MHI Solutions


Smart City Logistics and Home Delivery

Driverless vehicles or drones? Choices for home delivery methods are expanding, but there are challenges and new aspects to take into consideration.

By Michael G. Kay

Given the rapid recent development of driverless vehicle technologies, it is interesting to speculate as to what their impact will be with respect to the last mile delivery of goods to homes in urban environments. Ultimately, the combination of driverless delivery vehicle and airborne drone delivery should make it possible eliminate the need for all non-recreational shopping by allowing general merchandise, hot meals and groceries to be delivered to the home at a low cost. This will be especially important for the disabled and the elderly, as it would allow them to live in a typical sprawling U.S. suburban neighborhood and still have their shopping needs met without the requirement to drive.

While drones make it possible to quickly deliver products to a home, there are difficulties associated with providing enough clearance to make a delivery. Furthermore, many low-value bulky products are not cost-effective for drone delivery. As a result, ground delivery via driverless vehicles is likely to be the primary means for most urban last mile deliveries.

The big advantage of a driverless vehicle is that without a human driver it becomes economic to have direct delivery to a home from a distribution center (DC) only at a time when a person is at home and is able to unload their order from the vehicle. When a human driver is involved in a home delivery, the high labor cost necessitates routing multiple home deliveries that cannot be scheduled on demand, resulting in either leaving the order outside unattended or giving the driver access to the home.

The key to having fast and efficient direct home delivery is to have the DC located close to the home in order to effectively provide urban fulfillment.

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According to the recently released 2018 MHI Annual Industry Report, “Overcoming Barriers to NextGen Supply Chain Adoption,” eight out of ten survey respondents believe these supply chains will be the predominant model within just five years. However, the report found that the adoption of some of these technologies was slower than originally reported when MHI started the annual report in 2014. The report cites three top barriers to adoption of these technologies: 1. Making the business case for NextGen supply chain investments. 2. Tackling the supply chain skills gap and workforce shortage. 3. Building trust and security in digital, always-on supply chains. This issue of MHI Solutions focuses on the adoption of these digital solutions, from best practices in robotics and artificial intelligence to blockchain and innovations in last mile delivery.

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