Logistics 4.0 & e-commerce: evaluating the impacts of smart keys on last-mile delivery

One of the main challenges for last-mile logistics in B2C e-commerce are failed deliveries, i.e. those deliveries not completed due to the absence of customers at home. Among the high number of solutions under investigation to solve this issue, the smart keys based on Internet of Things (IoT) technologies seem to be very promising, and have been already adopted by some players. This study investigates the benefits achievable if the houses of the customers are equipped with such a solution. Benefits are assessed by comparing the delivery costs related to (i) the traditional home-delivery and (ii) the home-delivery with the adoption of the smart key. In particular, different levels of diffusion of this solution are considered, from 25% to 100% of the houses to be visited in a delivery tour. More precisely, two vehicle routing problems are investigated. The standard vehicle routing problem (VRP), that aims at minimising the travel distance only, and the vehicle routing problem with smart keys (VRPSK) that attempts to maximise the number of successful deliveries in a tour (considering both the distances and the probability of failed deliveries). The VRPSK is a development of the VRP with time windows (where a delivery is forced to occur in a specific time lapse). Results – based on the application of the two routing problems in a district of Milan – prove that the smart key is a valid solution to reduce failed deliveries and, consequently, delivery costs. If compared to the traditional home-delivery, the adoption of smart keys allows a delivery cost reduction between 3% and 11%, when respectively 25% and 100% of the customers’ houses are equipped with smart keys. This work can be a starting point for investigating the potentialities of IoT technologies to improve the efficiency of last-mile logistics.