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;