Assessing E-retailer’s Resilience During the COVID-19 Pandemic
Research Team: Miguel Jaller (lead) and Anmol Pahwa
UC Campus(es): UC Davis
Problem Statement: The COVID-19 pandemic led to a significant breakdown of the traditional retail sector, resulting in a substantial surge in e-commerce demand for the delivery of essential goods. The e-retailers coped with this surge in demand, albeit while operating at a much lower level of service than usual, by outsourcing part of their operations through: crowdsourced delivery fleets, alternative pickup/delivery locations, 3rdparty logistics service providers, etc. Given e-retailers’ role in the supply of essential goods, the pandemic raised concerns pertaining to e-retailers’ ability to maintain and efficiently restore level of service in similar market disruptions.
Project Description: This study assesses the resilience of last-mile distribution operations under disruptions, by integrating a continuous approximation–based last-mile distribution model; the resilience triangle concept; and the Robustness, Redundancy, Resourcefulness, and Rapidity (R4) resilience framework. The resulting integrated tool, the R4 Resilience Triangle Framework, is a novel performance-based qualitative-cum-quantitative domain-agnostic framework (where “domain” means “discipline,” such as engineering, economics, etc.). Through a set of empirical analyses, this study highlights the opportunities and challenges of different distribution/outsourcing strategies to cope with disruption. For example, the study analyzed the use of an independent crowdsourced fleet (flexible service contingent on driver availability); the use of collection-point pickup (unconstrained downstream capacity contingent on customer willingness to self-collect); and integration with a logistics service provider (reliable service with high distribution costs). Overall, the e-retailers must create a suitable platform to ensure reliable crowdsourced deliveries, position sufficient collection-points to ensure customer willingness to self-collect, and negotiate contracts with several logistics service providers to ensure adequate backup distribution.