This presentation deals with the e-grocery distribution in urban areas and proposes a model specialized for the Local Food Supply Chain (LFSC) and the Smart Cities environment. The project, named Simulation and Optimisation of Urban Logistics (SOUL), develops in collaboration with Telecom Italia, a prototype for urban B2B freight distribution fleet routing management system in integration with business modeling and near field communications technology for LFSC. In details, SOUL has a twofold purpose. First, reduce with the use of ICT based solutions, the issues that affect the e-grocery (e.g., the inefficiency of the picking and delivery operations), determining the failure of the majority of pioneering e-grocery retails. Second, to deal the e-grocery with an innovative point of view, paying the attention on fresh food and LFSC, which are less considered in literature, as we will discuss. The combined usage of a Decision Support System and mobile application let us provide a solution to increase the effectiveness and the efficiency of the e-grocery operations.

1. An ICT-based reference model for E-grocery in Smart
Cities
R. Tadei1, E. Fadda1, L. Gobbato1, G. Perboli1, 2, and M. Rosano1
1
DAUIN Politecnico di Torino, Turin, Italy,
2
CIRRELT, Montreal, Canada,
Smart City-June, 15-17, 2016
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 1 / 16

2. Outline
Introduction
The Literature of e-grocery
The State-of-the-art of e-grocery
The E-grocery distribution model: SOUL Project
Goals
SOUL Architecture
Mobile applications
Perishable goods
Simulation-Optimization analysis
Computational results
Conclusions
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 2 / 16

3. Introduction
E-grocery distribution in urban areas
E-commerce is changing the retail business in different industry, while
e-grocery is still at an early stage
E-grocery is a new emerging and challenging business channel for the
food and beverage market
Need to find a model of success that ensures profitability to e-grocery
business.
The SOUL project
Local Food Supply Chain (LFSC) model
Innovative solution based on ICT and mobile applications
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 3 / 16

4. The Literature of e-grocery
The literature of e-grocery retailing can be split in two different main
streams:
Retailer’s point of view:
definition of efficient operational models and focus on the factors that
determinate the failures of e-grocery businesses
efficiently design and management of the e-grocery supply chain
key issues related to picking and delivery operations
home deliveries represent additional costs and investments
Impact of e-grocery on the Last mile distribution:
Green House Gas (GHG) emission reductions
potential benefits for urban areas
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 4 / 16

5. The State-of-the-art of e-grocery
LLacks in the state-of-the-art of e-grocery applied to local food
distribution:
A framework of e-grocery LFSC combined with a business model has
not been proposed yet
E-grocery as an additional channel for traditional grocery retailers
Consumer interest in local foods increases
Need to develop ICT application to the e-grocery LFSC combined
with a Decision Support System (DSS)
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 5 / 16

6. The E-grocery distribution model: SOUL Project
The project Simulation and Optimisation of Urban Logistics (SOUL)
develops in collaboration with Telecom Italia a prototype for urban B2B
freight distribution fleet routing managament system in integration with
business modeling and near field communications technology for LFSC.
Combined use of DSS, ICT and mobile application:
Increases the effectiveness and the efficiency of the e-grocery
operations
Allows retailers and consumers of fresh food to monitor the flow
along the entire supply chain
Enables the exchange of real-time shipping and traffic-related
information for the optimization of logistics operations and traffic
congestion mitigation
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 6 / 16

7. Goals
SOUL project has a twofold purpose:
Reduce with the use of ICT solutions, the issues that affect e-grocery
Deal the e-grocery with an innovative point of view, paying the
attention on fresh food and LFSC
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 7 / 16

8. SOUL Architecture I
Vehicle-to-Infrastructure (V2I) architecture
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 8 / 16

9. SOUL Architecture II
Main building blocks:
Traffic Handler Service (THS). It aggregates data and real-time data
from External Sources as private or public networks of sensors (in
Turin, provided by Traffic Operation Centre 5T) and from vehicles.
Thus, THS provides real-time information for third party applications,
such as the fastest paths for vehicles and the detection of congestion in
the urban area.
Central Unit (CU). It is the operative core block that builds optimised
routes for the distribution of fresh and perishable food, considering the
changing in the traffic conditions.
routing optimizer (VRPTW)
post-optimizer (DVRP)
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 9 / 16

10. Mobile Applications
To represent information to users, SOUL uses:
A mobile application design on the Android and written in Java
allows users to monitor the flow
along the supply chain
enables different operation (e.g.,
order placement, inventory
control, freight tracking and
receiving management showed
in figure)
connects users to the technology
infrastructure of the DSS
A db4o database to store persistent data.
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 10 / 16

11. Perishable Goods
Perishability is one of the levers of the SOUL project
SOUL tracks the position and monitors the temperature of perishable
goods from depot to the final destination
Collection of information through mobile and remote sensors on the
vehicles
Signaling environmental conditions not satisfied
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 11 / 16

12. Simulation-Optimization analysis I
The analysis of SOUL was conducted by a simulation-optimization
approach.
Data set
gathered during the URBan Electronic LOGistics (URBeLOG) Project
field
database of 16000 customers
networks ranging from 3 to 45 customers
Realistic scenarios
Small-sized food companies, less capable to manage deliveries with an
own feet of vehicles in an efficient way
Medium-large sized retailers having a more consistent demand and
vehicles with a capacity of about 50% greater than the previous.
Alternatives
each retailers performs the deliveries with own fleets
consolidation of foods from different firms in distribution centres
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 12 / 16

13. Simulation-Optimization analysis II
KPIs
Number of deliveries
Improvement % generated by the consolidation, in terms of:
number of vehicles
distances traveled
service times
cost savings
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 13 / 16

14. Computational Results I
Deliveries
Improvement [%]
∆ N. Vehicles ∆ Distance ∆ Time ∆ Cost
Scenario 1
30 - 50% - 47% - 40% - 47%
50 - 50% - 45% - 35% - 45%
100 - 25% - 32% - 23% - 32%
150 - 25% - 25% - 17% - 25%
200 - 25% - 28% - 19% - 28%
250 - 42% - 39% - 26% - 39%
Scenario 2
300 - 33% - 30% - 19% - 30%
350 - 38% - 33% - 22% - 33%
400 - 31% - 28% - 28% - 28%
450 - 40% - 32% - 21% - 32%
Table: Simulation Results.
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 14 / 16

15. Computational Results II
Consolidation of food allows operative and economical efficiency, mainly
for the small-sized retailers.
Costs decrease up to the 47% of reduction
outsourcing of the fleet management
cut of relative economical efforts
Reduction of the number of vehicles on the road and the distance
traveled respectively of about 50% and 47%
positive impact on the environment
Improvement in service time that is reduced by the 40%
The benefits are more relevant when retailers and logistics providers have
different capacity due to the greater capacity of the logistics provider
vehicles combined to the optimization of the routes.
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 15 / 16

16. Conclusions
We have introduced in the SOUL project a solution based on ICT and
mobile applications
We have integrate the e-grocery Supply Chain with a reference
business model
The simulation-optimization results have showed the positive impact
on environment and the e-grocery solution is capable to reduce the
number of vehicles on the road up to 50%
The integration and the synchronization of the entire chain are also
required to guarantee cost-effective robust solutions.
Tadei, Fadda, Gobbato, Perboli, Rosano SOUL project Smart City-June, 15-17, 2016 16 / 16