How a Philip Morris Distributor Reduced Delivery Costs %22 With Rotamat
In the competitive landscape of the tobacco industry, efficient logistics operations are crucial for maintaining a strong market presence. The company in focus for this case study is a Philip Morris distributor that has implemented a unique strategy for managing its delivery routes.
Industry:Logistics
Size: 40 Vehicles
Stokis is a prominent distributor in the tobacco industry, specializing in the supply and distribution of tobacco products through a vast distribution network. The case study specifically focused on the client’s cigarette distribution division, which is responsible for supplying various brands of cigarettes to retailers.
OVERVIEW
A Philip Morris distributor with a unique delivery system faced challenges in managing last-mile deliveries across 40 vehicles. Each vehicle was assigned a distinct territory with no overlaps, and each customer was visited one to three times per week by a single vehicle. Despite the structured system, the company faced inefficiencies and high costs due to unoptimized routes and territories.
THE CHALLENGE
- The territories were assigned without a systematic approach, leading toinefficiencies.
- Route planning was left to drivers, resulting in inconsistencies and highoperational costs.
- The lack of accurate data on stop times and travel times further complicatedroute planning, highlighting the need for route optimization.
- Drivers were sticking to their old routes, preferring to stay within their comfortzones and follow their established routines.
ROTAMAT SOLUTION
Rotamat revolutionized the logistics operations of Philip Morris Distributor, aleading player in the industry. By leveraging advanced algorithms and innovativestrategies, Rotamat successfully reduced costs and improved operational efficiency.
With Rotamat, Philip Morris Distributor optimized its logistics processes, identifyingareas for improvement and implementing cost-saving measures. By analyzing data,streamlining routes, and optimizing resource allocation, Rotamat enabled PhilipMorris Distributor to minimize expenses associated with transportation,warehousing, and overall supply chain management.
Through the implementation of Rotamat, Philip Morris Distributor achievedsignificant savings while maintaining the highest level of service quality. Thistransformative solution empowered Philip Morris Distributor to enhanceprofitability, maintain a competitive
THE RESULTS
The implementation of our route optimization strategies brought about substantialimprovements in the company’s logistics operations. The most significant achievement was areduction of 4000 km in the weekly distance traveled by the entire fleet of 40 vehicles. This wasa direct result of our advanced algorithms, which optimized the routes based on factors such ascustomer locations, delivery frequencies, stop times, and travel times.
This reduction in kilometers traveled had a ripple effect on the operations. It led to a decrease invehicle utilization rates during working hours, which suggested that the company had thepotential to reduce the number of vehicles in operation without compromising on servicedelivery.
To explore this potential, we used our advanced algorithm to reallocate customers among fewervehicles. We simulated the stop times and travel times to ensure that the new routes would stillmeet all customer needs. The results of the simulation were promising: we found that we couldtake 4 vehicles out of operation without affecting service levels.
We presented these findings to the supervisors responsible for the company’s operations. Aftercareful consideration, the company decided to implement these changes. 4 vehicles were takenout of operation, and the new route optimization solution was applied to the remaining 36vehicles.
