In order to reduce the cost of operation for their client, Pick ‘n Pay, Imperial Logistics wanted to smooth their delivery volumes across a week long period. Early attempts were not satisfactory, as the trade-off between minimizing total cost and smoothing out the workload could not be reduced.
OPSI Systems were brought on as consultants to recommend a profile of delivery days for each customer that would ensure the correct proportion of total volume was delivered on each day while adhering to delivery pattern rules.
OPSI Systems met all of the required objectives: the nominated delivery days (NDDs) for Pick ‘n Pay Groceries deliveries were smoothed out within a 2% margin for each days target, using ORBIT, OPSI Systems’ route-building and information tool.
Imperial Logistics is one of the largest suppliers of third party logistics (3PL) in South Africa. As a result of their experience and track record, Imperial Logistics was tasked with the operational planning of Pick ‘n Pay’s grocery deliveries. Imperial wanted to reduce the operating costs by reducing the total number of deliveries and maximising the space utilisation.
However, due to imbalances in the existing delivery days assigned to each store, Imperial was forced to use more vehicles than strictly necessary. Imperial realised that improving the weekly volume profile would ensure that vehicles were not overworked one day and idle the next, but were unable to achieve the correct balance manually.
The primary objective was to ensure that the delivery volumes per day were as stable as possible, while adhering to certain rules, such as ensuring that delivery days for any particular store are not “bunched up” in a part of the week, but rather evenly spread.
The volume distribution over the week was to be as even as possible, with the exception of Saturdays, which had reduced working hours available and could only process 10% of the expected volume.
The second objective was to ensure that the delivery days for any particular store would remain stable during both the low volume season and high volume season. This is to maintain staff schedules, which are planned in advance, and reduce overtime pay. This would allow for orders volumes to fluctuate with minimal disruption to the work schedule.
Imperial Logistics contracted OPSI Systems’ consultants to assess the existing delivery days and generate a weekly volume profile that would reduce transport and operating costs.
OPSI Systems utilised their new optimal route building and information tool, ORBIT, to perform the studies and generate the required solutions.
Imperial provided a list of stores, complete with geocodes, average weekly delivery volume for average, off-peak, and peak weeks. The NDDs were to be tuned to the average week (“Mid”) first. Once Imperial and Pick ‘n Pay were satisfied with the Mid NDDs, the High and Low scenarios were to be based on the Mid scenario results.
In this way, NDDs were designed so that stores would receive more or fewer deliveries in each week according to their needs, but would not need to change the days on which they had staff available to offload.
The goals of the project were achieved for all three levels (Off-peak, Mid and Peak volumes) such that delivery volumes were smoothed out to within 2% of the target volumes for each day in each scenario.