The Logistics Business has recently completed a project to model a same day delivery transport network for a major Electronic Device Retailer, which we cannot name for confidentiality reasons. The Project provided the client with the infrastructure, stock holding and costs of a network of hubs and delivery vehicles to provide a same day delivery service anywhere in the UK.
The Logistics Business suite of i-flow models was used to develop the supply chain network and costs.
Initially, data on the existing operations was collected and analysed to understand customer demand across the different geographic and demographic areas within the UK. This demand information was modelled geographically to plot demand density and establish the optimum locations for transport hubs. Vehicle drive times to satisfy the customer demand and inbound transport times were taken into account within the models. The geographic models were used to determine the optimum delivery routes, taking account of mileage, time taken, number of drops, stem mileage, average speeds and time with the customer.
The information generated from the Geographic Models provided the base data for the Supply Chain Model. These models provide information on volumes of products moved within the network and stock holding at National Distribution Centres, hubs and delivery vehicles. The sizes and functions of each of the facilities was determined from this information, as were the optimum vehicle types in the different parts of the network.
Information on the physical movement of products from the Supply Chain Model is integrated with the Cost Model. This provides detailed information on the total delivery costs to each customer. These costs are broken down into the different elements of the supply chain such as vehicle costs, driver costs, hub handling costs, inbound transport costs, costs of stock etc.
All models are driven by a comprehensive set of parameters that provide the user with the ability to change volumes of demand, stock levels, vehicle speeds, road congestion, time with customers etc. Peak periods during the year and seasonal demand patterns were all taken into account.
The reporting capabilities within i-flow enable tables of results to be produced to understand the effects of parameter changes on service levels and costs. These reporting facilities were one of the key tools in defining the optimum supply chain to provide the same day delivery of electronic devices.