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Alibaba Vehicle Routing Algorithms Enable Rapid Pick and Delivery

Alibaba Group pioneered integrated online and offline retail models to allow customers to place online orders of e-commerce and grocery products at its participating stores or restaurants for rapid delivery—in some cases, in as little as 30 minutes after an order has been placed. To meet these service commitments, quick online routing decisions must be made to optimize order picking routes at warehouses and delivery routes for drivers. The solutions to these routing problems are complicated by stringent service commitments, uncertainties, and complex operations in warehouses with limited space. Alibaba has developed a set of algorithms for vehicle routing problems (VRPs), which include an open-architecture adaptive large neighborhood search to support the solution of variants of routing problems and a deep learning-based approach that trains neural network models offline to generate almost instantaneous solutions online. These algorithms have been implemented to solve VRPs in several Alibaba subsidiaries, have generated more than $50 million in annual financial savings, and are applicable to the broader logistics industry. The success of these algorithms has fermented an inner-source community of operations researchers within Alibaba, boosted the confidence of the company’s executives in operations research, and made operations research one of the core competencies of Alibaba Group.