Oil and gas company achieves huge savings through route optimization analytics

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Oil and gas company achieves huge savings through route optimization analytics

Business Challenge: Optimizing transportation route to reduce service costs

A leading oil and gas company wanted to assess its transit standards to identify opportunities for optimizing the transportation routes and reduce service delivery costs.

Situation: High distribution costs

The client’s initial transit time benchmarking across multiple routes and historical shipment data revealed that its distribution costs were higher than the average market costs. Client wanted to reduce the transportation costs by implementing route optimizing techniques.

Solution/Approach: Route optimization analytics to determine the most profitable 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, delivery frequency and costs, transit time through weekdays and weekends, delivery standards for time critical delivery. Based on this, we provided suggestion to the client on optimizing the route plan.

Impact: Significant reduction in logistics costs

The client utilized our model for identifying alternative routes and cargo mix to cover 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 taken in the route, while delivering significant reduction in cost for the client, to come at par with the market averages.