Benchmarking the efficiency of express depots and hubs
A well-organized network of depots and hubs is the basis for services provided by express delivery companies. The efficiency and effectiveness in any distribution network is largely determined by the operation of the nodes in such a network. Therefore, depots' performance strongly influences services delivered by TNT Express to its customers.
The objective of this project was to evaluate and benchmark performance of the depots and hubs in a large-scale delivery network.
Data Envelopment Analysis (DEA) was found to be the most suitable approach for the evaluation of depots' performance. A DEA model was developed and used for the benchmarking. As a result, out of 44 depots, 31 depots were identified as efficient and 13 depots as inefficient. Furthermore, the statistical analyses indicated four factors that have a significant influence on the efficiency score. Moreover, the analyses showed that the efficiency level does not depend on the depots' size neither on the geographical region. The application of DEA to the distribution network of the express delivery company gave new insight into the evaluation of express services and filled an existing knowledge gap in the academic literature on this topic.
Keywords
Performance benchmarking, distribution network, facility performance, efficiency, decision making units, data envelopment analysis, operations research, operations management
Branches/Industries
Logistics Service Providers, Warehousing
Company
Leading express delivery company