Written by Christina Schoenen
SmartRouting | 8 mins read
– All retailers are faced with logistical issues, questions and challenges. Over the years, Ab Ovo has been assisting many businesses in solving these logistical problems, be it in retail or in other industries or services. In this blog post, we want to focus on solutions to problems in logistics that are specific to the retail sector.
When we talk about retail logistics, we consider all parts of a retailer’s logistics network. But for the sake of illustration, let’s consider the logistics network of a supermarket chain consisting of a regional distribution center and of the retail stores it delivers to.
Recurring or incidental issues need to be addressed via systems and processes supporting routine operations, whereas questions of a more strategic dimension may be decided by Management via data-driven analysis. Let’s have a look at the solutions Ab Ovo devised to assist supermarket chains with a few typical challenges.
For experienced planners, it is usually not a problem. They take the constraint into account and plan around it because they hold the knowledge about it in their head. For new or temporary planners, on the other hand, it is a real problem. They don’t hold that knowledge and need to build that knowledge into their head. The store may have to suffer the consequences of a few failed deliveries at first, while the delivery time constraint is being memorized.
Our SmartRouting solution for Retail can easily support the planner in making the right decisions intuitively, with little effort.
The times at which the street market takes place can be configured by the planner as a recurring event during which trucks cannot deliver to the store’s specific address. When planning a truck delivery for the store, planners can immediately see in a visual component (e.g. calendar or Gantt Chart) that “something” is blocking them from planning the delivery during specific time periods. If a planner accidentally tries to plan a truck delivery to the store during any one of those blocked periods, the delivery gets postponed to the earliest available time slot after the blocked period.
When configuring the SmartRouting solution, the experienced planner shares his knowledge and experience with all planners, albeit indirectly. The solution becomes a repository and knowledge base for all planners. The business becomes less dependent on individuals, more process driven, more resilient.
The ability of planners to consciously ignore a constraint and to overrule the behavior of the system is preserved at all times. For example, planners could still schedule a delivery during a blocked period, should they know an exception occurred and the street market won’t occupy the parking lot.
A similar use case that can be handled with the SmartRouting solution is a situation where the store is located on the narrow street of an old city center with limited access. A constraint/rule can be added to prevent any deliveries to the store with big rigs or box trucks over a certain size.
A retailer’s fleet of delivery vehicles is usually made of more than just one type of delivery truck (e.g. 18 wheeler, or box truck.) Each truck type has a specific cargo area layout. And the cargo area may be divided by walls into smaller compartments. Compartments have the ability to transport different types of goods. A truck equipped with a refrigeration unit, i.e. heat pump, may be able to transport frozen goods in one compartment, chilled goods in a second compartment and goods at normal room temperature in a third compartment.
Knowledge about truck specific cargo area layout and compartment distribution is an important piece of information for the planner assigning pallets of either frozen ice cream, fresh fruits and vegetables, or cereal boxes to trucks/compartments. The knowledge can be maintained in the SmartRouting solution as master data and be visible during planning at all times.
Storing and transporting food at the right temperature is essential for food retailers. For perishable goods such as meat, fish and dairy products, breaking the cold chain could mean more than just revenue loss. Breaking the cold chain is a breach of health regulations that, in case of food poisoning, might have far more reaching consequences in terms of liability.
A planning support solution such as Ab Ovo’s SmartRouting for Retail not only optimizes the efficiency of planning, with fewer miles driven, fewer drivers and a smaller fleet of vehicles, it also minimizes loss of produce. Furthermore, it is valuable as a hedge against major liability risks.
The transition to Zero Emissions Vehicles (ZEV) is becoming a matter of necessity rather than choice. Major cities, states and even countries have announced they will ban the sale and/or use of Internal Combustion Engine (ICE) vehicles in this decade or in the next.
Although Battery Electric Vehicle (BEV) technology is progressing at an astounding pace, and despite the promising specifications of soon to be commercialized semi-trucks and panel vans, the driving range and autonomy of currently available battery electric trucks is still limited compared to that of outgoing fossil fuel burning trucks.
Planning the operations of a fleet of battery electric delivery trucks therefore demands that a new set of rules be taken into account; a new set of rules that the SmartRouting solution supports.
Drivers of battery electric trucks cannot just fuel up at gas stations in a handful of minutes and resume their tours. When, where, and for how long a vehicle needs to be charged, or can be charged, has to be planned.
Many data points are needed for planning and can be maintained in SmartRouting, such as:
- the locations where compatible chargers are available (store, distribution center, etc..)
- the maximum charge rate of each charger (in kW),
- the maximum available capacity of each truck’s battery (in kWh),
- the fuel economy of each truck (in miles/kWh, or kWh/100km.)
All those data points are necessary to create a good plan, but they are insufficient in themselves. It remains difficult for a planner to create a workable plan using the raw data only. SmartRouting takes it one step further; it digests the raw data and transforms into actionable input planners can use to support their decisions. One way it is done is by calculating how much driving range is planned to be left as a delivery truck progresses along its route, should the range drop below a set minimum.
Let Ab Ovo assist and support you
All the solutions described above are solutions Ab Ovo has worked on in the past and have been implemented using SmartRouting. Contact us should you want more information or if you would like to discuss the particular challenges your organization is confronted with.
Christina Schoenen is a senior business consultant and working for Ab Ovo for more than 8 years. During this time she supported customers in a broad range of industries from retail, rail and aviation to steel production. Her enthusiasm about complex planning puzzles already started during her mathematics studies in Aachen where she gained deep knowledge in operations research and optimization.