Utkonos Online: implementing flexible time slots to deliver 15% orders  more with the same resources

  1. Challenge
    Even out peak demand periods and optimize vehicle utilization
  2. Solution
    Route orders right at the checkout on the site to offer customers flexible delivery time slots
  3. Results
    Freed up to 15% of resources and increased the number of customers by offering them a range of available time slots for delivery
Storage area for all types of temperature goods, including FRESH and ULTRAFRESH at the fullfilment center «Mosrentgen»
About the client
Utkonos Online is an online store that has operated on the e-grocery market for almost 20 years. The company employs almost 5000 people and owns two large temperature-controlled fulfillment centers, two mini-fulfillment centers, and a fleet of 650 temperature-controlled vehicles.
Step one. Reviewing the baseline ordering process

Initially, the delivery process at Utkonos Online looked like this: the customer would make an order on the site and select a convenient time slot for delivery. The online store system would then check the number of orders already taken for this time slot and hide it from the customer’s view after reaching a certain limit. 

As a result, customers in some areas had a hard time ordering deliveries for the most popular morning and evening hours — the system would quickly run out of available slots. It also failed to account for the load in the neighboring areas where there could still be spare resources for delivery. These issues led to uneven vehicle utilization, suboptimal routes, and, consequently, higher delivery costs. 

The company decided to build an end-to-end delivery process — from the checkout page to order picking at the warehouse — to improve transport management and let more customers order deliveries. 

Parked fleet of electric carts and inventory in storage
Step two. Implementing an internal TMS 
Utkonos Online decided to make full use of its Transport Management System (TMS) in managing orders. TMS knows the content of the user’s shopping cart and the dimensions of the products in the order. It can try to add the order to existing routes if the vehicle has spare capacity. 

It goes like this: after the customer proceeds to checkout, TMS analyzes the product’s dimensions and the delivery address. If it finds existing routes with spare capacity, it displays the available time slots to the user. Otherwise, it creates a new route — if free vehicles are available. 

TMS automatically selects the appropriate time interval for the customer’s order
With an internal TMS, Utkonos Online gained more flexibility in offering customers available time slots. The same time slot may be shown to or hidden from some customers depending on several factors.

First, TMS analyzes the delivery address and defines whether it’s possible to add the order to an existing route. If it isn’t possible, and the system has no available resources to create a new route, TMS prompts the customer to select another time slot for the next day or later. 

Second, the system factors in the dimensions of the order. Orders vary in size, and some of them can fit even into an almost fully loaded vehicle, while others can’t. 

This feature helps TMS allocate orders and select time slots without human intervention. Customers whose orders can’t be added to existing routes due to their size or delivery address are offered an alternative delivery interval or put on a waiting list until a new route is created.
Step three. Integrating TMS with RouteQ
The internal TMS performs preliminary order routing, and this data is sent to the RouteQ server at regular intervals. This is done to increase route density and free up resources to handle new orders.

The routing solution can swap orders and reassign them to other, more suitable routes. The only thing that doesn’t and mustn’t change is the time slot selected by the customer.

For example, TMS filled 18 vehicles with orders. RouteQ reassigned some orders and reduced the number of vehicles to 15 or 16. These 2 or 3 vehicles, now vacant, are available for delivering orders.

Such iterations take place several times a day helping the company maximize the utilization of each vehicle and accept additional orders. 
Implementing RouteQ algorithms: results and figures
Utkonos Online is currently piloting a two-stage planning process in two mini-fulfillment centers (Mosrentgen and Volkovsky) and plans to roll it out to new facilities.

So far, the two-stage planning approach has produced the following results:

  1. The dynamic display of available time slots has made Utkonos Online more flexible in managing each order. The company is no longer restrained by the general time slot limit and can accept more orders. It’s also able to even out the periods of peak demand
  2. Dynamic routing has improved route density and freed up to 15% of resources. With these developments, Utkonos Online is now able to accept orders from new customers and use its fleet more efficiently
  3. Routing time has been reduced more than three times. This has freed up the time of logistics specialists: they can now invest more into solving other business challenges and improving the efficiency of delivery services
Any questions?
Feel free to fill the form and we’ll get back to you shortly
Fri Jan 14 2022 16:57:39 GMT+0300 (Moscow Standard Time)