Omni-Channel Order Fulfillment: From Concept to Practice

Friday, October 5, 2018 - 9:00am - 9:45am
Keller 3-180
Vivek Farias (Massachusetts Institute of Technology)
The prevalence of omni-channel purchase behavior motivates a slew of new supply chain problems. Here, we describe one such new problem: the 'omni-channel fulfillment problem'. We formulate this problem as an online optimization problem. We propose a novel algorithm for this problem based on the primal-dual schema. We provide a performance analysis establishing that our algorithm admits optimal performance guarantees in the face of adversarial demand.

Our algorithm has been implemented at a number of large retailers. We describe one such large-scale implementation. This implementation processes on average tens of thousands of customer orders a day, and as many as hundreds of thousand of orders on peak demand days. We discuss the savings achieved through optimal order-fulfillment decisions that simultaneously increase turn and lower shipping costs for this implementation.