem," Transportation Research Part B: Methodological, Elsevier, vol. 19(5), pages 381-396, October.
    2. Paul, Joydeep & Agatz, Niels & Savelsbergh, Martin, 2019. "Optimizing Omni-Channel Fulfillment with Store Transfers," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 381-396.
    3. Laporte, Gilbert & Nobert, Yves, 1981. "An exact algorithm for minimizing routing and operating costs in depot location," European Journal of Operational Research, Elsevier, vol. 6(2), pages 224-226, February.
    4. Anil Arya & Brian Mittendorf & David E. M. Sappington, 2007. "The Bright Side of Supplier Encroachment," Marketing Science, INFORMS, vol. 26(5), pages 651-659, 09-10.
    5. Cao, Wen & Jiang, Bo & Zhou, Deming, 2010. "The effects of demand uncertainty on channel structure," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1471-1488, December.
    6. Michael Schneider & Michael Drexl, 2017. "A survey of the standard location-routing problem," Annals of Operations Research, Springer, vol. 259(1), pages 389-414, December.
    7. Prodhon, Caroline & Prins, Christian, 2014. "A survey of recent research on location-routing problems," European Journal of Operational Research, Elsevier, vol. 238(1), pages 1-17.
    8. Mitchell A. Millstein & James F. Campbell, 2018. "Total Hockey Optimizes Omnichannel Facility Locations," Interfaces, INFORMS, vol. 48(4), pages 340-356, August.
    9. Wei, Ying & Li, Feng, 2020. "Omnichannel supply chain operations for luxury products with conspicuous consumers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 137(C).
    10. Arshinder & Kanda, Arun & Deshmukh, S.G., 2008. "Supply chain coordination: Perspectives, empirical studies and research directions," International Journal of Production Economics, Elsevier, vol. 115(2), pages 316-335, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nail Tahirov & Najmaddin Akhundov & Simon Emde & Christoph H. Glock, 2025. "Configuration of last-mile distribution networks for an encroaching manufacturer," Annals of Operations Research, Springer, vol. 344(2), pages 679-720, January.
    2. Xuefei Yang & Manuel Ostermeier & Alexander Hübner, 2024. "Winning the race to customers with micro-fulfillment centers: an approach for network planning in quick commerce," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 32(2), pages 295-334, June.
    3. Tahirov, Nail & Glock, Christoph H., 2022. "Manufacturer encroachment and channel conflicts: A systematic review of the literature," European Journal of Operational Research, Elsevier, vol. 302(2), pages 403-426.
    4. Amin Aghalari & Darweesh Ehssan Salamah & Carlos Marino & Mohammad Marufuzzaman, 2023. "Electric vehicles fast charger location-routing problem under ambient temperature," Annals of Operations Research, Springer, vol. 324(1), pages 721-759, May.
    5. Arslan, Okan, 2021. "The location-or-routing problem," Transportation Research Part B: Methodological, Elsevier, vol. 147(C), pages 1-21.
    6. Weijun Xie & Yanfeng Ouyang & Sze Chun Wong, 2016. "Reliable Location-Routing Design Under Probabilistic Facility Disruptions," Transportation Science, INFORMS, vol. 50(3), pages 1128-1138, August.
    7. Nico Schauerte & Ricarda Schauerte & Maren Becker & Thorsten Hennig-Thurau, 2024. "Making new enemies: How suppliers’ digital disintermediation strategy shifts consumers’ use of incumbent offerings," Journal of the Academy of Marketing Science, Springer, vol. 52(3), pages 672-694, May.
    8. Sahar Validi & Arijit Bhattacharya & P. J. Byrne, 2020. "Sustainable distribution system design: a two-phase DoE-guided meta-heuristic solution approach for a three-echelon bi-objective AHP-integrated location-routing model," Annals of Operations Research, Springer, vol. 290(1), pages 191-222, July.
    9. Alvarez, Jose A. Lopez & Buijs, Paul & Deluster, Rogier & Coelho, Leandro C. & Ursavas, Evrim, 2020. "Strategic and operational decision-making in expanding supply chains for LNG as a fuel," Omega, Elsevier, vol. 97(C).
    10. Rahma Lahyani & Leandro C. Coelho & Jacques Renaud, 2018. "Alternative formulations and improved bounds for the multi-depot fleet size and mix vehicle routing problem," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 40(1), pages 125-157, January.
    11. Escobar-Vargas, David & Crainic, Teodor Gabriel, 2024. "Multi-attribute two-echelon location routing: Formulation and dynamic discretization discovery approach," European Journal of Operational Research, Elsevier, vol. 314(1), pages 66-78.
    12. Michiel A. J. uit het Broek & Albert H. Schrotenboer & Bolor Jargalsaikhan & Kees Jan Roodbergen & Leandro C. Coelho, 2021. "Asymmetric Multidepot Vehicle Routing Problems: Valid Inequalities and a Branch-and-Cut Algorithm," Operations Research, INFORMS, vol. 69(2), pages 380-409, March.
    13. Nagy, Gabor & Salhi, Said, 2007. "Location-routing: Issues, models and methods," European Journal of Operational Research, Elsevier, vol. 177(2), pages 649-672, March.
    14. Fischer, Vera & Pacheco Paneque, Meritxell & Legrain, Antoine & Bürgy, Reinhard, 2024. "A capacitated multi-vehicle covering tour problem on a road network and its application to waste collection," European Journal of Operational Research, Elsevier, vol. 315(1), pages 338-353.
    15. Zajac, Sandra & Huber, Sandra, 2021. "Objectives and methods in multi-objective routing problems: a survey and classification scheme," European Journal of Operational Research, Elsevier, vol. 290(1), pages 1-25.
    16. Lin, Yun Hui & Wang, Yuan & Lee, Loo Hay & Chew, Ek Peng, 2022. "Omnichannel facility location and fulfillment optimization," Transportation Research Part B: Methodological, Elsevier, vol. 163(C), pages 187-209.
    17. Daniel Negrotto & Irene Loiseau, 2021. "A Branch & Cut algorithm for the prize-collecting capacitated location routing problem," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 29(1), pages 34-57, April.
    18. Azcuy, Irecis & Agatz, Niels & Giesen, Ricardo, 2021. "Designing integrated urban delivery systems using public transport," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    19. Kelley, Jason & Kuby, Michael & Sierra, Rodrigo, 2013. "Transportation network optimization for the movement of indigenous goods in Amazonian Ecuador," Journal of Transport Geography, Elsevier, vol. 28(C), pages 89-100.
    20. Veenstra, Marjolein & Roodbergen, Kees Jan & Coelho, Leandro C. & Zhu, Stuart X., 2018. "A simultaneous facility location and vehicle routing problem arising in health care logistics in the Netherlands," European Journal of Operational Research, Elsevier, vol. 268(2), pages 703-715.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dar:wpaper:157242. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dekanatssekretariat (email available below). General contact details of provider: https://edirc.repec.org/data/ivthdde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.