Route Optimization helps a Dairy Food Supplier & Distributor to reduce Transportation Costs by 32%

About

The client, based in the US, is a leading supplier and distributor of dairy and non-dairy food items like juices, eggs, mineral water, salads and coffee creamers and has 20+ branches.

Challenges

The company delivers dairy products through 400 sales routes reaching out to 50,000 customers every day.

Manual route planning of 400 routes daily was a complex, challenging and time-consuming process with sub-optimal results.

The client faced issues like ineffective fleet management and an unoptimized route plan for each vehicle leading to increased transportation costs.

The client wanted an AI solution to optimize the transportation route from dairies to customer locations and help reduce costs, miles travelled, fleet size and enhance coverage.

Solution

Data Scientists from Tenzai employed the Purpose-Driven AI framework to develop an AI-based route optimization solution for the client.

The team conducted an in-depth exploratory data analysis to extract key insights from the data. The analysis provided insights into the current utilization of fleets, delivery centers, customer locations, distance covered, cost etc. Based on the insights, the team adopted a stacked ensemble approach to solve the problem.

As a first step, the team developed a clustering model to group similar delivery locations together. Then an optimization model using genetic algorithms was complemented by heuristics. The solution was able to generate optimal routes factoring constraints like delivery centers, fleet size, waiting time, distance etc.

The solution was deployed with the following features:

  • Route plan visualization – Helped logistics professionals visualize routes across multiple factors like drivers, fleet, DCs, clusters, etc.
  • Route Plan Simulator – Business users can simulate scenarios and configure constraints to study the impact on route plans in terms of cost, miles, timelines.
  • Driver App – Helped drives get real-time access to optimized routes along with special instructions for each DC or stops.
  • Analytics & Reporting – Dashboards for top management to track delivery operations over time and have provided in-depth insights for multiple KPIs.

Why not use data to gain insights, guide efficiency efforts, and make predictions? Contact us.

Impact

Post-implementation, the client experienced increased on-time deliveries across all routes and DCs. The client was able to reduce substantial costs due to reduced fleet size and total miles covered.

  • Reduced total transportation costs by 32%
  • Reduced the fleet size by 20% and overall miles by 15%
  • Increased on-time delivery adherence by 25%