Online Order Fulfillment

ALLOCATE DELIVERY CAPACITIES 
USING CUSTOMER SEGMENTATION
The Problem

 

E-commerce faces daunting challenges in product delivery.  Like many online retailers, you want to promise customers product delivery during specific time slots when orders are placed, but often cannot due to reliance on third party services.  Once a service like UPS or FedEx has picked up a package from your fulfillment center, you have no control over the remainder of the transaction.  If possible, you would also like to be able to reward your most loyal or favored customers with preferential delivery choices.  These are all difficult to do.

 

The Solution

 

One invented solution is designed to help you accurately assess your product and delivery capacities at the time an order is place, allowing you to promise accurate delivery windows to your online customer.  The system computes and displays the available delivery windows (in time spans as short as 30 minutes).  At your discretion, favored customers can be offered more delivery time choices than others.  The time slot selected by the customer then can be automatically reserved, without affecting delivery promises made to other customers.

 

This system can be programmed to set up ranges of values for different groups of customers, such as favored customers as opposed to newly acquired customers.  The system computes a value for each customer based on things like order history (e.g. average shipment size and order frequency).  Each customer is then assigned to one of the groups, based on his or her associated value.  After the assignment, the system adds up all the resources used by customers in each of the groups, and determines the % of resources used by each group.  This shows how capacity has been actually allocated among the groups.  You may choose to set aside a higer percentage of resources for favored customers and a lower percentage of the resources to newer customers.  These are your target allocations.  The ranges of value initially set for the different groups can be adjusted to cause the actual capacity allocations among the groups to converge with target allocations.Based on the above-mentioned valuations, customers in different groups will be presented with different numbers of delivery windows.  For example, the group of favored customers is given more, or more-desirable, delivery windows to choose from, while newly-acquired customers are offered fewer or less-desirable options.This solution will allow you to confidently promise a variety of delivery windows to groups of prioritized customers, without compromising commitments made to others.