What is Store Delivery Planning?
Store Delivery Planning involves deciding on when and how many of which products have to be delivered to each store, given the required volumes for the coming period, in such a way that transportation costs are minimized and service and inventory levels are being respected.
Why optimize Store Delivery Planning?
There are multiple reasons to optimize Store Delivery Planning, because it:
- Helps decreasing logistics and transportation costs, and these are high, especially in retail
- Supports a lean supply chain, which decreases operating costs
- Drives the internal and operations of Distribution Centers (DCs)
- Results in higher filling rates for trucks and less kilometers/mileage driven
- Leads to transportation efficiency which leads to store efficiency
- Increases the reliability of transportation execution, customer service and satisfaction
- Increases the focus on sustainability
- Enables growth
How to optimize Store Delivery Planning?
There are various ways to optimize Store Delivery Planning, by improving processes and by using good optimization software solutions. A smart optimizer takes all industry-specific restrictions into account and enables optimization at a central level, over multiple DCs and product groups. This can result in substantial savings. The right solution also offers real-time visibility of the situation for the coming hours to all stakeholders and helps them to organize their part of the supply chain better.
First, the possible delivery schemes per store should be clear: which days and times of the week with which volume per product group? Secondly, it must be clear which rules or restrictions are applicable at stores, transportation- and DCs. These rules and restrictions can completely differ between retail product groups, such as between food and non-food retail.
At the tactical level, a smart optimizer can select the best delivery schedule for each store and/or product group for the coming period. At the operational level, the daily routes to the stores can be created in such a way that transportation costs are minimized, the service level agreements (SLAs) with stores are respected, and none of the restrictions are violated. During execution, a smart optimizer shows the impact of planning high priority ad hoc orders or the effects of delays instantly and clearly, and also communicates them to all stakeholders directly.
What are the results of optimizing Store Delivery Planning?
Optimizing Store Delivery Planning at a central level results in a better overview and organization of the supply chain and leads to:
- Lower transportation costs: between 5-15% savings in costs
- Service level improvements: between 25-50% improvement in execution
- A doubling of the span of control for planners or a reduction in the amount of effort by a factor 2 (Source: ORTEC Benchmarks, 2016)
Why contact to optimize Store Delivery Planning?
ORTEC has specialized knowledge and a proven track record in optimizing frequency, delivery days and timeslots in retail to minimize transportation costs. ORTEC’s solutions take business requirements into account, including inventory requirements, warehouse and store constraints. Solutions have been implemented for food and non-food retail, but also for Direct Store Delivery processes of manufacturers.