Academic journal article International Journal of Electronic Commerce Studies

Optimization of Sorting Systems in Destination Distribution Centers of Business-to-Consumer Courier Companies

Academic journal article International Journal of Electronic Commerce Studies

Optimization of Sorting Systems in Destination Distribution Centers of Business-to-Consumer Courier Companies

Article excerpt

ABSTRACT

We analyzed the workflow of sorting systems in destination distribution centers of current courier companies and identified problems. Subsequently, two points of view were put forth regarding the optimization of sorting systems: the first is to apply radio frequency identification technology (RFID) to sorting systems and vertically optimize the sorting process inside the courier companies; the second is to implement a sharing mechanism for sorting systems to integrate sorting systems of courier companies horizontally. Further, data regarding manual sorting systems and automated assembly line sorting systems were compared through simulation. The results show that when actual daily processing capacity is higher than the processing capacity at the inflection point, automatic assembly line sorting systems are more economical and efficient than manual sorting systems.

Keywords: Automated Assembly Line Sorting, Radio Frequency Identification Technology, Simulation

(ProQuest: ... denotes formulae omitted.)

1. INTRODUCTION

Business-to-customer e-commerce has achieved explosive growth in China. Consumer delivery demands reflect multi-variety, small-volume and multiple batch characteristics. Customers are mostly dispersed and the products they purchase are generally small items with low prices. As such, logistics costs accounts for a larger proportion of the expenditure. The express-delivery industry in China consists of three main types: state-owned courier companies like China Railway Express and EMS; private courier companies like Shun Feng Express and Shen Tong Express; and international companies like UPS and FedEx.

In the business-to-customer space, e-commerce places a higher emphasis on the user experience. As such, consumer requirements in terms of logistics are more stringent than customer-to-customer online shops. E-commerce that has brought about significant courier companies profits and they are now beginning to build their own logistics system due to dissatisfaction with third-party distribution platforms, such as Jingdong Mall, Taobao, Suning and others. Although domestic private courier companies are growing rapidly, future development is still worrying. Sorting, as the middle part of logistics, is the core part of the system. Improving the efficiency of sorting systems is key to enhancing the efficiency of distribution and compressing logistics costs. This paper aims to propose an express automatic sorting system with the support of the radio frequency identification technology and use of an automated assembly line instead of manual sorting to improve efficiency and reduce error rates.

There is much literature related to warehouse selection and sorting systems. The definition of a selection system is to remove a small part of the cargo from the storage system to meet the demands of an individual customer1. A selection system has a higher intensity than manual labor. Manual labor affects both the total logistics cost and the service level of logistics . In most cases, the cost related to the selection activities accounts for more than half of the total storage cost3,4

Different from a warehouse selection system, express items reach the sorting area directly after arriving at the distribution center and do not need to be stored at a distribution center. The operation process of a distribution center includes sorting, packaging, distribution and so on. But in the current situation, the labor intensity of manual sorting is also high, which increases the logistics cost and affects the level of logistics service. With the development of identification technology, radio frequency identification technology has become a key technology to improve the efficiency and effectiveness of logistics and supply chain management. Radio frequency identification technology can use a radio frequency signal to identify, classify and manage logistics and information flow without human intervention, and thus avoids human errors to a large extent5. …

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