A model approach to last-mile distribution
There are lessons about a data-driven approach to last-mile network design and operation from Brazil’s largest online platform.
In 2012, a capacity crisis in Brazil’s e-commerce distribution channels delivered a wake-up call to the country’s largest online retail platform, B2W Companhia Digital. The company decided that its last-mile distribution strategy had to become more systematic and analytically grounded.
This year, B2W began implementing a re-engineered network design, based on a model developed in collaboration with the MIT Center for Transportation & Logistics (MIT CTL). For the first time, the company is using a network optimization model to assess its operational footprint and provide actionable insights on how to make the network more cost efficient and improve service quality.
B2W’s journey reflects the changing nature of the Brazilian e-commerce market, and how companies must evolve in line with dynamic online commercial environments. Along the way, the enterprise has learned some important lessons about adopting a data-driven approach to last-mile network design and operation.
Course change
B2W delivers packages to tens of millions of e-consumers in urban, suburban and rural areas of Brazil. The company began operating in 2006 and since then has developed four different online platforms. It commands around 27% of the Brazilian e-commerce market.
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In 2012, a capacity crisis in Brazil’s e-commerce distribution channels delivered a wake-up call to the country’s largest online retail platform, B2W Companhia Digital. The company decided that its last-mile distribution strategy had to become more systematic and analytically grounded.
This year, B2W began implementing a re-engineered network design, based on a model developed in collaboration with the MIT Center for Transportation & Logistics (MIT CTL). For the first time, the company is using a network optimization model to assess its operational footprint and provide actionable insights on how to make the network more cost efficient and improve service quality.
B2W’s journey reflects the changing nature of the Brazilian e-commerce market, and how companies must evolve in line with dynamic online commercial environments. Along the way, the enterprise has learned some important lessons about adopting a data-driven approach to last-mile network design and operation.
Course change
B2W delivers packages to tens of millions of e-consumers in urban, suburban and rural areas of Brazil. The company began operating in 2006 and since then has developed four different online platforms. It commands around 27% of the Brazilian e-commerce market.
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