Summer – the best time of the year for stressed-out logistics planners. They can look forward to their time away from work, as well as to the fact that their customers will be on holiday too. In the industry, the holiday season brings forth a drop in production, ensuring a couple of calm weeks. Logistics planners in food and consumer goods sectors can breathe easier with the slower pace in business as well, provided they are not involved in the delivery of ice cream or soft drinks. Summertime is when the consumers are lazing around on far-away beaches and running the logistics planners there off their feet.
However, the vacation-related lull in work does not necessarily spell good news for business owners. As industry, trade and logistics providers experience a holiday slowdown in revenues, the logistics costs can sometimes go into overdrive. Where fixed costs are concerned, it is not the absolute logistics costs which will go up during this period, but rather the per-item logistics costs.
This applies to storage and automated picking areas, especially in network logistics. However, the negative impact in costs can be minimized for procurement and distribution networks. This is achievable by creating a “summer timetable” for marked seasonal lulls which typically require lower capacities. Is it worth the effort though? One can reduce journeys to customer locations or expand the individual area coverage of delivery personnel . Most dispatchers do this, but without moving too far away from the normal route plan. Who wants to turn their entire route plan on its head, just because of a couple of weeks of tepid demand? No, in summer, one has better things to do.
However, it’s a different story for those who use DELMIA Quintiq’s sophisticated planning software. The solution enables operational route and tactical planning to adapt to changing workloads while maintaining master and job data.
How does this optimization software help? Here’s a simple example: For a shipper who wants to supply 43 consignees with 6 trucks, there are, in theory, 1050 different possible routes. A good dispatcher typically plans routes where the trucks travel radially from the loading station to the consignee locations. This will come up to 504 kilometres in total. DELMIA Quintiq software, on the other hand, solves the distribution problem with 462 kilometres in total, using only 4 trucks.
In practice, the decision parameters are more complex and the cost effect more noticeable. For example, slower months may take away the need for certain cross docks or storage areas. They may also result in giving up unfavourable routes to other forwarding companies. That’s how one can avoid the trap of fixed costs – and after the holiday season, it won’t only be the employees who are relaxed; the cost situation will be too.
How do you handle the holiday season? Write a comment or send a tweet to @Quintiq.
Contributed by Björn Helmke
