Last-mile supply chain efﬁciency:
an analysis of learning curves
in online ordering
Thomas J. Kull, Ken Boyer and Roger Calantone
Michigan State University, East Lansing, Michigan, USA
Purpose – As companies extend supply chains via direct delivery to consumers, supply chain
efﬁciency depends upon the usability of the online ordering system. The purpose of this paper is to
focus on customer order cycle efﬁciency gains through the “learnability” of web sites.
Design/methodology/approach – The paper analyzes empirical data using nonlinear regression
from seven ﬁrms and over 4,000 customers to examine how order time – an important performance
metric – changes within an online grocery ordering environment.
Findings – The evidence supports various forms of power-law learning for web-based ordering
(i.e. the ﬁrst few orders involve substantial learning). However, signiﬁcant differences exist between
web sites, and a portion of the ordering time may be irreducible.
Research limitations/implications – The research lends insight into how web sites inﬂuence last-
mile supply chain efﬁciency via differing learning rates in the order cycle. Perceptual measures were
used in order to assess customer beliefs.
Practical implications – Online order entry serves as the starting point for many supply chain
actions. Managers can use this research to benchmark their web site performance and subsequently
take action to improve the efﬁciency and service of their supply chain.
Originality/value – The empirically validated model allows researchers and web-based businesses
to utilize the provided learning rate measure as an ease of use performance metric.
Keywords Supply chain management, Lead times, Electronic commerce
Paper type Research paper
Many resources have recently been focused towards better understanding of the
last-mile supply chain – that portion of the supply chain delivering products directly
to the consumer. Numerous opportunities exist to increase customer convenience and
operational efﬁciencies by delivering directly to the customer in a manner similar to the
Dell direct model (Kraemer et al., 2000). These opportunities exist in all ﬁve
components of the customer order cycle, viz.; order communication, order entry, order
processing, order picking and packing, and delivery (Stock and Lambert, 2001). In this
study, we focus on the ﬁrst two components: order communication and order entry via
an online ordering system. This interface normally occurs via a web site, which can
either improve or damage both the convenience and efﬁciency of a supply chain’s
The web site for order entry serves as the customer doorway to a company – while
doing away with physical stores can result in substantial reduction in costs due to the
removal of tangible facilities, a web site that is difﬁcult to use and learn sets
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This research was conducted with Grant SES 0216839 from the National Science Foundation.
International Journal of Operations &
Vol. 27 No. 4, 2007
q Emerald Group Publishing Limited