Business Challenge
Optimizing transportation route to reduce service costs
A leading global transport, warehousing and distribution services provider wanted to assess its transit standards, in order to identify opportunities to optimize the transportation routes and reduce service delivery costs.
Situation: High distribution costs to the largest market
The client’s initial transit time benchmarking across multiple routes and historical shipment data revealed that the distribution costs to one of its largest markets were higher than the average. The client wanted to reduce transportation costs and was looking for advisory on optimizing the route to reduce transportation costs.
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Solution
Route optimization analytics to determine the most feasible route plan
We collected data from the client’s logistics systems and analyzed it using cluster analysis, conjoint analysis, scenario analysis and what-if analysis, to measure their current performance in terms of number of sites/nodes in each route, total distance traveled, average wait time at the site/node, delivery frequency and costs, transit time through weekdays and weekends, delivery standards for time critical delivery.
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Impact
12% reduction in logistics costs
The client utilized our baseline model for alternative routes and fleet mix to cover the maximum number of clients across the route and decide the right set of stops in the route. This reduced the total distance traveled, and transit time is taken in the route while delivering a 12% reduction across the busiest route for the client.