Integrated planning in hybrid courier operations

Abstract

Purpose – The purpose of this paper is to present the design and evaluation of an integrated system that supports planners and dispatchers to deliver enhanced courier operations. In addition to regular deliveries and pickups, these operations include: first, mass deliveries to be served over a horizon of multiple days; and second, real-time dynamic requests (DRs) to be served within the same service period. Design/methodology/approach – To address the aforementioned challenges, the authors developed an architecture that enhances a typical fleet management system by integrating purpose designed methods. Specifically, the authors plan mass deliveries taking into account typical routes of everyday operations. For planning DRs in real time, the authors propose an efficient insertion heuristic. Findings – The results from testing the proposed optimization algorithms for planning mass deliveries and real-time DRs are encouraging, since the proposed algorithms outperform current practices. Testing in a practical courier environment, indicated that the enhanced planning system may improve significantly operational performance. Research limitations/implications – The proposed optimization algorithm for the dynamic aspect of this problem comprises a heuristic approach that reaches suboptimal solutions of high quality. The development of fast optimal algorithms for solving these very interesting and practical problems is a promising area for further research. Practical implications – The proposed integrated system addresses significant problems of hybrid courier operations in an integrated, balanced manner. The tests showed that the allocation of flexible orders within a three-day time horizon improved the cost per flexible order by 7.4 percent, while computerized routing improved the cost of initial (static) routing by 14 percent. Furthermore, the proposed method for managing DRs reduced the excess cost per served request by over 40 percent. Overall, the proposed integrated system improved the total routing costs by 16.5 percent on average compared to current practices. Originality/value – Both the planning problems and the related solution heuristics address original aspects of practical courier operations. Furthermore, the system integration and the proposed systematic planning contribute to the originality of the work.