4.1. Postal Sector
The organization of postal networks, whether by national or private operators, is based on their availability and principles of expediency and rationalization. The application of these principles should lead to an improvement in productivity in postal operators.
However, factors initially expected to contribute to productivity improvement may negatively affect the quality perceived by users within the service process. Focusing solely on productivity can obscure the effectiveness of the range of activities that the service provider needs to undertake. Efficiency does not necessarily imply effectiveness. This can be a trap for operators seeking to reduce costs.
When a shipment reaches the final processing center, it still needs to be delivered to the ultimate address. This segment is referred to as delivery in the postal item transmission process. According to the author’s estimates, in some cases, delivery accounts for up to 57% of the total costs of transmitting a postal item. The situation becomes even more complicated if delivery attempts fail, requiring the recipient to collect the item from the postal operator’s business units. In the worst-case scenario, the item may need to be returned to the sender.
Here, the question of optimizing last-mile delivery arises, where two dominant approaches can be recognized: the adoption of new technologies (such as parcel lockers) or better consolidation and synchronization of existing resources through vehicle and employee sharing to increase utilization rates [
46]. Efficient delivery organization is crucial, both from a cost perspective and in terms of environmental impact [
47]. The success of a delivery organization is limited by human capacities, which we view through the lens of productivity. Therefore, there is a need to explore opportunities for the robust implementation of new technical and technological solutions.
Despite all the activities undertaken to reduce the proportion of human labor, cultural preferences dictate a preference for delivery options. For example, attended home delivery is the favorite option for the majority of e-commerce users in most European countries [
48]. However, this approach faces certain challenges: fragmentation of orders among users, short delivery deadlines, and inadequately developed environments [
49]. Another significant issue is that postal operators are often unable to provide narrow delivery time windows, which increases the likelihood that recipients will not be present at the delivery address. The differences in delivery failure rates between providers largely depend on the policy they apply in case of recipient absence [
47].
In the postal industry, the primary indicator for a delivery person is usually the number of parcels delivered, which is the ultimate result of all activities. However, several intermediary steps must also be considered as part of the final output. These include parcel pickup, loading and unloading, locating parking spots, and delivering parcels to doorsteps. Additional challenges arise in buildings without elevators, as well as in environments with limited space for movement, poor visibility or accessibility of buildings, unclear address markings, and varying types of delivery locations. Other factors, such as potential cash-on-delivery collections and the preparation of reports on parcel defects, should also be taken into account. Due to the heterogeneity of postal items, their characteristics regarding weight, dimensions, and cash-on-delivery amounts also need to be taken into account.
There is a crucial symbiosis between productivity and quality, where both can be maximized if the organization focuses on essential aspects and executes them correctly. The quality of service provided by the postal operator is defined by the training of the deliveryman, the speed of parcel transmission, delivery within promised timeframes, and the maintenance of parcel integrity.
The postal sector, being labor-intensive, relies heavily on its workforce. The final user experience is often shaped by encounters with deliverymen who may not always be 100% prepared for the successful completion of postal services. Therefore, ensuring continuous quality in postal service execution is not easy. Additionally, different customers can contribute to creating a negative experience and its widespread dissemination through modern communication channels.
There is often a perception that improving service quality leads to decreased productivity and increased costs. To achieve an optimal balance between productivity and quality, simultaneous focus on both is necessary. In the service domain, it is not possible to serve new customers as long as existing customers are dissatisfied. Unsatisfied customers lead to the tying up of more resources. This situation is exacerbated when customer complaints are received afterward, requiring additional capacities to address the complaint process.
4.2. Delivery Areas and Description of Evaluated Delivery Zones
One approach to organizing delivery is to divide the urban area into delivery areas. This is a very delicate task because it requires forming delivery areas in such a way that couriers are as evenly loaded as possible, considering all constraints and uncertainties. In other words, the aim is to ensure that productivity values, as well as other key performance indicators (KPIs), are within acceptable limits. One obstacle is the population density of delivery areas, the structure of the road network, terrain configuration, and parking space availability, all of which affect delivery efficiency. Therefore, continuous monitoring of parameters related to delivery areas is essential to enable timely corrective actions.
Novi Sad is the second largest city in Serbia and the capital of the autonomous province of Vojvodina. The city also represents one of the largest economic and cultural hubs in Serbia. According to the 2022 census, the population of the city proper area totals 260,438, while its urban area (including the adjacent settlements of Petrovaradin and Sremska Kamenica) comprises 306,702 inhabitants. The total land area of the city is 699 km
2, while its urban area spans 129.7 km
2. The city is located on important transport corridors, which provide significant comparative advantages. Based on the analysis of operations conducted by a private postal operator across its nine delivery areas (
Figure 1) during one working month in the city of Novi Sad, a significant proportion of the distance travelled, ranging from 17% to 31%, was observed. Consequently, the question arises whether the goal of a deliveryman should be to cover as much distance as possible or if it is necessary to optimize delivery routes so that they can achieve as many deliveries or pickups as possible with the least amount of distance travelled. Of course, it is not possible to eliminate the distance travelled entirely, but it should be maintained at an optimal level. In some situations, this parameter is not directly influenced by the deliveryman, such as when they cruise to find parking spaces or encounter traffic congestion. Therefore, it should be considered to assess the available time for possible delivery completions.
The data were collected through an interview with the operator’s management, which lasted approximately three hours. During the interview, they presented their data management framework by delivery area, based on which we concluded that we could derive the necessary KPIs from their data. Through the discussion, we learned about the various challenges and issues they face. We also determined that the data for August 2024 would be sufficiently representative. The sample covered 22 working days in August 2024, during which there were no public holidays in the observed period.
4.3. Services Productivity
The basis for determining service productivity consists of identifying appropriate inputs and outputs, the relationships between them, and the system that produces services [
50]. In addition to the differences compared with goods, services differ from each other in terms of intangibility, inseparability, simultaneity, and heterogeneity [
51]. The peculiarity of the service sector is its labor intensity, thanks to the workforce that delivers services. Workers providing services do so under the influence of various personal, social, technical, and organizational factors [
52]. Regarding services, a precisely defined set of steps is established that leads to the creation of the desired output, and the different nature of services compared with goods complicates this [
53].
The productivity of a particular activity is linked to how effectively resources in the service process are transformed into economic outcomes for service providers and value for their customers [
41]. In the service sector, given the nature of service processes, such systems can be viewed as open systems, given the active involvement of users in the process. Setting work tasks during working hours and the way they are performed, along with working conditions, all influence workers in the service sector. Satisfactory productivity requires appropriate planning. The ability to balance multiple tasks tends to contribute to productivity.
In the service sector, the situation is more complex because calculating both inputs and outputs is more complicated. Through inputs such as information, self-service activities, and complaints, customers participate in the service process and influence it and its output (e.g., the recipient of a shipment does not have the exact amount of money). The interaction formed between the employee at the postal operator and the customer significantly affects the efficiency of the service process.
Productivity within the service sector varies due to different mechanisms for enhancing productivity in various environments. Managers’ driving forces in improving service productivity are faster, better, and cheaper [
52]. There are different approaches to improving service productivity: more diligent employee work, investment in capital equipment, automation substitution for labor, service standardization, etc. Enhancing productivity in the realm of services requires focus on both internal operational performance and external marketing elements [
54].
Efforts are made to reduce variations in order to achieve better quality, ensuring a balanced approach so that each user receives a service of approximately similar quality. The wider the range of services provided by a specific operator, the more complex the control process becomes. In the postal sector, the constant quality assumption is problematic primarily due to the diverse range of services as well as the very different contents of postal items and various working environments, meaning there are no two identical deliveries. Defining productivity in services becomes more complex when determining the unit of service based on which productivity calculations will be made.
4.4. Work Environment in Last-Mile
The physical space defining the workplace can either aid or hinder workers’ efforts in terms of productivity. Regarding deliverymen, their workplace is integrated with the delivery area they cover. Therefore, factors such as vehicle condition, weather, terrain configuration, traffic conditions (congestion, available parking spaces, etc.), recipient’s mood, etc., greatly influence them.
When it comes to deliverymen, they are primarily expected to maintain the integrity of the parcel, deliver it as quickly as possible, and be courteous when interacting with the customer. During the provision of a particular service, social contact is inevitable and can affect productivity both negatively and positively. This point can be considered crucial because the overall perception of the customer’s positive or negative experience can be formed here. It is possible to develop empathy, which contributes to service quality but raises questions about productivity.
These variables shape productivity and unsuccessful delivery, the two primary indicators currently applied by postal operators in the Republic of Serbia when assessing a deliveryman’s performance. Additionally, the question arises about the number of parcels to be collected and delivered during their working hours in their delivery area. Unlike the deterministic number of parcels to be delivered, the number of parcels to be collected is stochastic (
Table 2).
The reciprocal value of the previous table will provide us with the information about the time needed to deliver one parcel (
Table 3).
To evaluate productivity at 100%, it is necessary to consider the average delivery time achieved based on the delivery of express, express cash-on-delivery, and pickup shipments, along with the values of the aforementioned individual types of courier activities from the regulation [
45]. Considering the total data for the observed month, the share of express shipments without cash-on-delivery is 31.69%; with cash-on-delivery, it is 21.68%, and 49.05% are shipments picked up at the location. Based on this, we find that the average time for activities related to shipments is 3.37 min. In this case, the mentioned value of 0.297 shipments per minute is equivalent to a productivity of 100%. By observing
Table 2, we can notice that over 87% of productivity is higher than the estimated 100% norm recognized by the national postal operator.
If we consider all nine regions, the mathematical expectation for delivery/pickup of shipments will be around 2.44 min, with a standard deviation of 0.87 min and a median of 2.35 min. Examining individual regions showed that the average delivery/pickup times correspond to a normal distribution (
Table 4).
4.5. Failed Delivery
E-commerce retailers primarily assess postal operator performance based on the rate of unsuccessful deliveries, so unsuccessful deliveries not only incur economic loss but also significantly affect the operator’s reputation. Unsuccessful delivery is often attributed to the customer’s side, such as when the customer is absent. However, in some cases, the responsibility may lie with the operator, for instance, when a package is delivered to the wrong recipient or if the recipient refuses to accept the shipment (for example, in case of shipment damage). The failure to deliver primarily has financial implications for the e-commerce retailers (a direct consequence) and can lead to the degradation of their brand (an indirect consequence).
Predicting the outcome of delivery attempts is a complex problem, considering the diversity of factors that cannot be known in advance. Therefore, unsuccessful events are most often recorded after they occur. Operators encounter difficulties in directly capturing information regarding attempted deliveries. Consequently, they are only able to calculate the cost of unsuccessful deliveries at a later stage [
55]. Inconsistency between what the e-commerce retailer promises regarding delivery times and the actual delivery realization also leads to an increase in product return rates [
56].
If a delivery attempt fails, it causes a series of negative effects on all participants, including the customer, e-retailer, and postal operator, and thus affects economic, social, and environmental sustainability. The cost of unsuccessful delivery in 2020 is estimated to be USD 17.2 in the US, EUR 14.69 in Germany, and GBP 11.6 in the UK [
57]. The reason for the customer’s absence is the mismatch between their lifestyle (work obligations, lifestyle) and the usual delivery times [
58]. On the other hand, customers are generally unwilling to travel to retrieve their shipments [
59]. In cases where parcel lockers are located at third-party locations (most commonly gas stations), customers mainly use motorized transportation, with an even more detrimental impact on the environment.
In the territory of the Republic of Serbia, postal operators have too broad a time window for delivering shipments. Operators inform customers the day before that delivery will be made between 8 a.m. and 3 p.m. The next notification is sent 5 min before the actual delivery. As statistics show, a relatively small number of customers are willing to wait “blindly,” which is supported by significant values of unsuccessful delivery attempts (
Table 5).
Various alternatives are sought to address the issue of unsuccessful delivery: parcel lockers, parcel shops, or third-party locations with contracts with the postal operator, rerouting of shipments, choice of delivery time slots, etc. However, some solutions, in addition to increasing the percentage of successfully delivered shipments, may have a negative impact on shipment consolidation and routing efficiency [
60]. First-time delivery failure rates vary from 10% to 50% [
58]. In the observed regions on a monthly basis, failed delivery rates ranged from 13% to 37%, although daily rates sometimes exceeded 40%. This raises the question of what failure rates e-retailers can tolerate.
4.6. Application of IRN MCDM Model for Ranking Delivery Zones
Based on available results obtained from a postal operator, the following Key Performance Indicators (KPIs) have been selected: productivity, failure rate, number of shipments, distance travelled, and CO
2 emissions per shipment (
Table 6). A hypothetical scenario has been developed where, according to the methodology of the PE Post of Serbia, productivity is at 100%. This hypothetical scenario is introduced to evaluate the current state of delivery areas relative to 100% productivity.
Considering that the criteria—i.e., the KPIs in this case—do not have the same level of importance or influence on the alternative solutions, it is first necessary to determine the weights of the KPIs used in the evaluation of delivery zones related to last-mile logistics. The calculation and application of the IRN-OWCM algorithm are presented in detail below, as this represents a novel approach. As part of the research, four experts with significant experience in the field were consulted. Based on the quantitative data provided in
Table 6, they evaluated both the criteria and the delivery zones. The linguistic variables created through expert assessment are first introduced and presented in
Table 7.
Based on
Table 1, the linguistic variables were transformed into interval numbers, as shown in the
Table 8. This represents the first prerequisite for applying the developed algorithm, i.e., the conversion into interval rough numbers.
All procedures of transformation linguistics values in interval rough numbers have been shown as follows.
IRN consists of two rough sequences; two classes of objects are identified. We take the example of the third criterion
C3 and alternative A10:
and
. It is necessary to form rough sequences for each specified class of objects. For the stated example, they are obtained for the first class of objects as follows:
For the second class of objects, the following is obtained:
Based on the rough sequences, interval rough numbers are obtained:
An example of obtaining a final interval number
is:
The third step involves defining the initial
IRN(IMij) matrix while respecting the basic rules and operations of rough number theory. The complete
IRN(IMij) matrix is presented in
Table 9.
In the fourth step, the normalization procedure of the
IRN(IMij) matrix is performed according to Equation (2), as illustrated by the following example:
by obtaining the normalized
IRN(NMij) matrix (
Table 10).
In the fifth step, it is necessary to calculate the average score of the standardized decision matrix
IRN(Avsj), and prior to that, the summed values of the normalized
IRN(NMij) matrix, resulting in the
IRN(SMj) matrix:
The
IRN(Avsj) matrix is obtained as follows:
Determines the degree of preference variation, and its corresponding value
IRN(DPVij) is obtained as follows:
The final
IRN(DPVij) is presented in
Table 11.
Next, the previous matrix is summed column-wise to obtain the IRN(SDPVj) matrix:
In the final step, the calculation of the IRN criterion weights wj is performed as illustrated by the example:
, and the final IRN weights of all criteria are:
After calculating the criterion weights using the developed IRN OWCM, the most influential KPI is the one related to the failure rate. The third KPI, number of shipments, and the first KPI, related to productivity, have nearly equal values, which are slightly lower compared with the most influential criterion.
The next part of the research involves applying the IRN AROMAN method to assess the efficiency of urban zones related to last-mile delivery. First, the experts evaluated the delivery zones using linguistic variables, as shown in
Table 12, followed by the quantitative matrix with interval numbers, presented in
Table 13.
By applying the IRN-AROMAN method in combination with the criterion weights obtained from the IRN-OWCM method, the final results were produced (
Table 14), identifying the most appropriate delivery zones based on the previously established KPIs.
Based on the integration of the IRN OWCM and IRN AROMAN methods, delivery zone A1 is ranked as the most efficient (1st place), confirming its optimality with respect to the defined KPI indicators. A1 has one of the highest productivity levels (0.68 shipments/min), the lowest failure rate (0.13), and a moderate CO2 emission per shipment (164 g), indicating an efficient and environmentally sustainable delivery model. Its overall value, considering the number of shipments and distance traveled, demonstrates a strong balance between operational efficiency and sustainability.
Areas such as A9 (2nd place) and A4 (3rd place) also demonstrate solid performance, though not to the extent of A1. Lower-ranked zones (A6, A7, A8) reveal more significant operational challenges, particularly regarding distance and environmental impact, making them less favorable for efficient last-mile delivery.
However, when a delivery area consistently performs at a high level, there is a potential risk of overloading due to increased routing pressure. To prevent capacity saturation and ensure service stability, reorganization or redistribution of delivery areas may be necessary as a strategic solution.
In some developed approaches, there exists a certain inconsistency of expert judgments and results obtained using the proposed model. Our developed IRN MCDM model enables consistency of the obtained results with the initial step, the assessment made by experts.