Strategies to increase the number of customer orders that can be handled in online grocery fulfilment centres: A case study at AH Online

Although e-groceries is nothing new, the scale at which it is currently growing in the Netherlands has not been seen before. Over the past four years, the market share of online grocery shopping showed an average growth of over 20% per year. While it was already challenging to keep up with this high demand, it became increasingly more difficult due to COVID-19. In fear of getting infected, some consumers no longer visit the supermarkets, and instead, order their groceries online, further increasing the demand for e-groceries. One of the challenges caused by the high demand is handling enough customer orders in the online grocery fulfilment centres. These fulfilment centres can be described as “supermarkets” in which groceries are collected by operators instead of the consumer. After the groceries have been collected, they are either delivered to the consumer, or they can be collected at a pick-up point. While multiple strategies are described in literature that allow for the handling of more customer orders, most of them have only been applied to warehouses and distribution centres. Due to the significantly different operations of fulfilment centres, it is unknown whether the same strategies can be applied here. This thesis examines which strategies are appliable to online grocery fulfilment centres and how much additional customer orders can be handled. The identification of strategies was done through a case study at AH Online’s fulfilment centre in Rotterdam. A discrete-event simulation model was then used to evaluate the strategies. The output of this thesis is an overview of four strategies including their performance on timesaving, order picking productivity, and of course, the additional number of customer orders that can be handled.
Transport, Infrastructure and Logistics