The Implementation of Urban Logistics Systems Lags Behind Ideas

In collaboration with the Institute for Supply Chain Management (ISCM-HSG) at the University of St. Gallen, Loginfo24 will now publish new insights from supply chain research on an ongoing basis. We will report concisely on practice-relevant innovations from dissertations and other publications by young researchers at ISCM-HSG. The publications with associated references can be found in the section “ISCM Publications.”

Starting off is Raphael Preindl. He deals with the topic of urban logistics systems (ULS).

(St. Gallen) The emergence of challenges in urban areas around the globe, including urbanization, an increasing volume of e-commerce, and changing customer preferences leading to growing traffic and emissions, has made components of the concept known as ‘urban logistics’ a strategic priority for many public and private actors in recent years. These challenges are expected to continue to grow in the future. Consequently, countermeasures in the area of smart city logistics are in high demand.

While the basic idea of urban logistics – the cross-company coordinated delivery and pickup of shipments – can be traced back to the 1990s, there has been a noticeable thematic “broadening” in the last decade, particularly due to technological advancements. More and more concept components – such as delivery robots or underground transport systems – are being added, which can be combined into so-called urban logistics systems (ULS). While there is no shortage of ideas, many pilot projects fail for various reasons that can be classified as implementation barriers.

Overcoming Implementation Barriers

To overcome these implementation barriers, innovative concepts are needed that do not merely address urban logistics itself but focus on its peculiarities and particularly its implementation. Ideally, these innovative concepts are designed to be adaptive, meaning they are detached from a specific situation in a particular urban area and thus transferable to different cities. In such a starting situation, it is always advisable to look at so-called success factors that need to be considered.

Regarding the implementation of ULS, various success factors can be derived, regardless of the individual project.

Success Factors

• Formation of a consortium with representatives from all relevant local stakeholder groups and particularly local politics, with a central person or department as responsible, aiming to consider all interests for the ULS.
• Appointment of a neutral coordinator who manages the ULS implementation project, e.g., by establishing a joint venture to ensure successful partnerships.
• Creation of a ULS concept tailored to the local context with a focus on realistic solutions to ensure feasibility.
• Prioritization of ULS measures with a gradual division into several pilot projects and a consolidation plan to ultimately create a comprehensive ULS.
• Pursuit of a long-term perspective for ULS-related measures to ensure the transition to day-to-day operations after implementation.

Verification via Contingency Analysis

While orientation towards the mentioned success factors provides the basis for a fundamentally sound implementation of ULS, it is certainly worthwhile to analyze the specific urban area where the respective project is to be implemented more closely. This examination can be carried out through a so-called “contingency analysis,” which deals with situation-dependent factors. In the case of ULS implementation, three different types of factors can be identified:

• Exogenous factors: Factors that have an impact across cities, e.g., nationally.
• Specific urban factors: Factors that are individually pronounced in each city.
• Endogenous factors: Factors determined by the respective stakeholders.

Basis for Promising Implementation

Based on this contingency analysis, a ULS tailored to each urban area can be created in combination with the generic urban logistics concept components. This approach aims for a high “fit” between the local conditions and the ULS, which forms the basis for a promising implementation. However, it is particularly important to note that this “fit” can change over the course of the implementation period, e.g., due to changing requirements for the ULS or changes among the involved actors. In light of this dynamism, an iterative implementation of ULS is advisable. Therefore, a hybrid project management approach is recommended, which combines elements from the classic waterfall methodology and an agile approach.

Suitable Implementation Management

While an iterative approach to the implementation of ULS can serve as the starting point for various implementation projects, there are several other elements to consider. A suitable implementation management must also address questions regarding the timing of implementation, the style of implementation, and the direction of implementation. Furthermore, continuous evaluation loops should be conducted throughout the entire project, e.g., based on selected performance indicators, so that short-term adjustments can be made in the sense of an adaptation analysis.

Revenue Planning and Control Often Falls Short

In addition to the operational aspects of ULS implementation projects, various elements must be considered that are essential for project success. Since the focus has often been solely on operational implementation – frequently with extremely pragmatic but sometimes shortsighted approaches – implementation planning and control are usually neglected. In light of these insights, it is therefore advisable to direct future efforts towards enhancing innovation capability and focusing on the implementation of ULS rather than innovating urban logistics concept components themselves, so that successfully implemented ULS face no further obstacles.

Raphael Preindl was a research associate and doctoral candidate at the Institute for Supply Chain Management at the University of St. Gallen (ISCM-HSG) from 2018 to 2021. Previously, he completed his master’s degree at the Alliance Manchester Business School and gained professional experience in management consulting and freight forwarding. He is a lecturer at the Duale Hochschule Baden-Württemberg. His doctoral thesis deals with the implementation of urban logistics systems. The work was published in the spring of this year by Springer Verlag and can be obtained here: https://bit.ly/3sCfzSA

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