As supply chain procedures become more efficient and the retail environment becomes more competitive, some retailers have begun to offer one-hour delivery.
The nature of this scenario means that there is very little margin for error, so only a small proportion of delivery areas and product types would be eligible to achieve such a fast delivery. For example, Amazon Prime Now offers one-hour delivery within large cities for customers who pay an annual subscription and a fee per order.
This relies on an incredibly swift order pick and a sufficiently local customer.
When internet shopping overtook high street shopping in terms of sales volume at the end of 2015, it appeared that consumers had become used to a choice between travelling to make a purchase or waiting between a day and a week to receive their internet order. Largely this is still the case, however the number of retailers such as Argos willing to offer same day delivery means that the rest of the supply chain must be incredibly efficient.
The journey a product makes before it becomes available for sale can involve many stages. Delivery to the consumer, known as the ‘last mile’, can only be achieved within 60 minutes if the distribution centre is running at extremely high levels of efficiency.
The order fulfilment process would be as follows:
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Completed online
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Presented to the picker
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Picked from warehouse location
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Packed and labelled
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Delivered to customer
For this process to be completed so quickly, the resources at the distribution centre must be sufficient to achieve a constant flow of activity. Standard distribution and delivery models rely on economies of scale that involve a certain period of down time for the item. The reason a postal service can charge such a small amount per consignment is that the deliveries are consolidated into scheduled journeys. Every van would be full of orders, so the cost per item would be minimised. In a same day or one-hour delivery slot, the economies of scale would not apply in the same way.
It is yet to be proved how feasible it is to receive an order within 60 minutes of making an order. Even if such schemes run by Amazon and some supermarkets don’t turn out to be a success, the net result could still be that accelerated fulfillment becomes the norm. If drone delivery is to be implemented for fast food and internet shopping, such a speedy service would become more feasible.
