CASE STUDY

Pharmaceutical Warehousing Company Reduces Transit Time and Costs through Logistics Optimization

Sep 23, 2016

Business Challenge

Improving delivery time and reducing logistics costs. A global warehousing and distribution services supplier for pharmaceutical companies wanted to assess its transit standards, and identify required changes in its logistics structure, in order to optimize overall transportation and distribution costs.

Situation: High distribution costs due to non-optimized transportation structure.

The client’s distribution costs to one of their largest market were higher than the average. The client wanted to optimize the cost by analysis of its transport and logistics structure and was also looking for recommendations and advisory on alternative routes, stops and fleet distribution for cost reduction.

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Solution

Conjoint analytics for measurement of the performance of transit structure.

We used conjoint analysis based algorithm on historical and real time shipment data, and modeling of logistics costs over the distribution chain, to measure and analyze the performance in terms of total distance traveled, delivery frequency, transit time through weekdays and weekends, delivery standards for time critical delivery, and total delivery costs.

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Impact

Reduced transit time by 4 hours and reduced logistics costs by 12%.

Our baseline model for alternative routes helped the warehousing and distribution services supplier cover the maximum number of clients across the route. We also came up with the right set of stops on each route, which helped the client lower the total distance traveled, and provided redistribution of the fleet to optimally utilize the trailers and maximize load carrying capacity. The client was able to reduce its transit time by 4 hours across the busiest route, and reduced logistics costs by 12%.

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