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
Abstract
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
Introduction
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
last mile.
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
The current issue and full text archive of this journal is available at
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This research was conducted with Grant SES 0216839 from the National Science Foundation.
Last-mile supply
chain efficiency
409
International Journal of Operations &
Production Management
Vol. 27 No. 4, 2007
pp. 409-434
q Emerald Group Publishing Limited
0144-3577
DOI 10.1108/01443570710736985