Delivery service: expectation, performances and costs for a distributor

Abstract

The basic service offered by a distribution center consists of providing the customer with what he ordered at the place he specified and at the time he wanted. However, since the expectations of the customers vary, this service is generally offered under various forms that have names such as emergency orders, express orders, replenishment orders, stock orders, scheduled orders, etc.

The evaluation of one such delivery service by the distribution center can be performed at three main levels. At the level of the service mix, the complementarity of the offered services must be evaluated. At the level of the service itself, the fit between its performance and the market segment it is supposed to serve should be checked. At the level of the implementation of the service, the performance of the different operations that constitute the service must be jointly evaluated and optimised.

In this work, we propose a framework for the assessment of the service and for its implementation. This framework does not give a recipe for the selection and the implementation of an adequate service. It only lists the main questions whose answers — which are specific to each company — will help in selecting and implementing an adequate delivery service.

This work was done under the sponsorship of DHL, Belgium.