Case Study

Route Optimisation and Packaging Rules

The company

This company is a provider of integrated shared services for healthcare. It has experience in cross-area services from nutrition plans, facility cleaning and laundry management, to distribution services and stock management.

The challenge

Regarding the distribution and stock management services, this company was faced with the challenge to coordinate the logistic process for vaccine distribution.

Although fully integrated within its business areas, the magnitude of this operation demanded a new approach to all processes regarding warehouse management and route planning.

How to optimise logistics processes

In order to tackle this operation, the main goal was clear - how to create a new and agile operation from scratch?

  • The need to create routes every day with variable number of delivery locations that considers the transport limitation of vaccines and also the time windows of vaccination centres.
  • Absence of a communication format that is able to join the order info, the route output and which estimates the number of boxes to be prepared by the warehouse.

The approach

To meet the proposed challenge, it all started with the application of the KAIZEN™ methodology to define the future vision of all processes. Then, two requirements were identified to be tackled with analytical expertise: route optimisation and packaging rules.

An agile methodology was followed to deliver incremental versions of the developed tools in order to ensure alignment with the operation requirements. A close relationship with IT teams was crucial to ensure data was always up to date and connected to the system.

The solution was divided in two steps:

2 step solution

  • Routing algorithm which minimises kms, travelling time and number of cars. Integration of strategical x-docking locations.
  • Master Plan creation with different summary views which is read by the system and generates the boxes tags, the PDA info for the drivers and automatic alerts for the vaccination centres.
  • Optimisation of boxes with an allocation algorithm which maximises the nr of vials per box and enables brand mixing.

Results

The main result was the implementation of all the requirements necessary in the time needed to start the vaccine distribution.

The use of the analytical capabilities was also crucial to help define the better distribution network and by implementing a x-docking strategy, the delivery cost.

As there were different types of vaccines, with different packing formats, the need for an algorithm capable to determine the optimal number of boxes needed arose. The developed solution reduced the boxes by 30% which directly impacted not only the number of physical resources needed, but also improved the truck capacity utilisation, allowing more deliveries.

Other intangible results:

  • Operation built from scratch with all the changes and customisations being made online (zero tolerance to errors).
  • Effective communication between all parts - warehouse, drivers, mission control room and security forces.

#warehousing & transporting

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