People Innovation Excellence

Off-Hour Improvements

Off Hour ImprovementsPhoto courtesy Rensselaer Polytechnic Institute

Industrial Engineer-Volume 45 Number 11

NIGHT DELIVERIES BETTER FOR MANHATTAN BUSINESSES, ENVIRONMENT

“Classic industrial engineering” results have led a number of Manhattan businesses to continue a pilot program that shifts daytime deliveries into the dark of night.

Jose Holguín-Veras, a Renssealer Polytechnic Institute professor, arrived at that conclusion, observing that 95 percent of goods delivered during the day. Shifting just 6 percent of them to off-hours in New York would reduce carbon emissions by more than 100 tons a year. And reducing daytime Manhattan traffic makes it easier for tourists and residents to browse and shop.

In general, vendor interested with deliveries.  The cost analysis by Renssealer and Rutgers University revealed that off-hour deliveries are 30 percent cheaper, with each stop two hours shorter than in the day, said Holguín-Veras. “Most drivers, they get paid by delivery route completed”, he said. “If they save two hours, that’s a significant increase in effective pay.”

However, the vendor’s customers, who worry about being stuck with the wrong delivery, had less incentive to switch. So the universities teamed up with the U.S. and New York City departments of transportation to provide $2,000 for business willing to give the new paradigm a try.

The interested restaurants, grocery stores, retailers and other business that couldn’t have staff take deliveries at night gave vendors keys. Drivers dropped their shipments, locked up and left. The NYC deliverEASE program; started in 2011, benefited the receiving businesses so much that many stuck with the program, and more signed up. Nearly 150 remain involved.

“I remember one of the interviewees, he said, ‘Jose, with regular hour deliveries we don’t know when the truck is going to show up. It could be 9 o’clock in the morning, 11 o’clock, 1 p.m. and we had to have a day and a half in stock. Now with off-hour deliveries, we open the store and our produce is sitting right there,”’ Holguín-Veras said.

So stores can reduce inventory to one day and manage their supply chains better, “classic industrial engineering,” he remarked. Worries about incorrect deliveries were overblown. Vendors are so eager to make off-hour delivery work that they work harder to ensure accuracy. Problems get fixed quickly.

“During regular hours, if you get delivery at 11 a.m. in Manhattan, when are you going to get a replacement back? Maybe 4, 5, 6 p.m. if you’re lucky,” Holguín-Veras said. “If you get the wrong stuff at 6 o’clock in the morning, you might get a replacement by 8 a.m. Which is better?”

Holguín-Veras aims to replicate the success elsewhere, and he would like more businesses to join. He has been discussing the program with officials in London. In October, a group of businesses in Sao Paolo, Brazil, invited him to lead a meeting to see how off-hour deliveries would work in the South American city.

Off-hour deliveries are not a tradition in the U.S. or the world, according to Holguín-Veras. Since the perception among delivery receivers is that such change is risky, project officials must work to convince them of the new model’s validity.


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