Project:
Development of an alternative logistics model to service retail customers
Result:
A logistics model to service retail customers when a predetermined requirement is met is stead of using schedules.
1. Problem Statement
- The transportation of inventory is managed by the client on behalf of their retail customers;
- The servicing is currently done on a schedule, the opportunity to service these customers only when required by the use of a dedicated vehicle should be investigated;
- Create an alternative logistics model, with reduced costs (priority on logistics);
- Develop and package a new product offering that provides the same level of service but at a lower operational cost;
- Develop a costing model for the new product offering;
2. Solution Approach
- Define criteria for Proof of Concept (number of customers, geography, density, volumes etc.)
- Feasibility study of a new product offering and logistics model.
- Geocoding of customers;
- Statistical analysis on historical transactions (per customer) to identify volumes and trends;
- Calculate servicing triggers using Monte Carlo simulation modelling (@Risk)
- Perform a Desktop Proof of Concept (no disruption in daily operations):
- Transactional data (value, volume, timestamps etc. )
- Daily routing and planning (travel time, travel distance, vehicle limits, services etc.)
3. Project Outcomes
- Changes in the logistics operational model to move from scheduled services to a dedicated vehicle(s);
- Use a pull servicing methodology in stead of pull;
- Criteria to service customers only when needed (based on volumes and values);
- Up to 20% saving on total cost to provide the same service level;
Inputs and data
Simulation Model
Operational and Financial Outputs
