Last-Mile Logistics Analytics—for Everyone Who Isn't Amazon

Today we speak with Professor Ram Bala, an expert in supply chain management analytics, particularly last-mile delivery. He has very interesting insights into how today’s supply chain is evolving. He talks about various methods and algorithms he uses, the specific challenges inherent in doing last mile logistics and deliver, how pricing factors in, and how everyone is trying to catch up to Amazon.Ram Bala: Then there is this great opportunity to actually use the data effectively. But that is a long way to go in terms of coming up with the right algorithms, both on predictions, as well as the optimization to actually get this done in a meaningful way. And if you look at the landscape today in terms of industry, I would say very few companies that actually there yet. Right? I mean, Amazon obviously is a clear example of the leaders in the space, but everyone's trying to get there as well.Ginette Methot: I'm GinetteCurtis Seare: And I'm CurtisGinette: And you are listening to Data CrunchCurtis: A podcast about how applied data science, machine learning and artificial intelligence are changing the world.Intro: Today we speak with Professor Ram Bala, an expert in supply chain management analytics, particularly last-mile delivery. He has very interesting insights into how today’s supply chain is evolving.Ram Bala: My name is Ram Bala. I'm a professor at Santa Clara University as well as a data science leader at CH Robinson, which is the largest logistics marketplace in North America. I've been working with topics in supply chain, belated data science even before it was called data science for the past 15 years. I got my Ph.D. in operations research and a supply chain from UCLA and a, I've been working on these problems both for companies as well as within the academic context that I've been working on research problems. And more recently I think there's been a lot of excitement in this space. And then that's where my involvement with both startups and as well as larger companies has gone up and I, I came into the CH Robinson fold as a consequence of an acquisition. So I was part of a startup that was working on last mile logistics and how to, how to improve that.Curtis Seare: Got It. That's awesome. And the space that you're in is really interesting. Could you give the audience just to contextualize the problem set that you're focused on?Ram: So I think one of the major things that has changed in logistics is the growth of e-commerce and also personal mobility. I mean if you think about Uber Logistics as a larger concept that covers both moving people as well as products and what's really happened is the, the availability of real time data has had a significant consequences on how we are able to predict as well as optimize how we move things and that's then also raised the bar in terms of customer expectations. We expect to get a get a ride to go somewhere within and within five minutes, we expect to get a product within a day and those expectations have been set by specific companies say Uber in the case of personal mobility. In the case of products, it's Amazon and having set the stage, everyone's now trying to be competitive with them, which means that in the product space, certainly all e-commerce companies as well as companies that were in brick and mortar are trying to achieve that same end goal, which is how do I get products to consumers quickly at the same time and not spend too much money? Right? That's the core problem. Now doing that as hard, it's become easier simply because we have real time access to real time data in terms of location as well as you know where products are at an even point. But it is a hard problem to solve.Curtis: Some of the intricacy and you know, routing and pricing and kind of interplay there. Can we dive into a little bit of those details?Ram: Absolutely. So I think uh, routing problems have been around ever since transportation's been around,