According to Descartes's third annual consumer sentiment study of ecommerce home delivery...
of consumers said
deliveries are unreliable
of consumers facing issues took action against a delivery company
of consumers reported issues with deliveries
of consumers had negative experiences with delivery
were dissatisfied with the delivery process
As the demand for e-commerce grows at an increasing rate, delivery services struggle to keep up, leaving countless customers dissatisfied. Statistics from a Deloitte report prove that distributors are pressured to satisfy the delivery expectations 84% of customers, and this lasting issue poses a threat to both parties. The issue of inefficient deliveries lies most prominently in the effectiveness of distribution centers. A 2022 Gartner report predicted that, within a few years, 70% of businesses will struggle with inventory levels. This issue is attributed to poorly organized distribution centers and warehouses, disrupting the delivery process as a whole.
(Decartes third annual consumer sentiment study of ecommerce home delivery)
A multitude of scholars also emphasize the importance of the distribution network in their works. Karl Marx, a historically renowned German philosopher, explicitly states that “Nothing is more common than the reproach that the economists regard production too much as a goal in itself, and that distribution is equally important” (Karl Marx, Introduction to a Contribution to the Critique of Political Economy). Additionally, Andrei Schevenko and Makoto Watanabe explain the emergence of distribution to reduce search costs in their respective articles, "Middlemen*" by Schevenko and "A Model of Merchants" by Watanabe.
As technology has advanced, companies have been able to expand globally in product delivery services, but there are still challenges when it comes to manufacturing, sorting, and packaging. This leads to slow response times and reduced delivery service efficiency. Because of these problems, delivery service companies are met with challenges as money is lost, reputation as a fast delivery service is tainted, and people no longer want to use the service.
The typical delivery model follows a step-by-step process entailing order processing, inventory management, packaging and shipping, and the "last-mile" delivery. First, the customer's order is received, validated, and prepared for fulfillment. This step also confirms product availability, customer details, and payment information. Next is inventory management, which guarantees products are available when customers order using methods including inventory tracking systems, just-in-time inventory models, and demand forecasting. The third step, packaging and shipping, is essential to safeguard products during transportation. After packaging, labels and tracking information are generated. The final step is commonly addressed as the "last mile," which is the most crucial and demanding phase of delivery. This is when packages are transported from the local distribution center to the customer. However, this stage is easily impacted by conditions such as traffic and weather, which can hinder the delivery's transportation
Businesses follow a recurring warehouse fulfillment model, which allows companies to control inventory and track stock levels, conduct regular audits, and manage inventory restocking. Products are inspected for quality and accuracy before shipping, and businesses choose preferred shipping carriers, negotiate shipping rates, and optimize shipping routes to reduce costs and delivery times. These warehouses are typically customized to meet storage and handling needs. making it suitable for a wide range of products. While this model offers control, it's extremely demanding, requiring significant space, labor, and infrastructure investment, ultimately making it impractical for smaller businesses.
We looked towards existing companies recognized for their effectiveness in product distribution for a solution, particularly companies such as Amazon and Walmart. We learned that the first ever distribution center was established by Walmart in 1971, revolutionizing international shipping. Amazon took great inspiration from this system and, in 1997, constructed two of their first modern fulfillment centers. The function of these facilities is to scan and store products sent from FBA sellers until they’re purchased, then pick up these orders from storages and ship them to customers. Each facility is responsible for managing the entire shipping process themselves.
We contacted two professionals with an expertise in product distribution and provided them with a set of questions. Their responses are as follows:
1) What are some conditions that people working in distribution work in?”
"Most distribution facilities or manufacturing plants are NOT climate controlled unfortunately. So, the conditions can be pretty brutal: hot in the summer, cold in the winter. Depending on the facility, conditions might have high noise levels, dust, exposure to chemicals, etc., so proper ventilation is always a concern.
Production targets and shipping deadlines drive our workday. In distribution centers especially, there’s often a strong focus on speed and accuracy; picking, packing, and hitting hourly quotas. In manufacturing, the pace might be tied to assembly lines or machine cycles. During peak seasons, things can get intense quickly to keep up with demand, so most warehouse and manufacturing jobs have standards and expectations to meet on an hourly and daily basis.
Many people that work in distribution or manufacturing work non-standard shifts, such as swing (3p-12a), graveyard (11-8a) or even rotating shifts where they take turns covering those afternoon/evening shifts or weekends. These shifts are good for some (less crowded commutes, shift differential pay) but tough on sleep if you're not a night person. Often times also there is also mandatory overtime during peak period.
Higher level of risk. Forklifts, conveyors, heavy machinery and repetitive motion all can contribute to injuries.
Most facilities are high-tech now. Productivity and products are tracked through the buildings from Receiving to Shipping with WMS systems.
Typically, unless you're an individual machine operator or stock picker, you may work on a team with others. For some, that can be challenging."
2) How do tech innovations make these jobs easier?
"Automation and robotics have really taken the material movement and transport away from a human. Ergonomically, we try to design a work process to be as safe as possible, but if we can have a machine do it, it's much better. Especially with repetitive motion injuries with are very common.
Scanners and RF units to put away, pick and process materials have been huge with respect to saving time and accuracy. Anytime we can barcode something and scan it, it takes the human error out of it. Even the most accurate person will write down something wrong once in a while. Voice picking now is huge: a headset will give you the next location, sku and qty to pick, so both your hands are free to use.
Most machines now are 'smart', even forklifts. A machine will tell you what's wrong before it breaks. Eliminating costly downtime."
3) “What challenges does the industry present for its employees?”
"As long as people still work in factories and distribution centers, there will always be struggles with physical strain and fatigue. We actually engineer work processes and functions taking this into account: It's called P&F (Personal and Fatigue). If your expectation is 100 pieces per hour at the start of the shift, then your engineered standard would drop down to 70 pieces per hour in the final hour of the day because you'll get tired, need a couple of restroom breaks, water, etc. throughout the shift.
Injuries are always an issue. Especially repetitive motion injuries like carpel tunnel, back injuries etc. Also, working around heavy machinery, blades, forklifts, and the pressure of high productivity demands can pose risk and doing the same motion hundreds or thousands of times a shift can be mentally draining, not just physically tiring.
There can be high turnover in frontline roles. Some companies rely on temporary or seasonal labor, which can mean less job security and fewer benefits for certain workers. As retail seasons fluctuate, so does our staffing.
Again, as with the first question: Shift work and environmental conditions are always challenging for some. Some thrive in adverse conditions lift late shifts or long hours, but it's not for everyone."
4) “Is AI used in these facilities? What happens if it fails?”
"In the type of business that we're in now, I personally don't use AI to run any machinery or systems. I do create policies and SOP's and use AI tools to create docs, forms and sheets. There are times I need something quickly, so If I can use Canva, ChatGPT, or Grok to give me some frameworks go off of I will. Kind of like giving me a skeleton to work with and I throw on the meat. We also create weekly and monthly safety topics for managers to share with their teams and I'll often use ChatGPT if I don't already have it. It's a time saver."
5) ‘What are some challenges of working with these innovations?”
"Over-reliance: If something goes down, it's always good to have a backup manual way of doing things. When there is down time it can be extremely costly. So can repairs.
Maintenance and technical issues: Working With high tech machinery can be nice, but you also need a maintenance team who is competent, and technical support who is available 24/7. We still need humans to maintain machines (for now 😉)"
1) What are some conditions that people working in distribution work in?
"In the warehouse I’m in, it can get in the low 40s, not sure the lowest but I can tell you, you sometimes wear 3 layers and gloves and a beanie
In the summer time it is super hot, like a sauna"
2) How do tech innovations make these jobs easier?
"Well for the easiness of it, it’s a faster and streamlined process to get as much done in the most efficient and cost-effective way
This allows you to talk through and focus on the actual [assignment]"
3) What challenges does the industry present for its employees?
"The challenges we run into are lack of interest, motivation, or engagement. When working too many hours the team gets burned out. The expectation of each employee is to do quotas set for each department"
4) Is AI used in these facilities? What happens if it fails?”
"I’m not involved much in the AI side
However it is part of our sorter and production communication.
When they don’t read each other it is a nightmare,
But the data produced helps us fix the issues too."
5) What are some challenges of working with these innovations?
"Challenges are cheating the system or skipping processes. Human errors
Taking from one place to fill another but not following processes to move freight
We have introduced a new system and it doesn’t work like the other, so retraining and teaching is big and a little frustrating at same time
You have to work through the glitches or what works and what doesn’t
It’s a lot of questions
But in time it does work and you soon forget about the headache and actually like the change."
We examined a multitude of existing patents for methods of distribution from both of the companies we analyzed. The most prominent were patent number US9777502B2, Multi-level fulfillment center for unmanned aerial vehicles (Amazon Technologies Inc), patent number US9305280B1, Airborne fulfillment center utilizing unmanned aerial vehicles for item delivery (Amazon Technologies Inc), and patent number US10346793B2, Systems and methods for order filling (Walmart Inc). All of these products contribute to the product distribution industry by modernizing the existing distribution centers further to be even more efficient.
US9777502B2
“A multi-level (ML) fulfillment center is designed to accommodate landing and takeoff of unmanned aerial vehicles (UAVs), possibly in an urban setting, such as in a densely populated area. Unlike traditional fulfillment centers, the ML fulfillment centers may include many levels (i.e., stories, floors, etc.) as permitted under zoning regulations for respective areas. The fulfillment center may have one or more landing locations and one or more deployment locations to accommodate UAVs, which may delivery at least some of the items from the fulfillment center to locations associated with customers.” (Google Patents)
US9305280B1
“Described is an airborne fulfillment center (“AFC”) and the use of unmanned aerial vehicles (“UAV”) to deliver items from the AFC to users. For example, the AFC may be an airship that remains at a high altitude (e.g., 45,000 feet) and UAVs with ordered items may be deployed from the AFC to deliver ordered items to user designated delivery locations. As the UAVs descend, they can navigate horizontally toward a user specified delivery location using little to no power, other than to stabilize the UAV and/or guide the direction of descent. Shuttles (smaller airships) may be used to replenish the AFC with inventory, UAVs, supplies, fuel, etc. Likewise, the shuttles may be utilized to transport workers to and from the AFC.” (Google Patents)
US10346793B2
“In some embodiments, a method can comprise receiving a request for one or more orders, and analyzing the one or more orders. Each of the one or more orders can comprise one or more items and at least a portion of the one or more items are available at a warehouse. The method can further comprise determining one or more pick lists based at least in part on the analyzing the one or more orders and also based at least in part on an inventory layout of the warehouse, determining a first route for a first pick list of the one or more pick lists, and determining a second route for a second pick list of the one or more pick lists, wherein the first pick list and the second pick list each comprise a first common item. Other embodiments of related methods and systems are also provided.” (Google Patents)
Customer Needs: The customer wants an efficient and secure delivery system to receive their products without error
Performance: The product must be able to sort and organize a variety of products to be distributed and shipped nationally
Size and Weight: The product should fit a majority of a massive facility to maximize output
Aesthetics: There’s no preference for the appearance as the product won’t be too exposed
Materials: There’s no demand for any particular material, however it must be strong enough to withstand long-term activity.
Safety and Legal Issues: Any malfunctions could prove hazardous to operators in the vicinity
Ergonomics: The product should be easy to constantly operate with the necessary experience
Operating Environment: Constant operating of machinery could cause it to overheat and may require a cooling system
Global Environment: The product requires a large power source and sources could prove hazardous
Service Life: The product should be capable of functioning 24/7
Product Life: Certain components should be replaced, but the full product will be long lasting
Durability and Maintenance: The product requires routine maintenance to reduce risk of malfunction
Our problem is centered around modernizing product sorting and distribution systems in order to maximize delivery efficiency, but this likely entails replacing human workers for a fully automated process. As a result, countless workers could be rendered unemployed and struggling financially. Additionally, if the proper precautions aren’t established any human operators within the area could possibly be left in a hazardous environment at risk of injury. Because of this, before releasing our product into any workplaces, we will ensure that proper precautions are made for maximal safety.
The solution must involve an efficient method of transportation for all the goods to be delivered in the right place. The design must also be easily replicated. In order to work, a constraint would be to make sure it is cost efficient and using given materials such as the AI sensors. There is also a limited amount of time for this problem to be solved as there was a deadline to meet.
Efficient and automated system
Minimal errors
Meets user needs
Works during testing
Limited time and materials
Potential coding or mechanical errors
Requires a group effort
Must be presentable by 4/29
We concluded that the greatest demand for our product can be traced back to warehouse and distribution center managers, whom we consider our primary end users and target audience. Our stakeholders are large businesses seeking partnerships to manage product fulfillment and underdeveloped countries with a high demand for global delivery. Experts on the subject matter primarily includes large delivery corporations with existing fulfillment centers.