Transportation Routing & Freight Optimisation

Getting your product to the customer is only half of the problem solved. Making sure that this can be done in the most effective manner can provide additional opportunities for cost saving and service improvement. In these tough times, that can make a huge difference.

Challenges

Transport managers face myriad problems on a daily basis. Whilst vehicles may be fully loaded on outbound journeys, they often run empty returning to base. Additionally, increasing environmental requirements place more and more pressure on organisations to reduce emissions such as exhaust and noise so alternate modes of transport such as rail can be viable options. But dealing with daily problems and the challenges of `the last mile’ often distract managers from dealing strategically with this challenge.

Opportunities

Reviewing how an organisation structures and manages its operational transportation requirements can reveal significant opportunities for improvement. Today’s generation of tools and approaches can quickly process massive amounts of information to deliver real insight and rapidly pinpoint opportunities for improvement such as:

  • Re-evaluate legacy transportation networks for effectiveness and efficiency
  • Determine lowest overall landed cost
  • Identify optimal mode mix (for example, road, rail sea)
  • Determine if load consolidation will impact service levels
  • Measure all constraints for most efficient routings
  • Prove optimal DC-to-customer assignments
Approach

GRA takes a bottom-up, fact based approach in analysing routing and optimisation options to ensure a defensible, realistic and achievable set of options can be achieved. Transportation route optimisation can be done alone or in conjunction with either optimisation or simulation. Using our advanced modelling technology, transportation routes are defined to minimise cost of inbound or outbound shipments, while considering realistic cost and constraint structures. This helps answer the question, “what happens to transportation routes when the network design is changed?” Other factors we consider include:

  • The most efficient inbound pick-ups based on the last stop of the outbound route in order to minimize the overall route cost through minimisation of the time and distance trucks are driven empty
  • Using transportation route simulation emulate routing strategies and test new strategies to predict actual costs and service levels
  • Creation of optimal daily, weekly, monthly or quarterly plans to set inventory levels, schedule production and to define distribution routing
  • Validation of the plan, pre-implementation via scenario planning and execution
Outcomes

Through this approach, GRA can help articulate:

  • Clearly defined options including costs and benefits of each of the options
  • Fact based, business case ready costings to enable objective investment decisions to be made if required
Benefits

The benefits of this approach include:

  • Transport savings through reduced operating costs such as fuel and maintenance
  • Reduction in emissions contributing to environmental sustainability
  • Potential to increase service levels and customer satisfaction through improved transport capability
  • The ability to perform simulations that highly approximate actual implementation without the cost and time implications

– BACK TO CONSULTING

Testimonials

"GRA built capability within the organisation on the importance of S&OP and its role in managing the business. This enabled senior leadership to fully engage in the S&OP process to drive an issues-based, KPI-driven S&OP process with clear ownership of the forecast and other key areas."

– Demand Strategy & Planning Director and S&OP Transformation Programme Manager, Lion Dairy & Drinks

Typical results

  • 20-40% inventory investment reduction
  • increased service levels ranging up to 99.9%
  • 10%-15% reduction in supply chain operating costs
  • 5%-20% spend management savings
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • a minimum 3:1 ROI (10:1 to 30:1 typical)