Too Late to Apologize? Performance Implications of Specialization and Variety in Last-Mile Delivery
Lunch Seminar in presence
Building BL26/B – Room 0.19 (ground floor)
Department of Management, Economics and Industrial Engineering
Via R. Lambruschini, 4/B
Technical University of Darmstadt & DB Schenker
Last-mile distribution is costly for logistics service providers and sustaining productivity in distribution tasks is essential to many organizations. Therefore, managers seek to determine the most efficient routes for a fleet of vehicles to supply various customers with products from different distribution channels, e.g., cooled and non-cooled perishable products. In most last-mile settings, the routes are planned by a dispatcher representing a decision making entity and executed by a professional truck driver.
The presentation focuses on the effect of specialization and variety on service performance in the context of last-mile distribution in brick-and-mortar grocery retailing. Prior research points to different strategies to accomplish high service performance through the positive effects of experience: Specialization to capture the benefits of repetition and variety to allow opportunities to learn.
In a recent study, we examine the impact of team- and individual-level experience. We find that team familiarity positively correlates with service performance at the driver-dispatcher team level. Our results for the individual level propose different directions. For the driver level, we find that specialization in distribution channels is positively associated with service performance. However, the opposite is the case for the dispatcher level, where exposure to variety in distribution channels is positively associated with performance.
Drawing on these findings, we go beneath the distribution channel level and investigate customer-specific experience in the identical distribution channel. We are motivated by the observation that drivers interact socially with customers and engage in verbal communication to build relationships. Communication can be time-consuming, which spawns negative implications for service performance. We find that drivers’ customer-specific experience is negatively associated with performance, while dispatchers’ customer-specific experience has no significant effect.
The results highlight the need for organizations to split specialization and variety into process dimensions rather than treating them as mutually exclusive. Social components of customer-specific experience might also be relevant for consultancy services, caring professions, or restaurant services. Overall, the study identifies new ways to improve service performance in last-mile distribution through a different and effective work allocation.
Dominic Loske is a postdoctoral researcher at the Institute of Production and Supply Chain Management at the Technical University of Darmstadt and incoming Vice President as Head of Collection and Distribution Europe at DB Schenker. He is a member of the HumanTech Scientific Committee.